"The events of the last few years are evidence of steady striving by Kyiv law firms to enter the Odessa market",ALEXANDER KIFAK, MANAGING PARTNER AT ANK LF, ATTORNEY, NOTES
— What do you believe to be the key difference of Odessa’s legal services market?
— Any market is formed by the demands and tasks of clients, and external lawyers, in their turn, address these challenges offering clients the terms of support for a specific project or business as a whole. Due to objective causes (three largest sea ports, offices of leading ship owners, ship managers and crews, shipyards and agency companies are located in Odessa Region) the majority of our orders are related to maritime law, port infrastructure and logistics in some way or other. The second, but equally significant segment where we are involved is agriculture, where corn traders, winemakers and agricultural producers operate. Finally, the third industry traditionally requiring the attention of external lawyers is HoReCa and retail, which have showed sustainable growth in our region in recent years. In my opinion, the second feature of the legal services market in the Southern region is its maturity, since the main teams of lawyers began their work in the mid-90s (including ANK Law Firm) and many of our clients are still with us.
— How did the focuses of the Odessa legal market change in 2018? Is the market being forced into reformatting because of the reforms being introduced in the country?
— It is difficult to identify any focuses peculiar for 2018, but the events of the last few years are evidence of steady striving by Kyiv law firms to enter the Odessa market. If I remember correctly, four or five companies from the "top twenty" by LP rating have already opened their offices in Odessa. It is better to ask these companies directly about the success of their activities, but we did not experience a serious outflow of clients or projects after the arrival of Kyiv firms. As to the impact of reforms, it is always noticeable. In the case of legal practice we should mention judicial reform and enhancement of the role of attorney after introduction of the so-called attorney monopoly, which will start in full from January 1, 2019. Judge for yourself: currently, the waiting list for passing attorney exams at the Qualification and Disciplinary Bar Commission of Odessa Region is one year on average. The ANK LF team as of today includes 18 attorneys, and, as far as I know, this is the highest number among law firms in Southern Ukraine.
— What trends can you mention in maritime law practice?
— I would like to mention not classic maritime law associated with shipping, but the broader concept that includes legal services in the area of port and transport infrastructure and logistics, which require special knowledge in various fields of legal practice. When speaking, for example, about legal support for a project to build a port grain terminal, we understand that this requires knowledge and experience in the area of land, maritime, and transport law. If such a project is funded with the participation of a foreign bank, we should additionally study the issues related to banking and currency regulation, security package and other matters. For such projects ANK forms a team of lawyers with appropriate experience and knowledge. I would like to note white collar crimes and private clients support among the practices that we opened more recently, which continue to develop. While in the past private clients preferred attorneys practicing privately, affluent clients have recently begun to choose law firms, especially when it comes to the sale and purchase of luxury assets or investment abroad.
— One of the trends in this region in 2017 was the stepping up of pressure on business by supervisory agencies. Has this negative trend been negated?
— We have no statistics of client appeals for support in searches, but in 2018 their number really decreased compared to the previous year. I would also like to mention positive points related to changes in the Criminal Procedure Code of Ukraine: mandatory video recording, participation of an attorney, right of attorney for photo and video recording of investigative activities. The number of cases with the involvement of so-called physical support during searches, i.e. servicemen of the Security Service of Ukraine and the Ministry of Internal Affairs, has also decreased.
— Is there a rise in interest on the part of foreign investors to this region? Do they turn to local lawyers, or do they enter the market with their own legal advisors?
— There are all sorts of cases. When it comes to a large international holding (for example, Hutchison Ports or DP World), to which an international law firm with an office in Kyiv provides support on a permanent basis, then it prefers to apply to this firm’s Kyiv office, whose lawyers will further advise the client regarding Ukrainian law. If we are talking about projects requiring special legal knowledge and experience (for example, related to hydraulic engineering and dredging of harbors), the foreign company generally studies the local market and chooses its legal advisor following the results of own tender.
— What are the principles of cooperation with Kyiv-based law firms and companies from other regions of Ukraine? Does ANK cooperate with foreign law firms?
— We do not have offices in Kyiv or other regions, for this reason we actively engage colleagues on the market when we consider it necessary: fortunately, we have a wide choice. Sometimes, we work under sub-contract with Kyiv-based firms, sometimes they subcontract with us. We can also support some projects jointly. Sometimes a stumbling point in cooperation of regional law firms with Kyiv companies is the desire of the latter to conceal the name of the subcontractor from the client and provide the entire package of services under its own brand. The second no less important issue of such cooperation is the mechanism for determining and paying the fee to the subcontractor and related nuances. As our experience shows, in such situations the lawyers should be flexible and strike a compromise taking into account interests of the client. As to our foreign colleagues, ANK is a member of Geneva Group International, the largest international alliance of law and audit firms. This allows us to find reliable advisors for our clients in a quick and easy way virtually in any country of the world.
— Big business is increasingly declaring its striving towards compliance. Does this have an impact on the practice of law firms?
— We have long been accustomed to periodic completion of special questionnaires, UBO declarations and execution of anti-corruption clauses in agreements for the provision of legal services. One should look at this favorably if one wants to work with clients known around the world. Conversely, many clients (first and foremost all subsidiaries of foreign companies) introduced a new position in their personnel, namely compliance officer, who is subordinated to the compliance director in head office and deals only with compliance issues.
— What is the level of lawyers' interest in Odessa? Is competition high in the region?
— Alongside the opening of offices by Kyiv –based law firms, as mentioned above, we should note the appearance of young teams on the market also trying to find their place in the sun. If my memory serves me right, five or seven new "legal names" appeared in Odessa over the past three years. These are small (with three to five lawyers in the staff) firms, which do not chase after ratings, but advise their "own" clients and help them to solve local business tasks. We will see the success of these undertakings over time.