Transformation processes on the legal market continue. Participants generally managed to adapt to difficult economic conditions, there are even cases of return increase – but only in Hryvnia equivalent. Compared to other sectors of the economy the management of the situation is rather good, although there are no reasons for optimism yet.
“In order to succeed on the Ukrainian legal market, a law firm should run a well-balanced legal practice” says Oleg Batiuk, Managing Partner at Dentons Kyiv office
One of the year’s most remarkable trends in the legal market was the active migration of practicing lawyers into government offices, mainly into the ex-ecutive power vertical. It can be said that law firms served as one of the main sources of the government personnel reserve. However, traditional career moves by lawyers have been also plentiful this year.
The spending budget of customers on external legal expenses has been significantly cut. This is acknowledged by all market participants. The reduced number of solvent customers has encouraged competition on the legal services market. And very often the financial aspect is regarded as the main tool in the competitive fight.
“50 leading law firms of Ukraine” is a multifactorial model of the market, based on analysis of key performance indicators of law firms
Once attractive areas of legal practice — support of investments and M&A, transactions in the financial and banking sectors, not to mention the capital markets, have not yet reached the pre-crisis level of workload. The objective stagnation, however, can be regarded as a rehabilitation period and the pos-sibility to reformat the practice by bringing it into line with new market conditions and legislative realities. Those law firms that have managed to pass this way successfully will receive a distinct competitive advantage when activating, I dare to hope, the national economy.
Corporate law & M&A
«Foreign companies have shown little participation in M&A deals except for selling off their Ukrainian assets», Anna Zorya, Partner at Arzinger Law Office confirms
“Ukraine was one of the first to fulfill the FATF requirement regarding the disclosure of ultimate beneficial owners of legal entities”points out Olena Kibenko, Managing Partner at Kibenko, Onika & Partners Law Firm
Banking & Finance
“This year we have implemented several projects, which the Deposit Guarantee Fund can be rightly proud of” says Yulia Kyrpa, Partner at Aequo Law Firm
The reform-minded sentiments of lawyers are extended not only to the specific legal spheres of law-enforcement and the judicial sector. Experts are tak-ing an active part in developing legislative proposals and new regulations in the most rapidly developing sectors of the Ukrainian economy: agriculture, IT, energy, and pharmaceuticals. Apart from the benefits expected for business, implementation of the reforms requires substantial legal support. This means even greater demand for field-specific lawyers.
The high-tech industry in Ukraine is currently developing. It is now on the rise not least due to officials who were simply unaware of what was actually going on. It is only over recent years that the government have decided to pay attention to IT. However, such attention is hardly helpful.
The energy security of Ukraine is front and center among the reforms implemented in the country. Among the main objectives – to ensure access to the gas transportation system (GTS), its overhaul, demonopolization and reform of the natural gas market
"The state should take a more serious approach to investors willing to operate in Ukraine, to truly make it a partnership", says Yaroslav Petrov, counsel at Asters law firm
"Agricultural holdings, when approaching the year’s close with negative indicators, were compelled to enter into a direct conflict with creditors"said Ivan Mishchenko, managing partner of the Trusted Advisors Law Firm
Businessmen often treat bribes as essential expenses for their activities. As a the result, the total value of bribes reaches 3% of global GDP. While earlier the fight against bribery and corruption was taken care of by states, now this fight may get a new incentive — the non-governmental International Organ-ization for Standardization engages in the process
“Compliance is not only recommendations for the implementation of certain procedures and policies, but also a regular test of their efficiency,” said Andrei Pronchenko, Managing Partner at PwC Legal
Legal representation became the main budgeting practice for many law firms this year. Although judicial reform is far from complete, lawyers note qual-itative changes in judicial practice due to legal conclusions by the Supreme Court of Ukraine on certain categories of cases. However, the unity of prac-tice or well-defined trend of its further development is out of the question in some disputes
“According to clause 56.21 of the Tax Code of Ukraine, in the event of the existence of a ‘conflict of interests’ of the taxpayer and the oversight body, a resolution should be adopted in favor of the taxpayer”, Valentyn Gvozdiy, Managing Partner with GOLAW, notes
“The new law on the prosecutor's office is hardly perfect, but the inherent ideas allow businesses to look to the future with optimism,” Olena Pertsova, the Head of Dispute Resolution practice of Pavlenko Legal Group, believes.
Last year was generous with rule-making events in the criminal sphere. Some novelties in criminal and criminal procedural law, both those implemented realized and the declared, make lawyers and business representatives particular concerned, while significantly heating up the degree of expert discussion and public tension
The rules of business now require that a company security system be properly organized, for nobody is immune from searches. Not only companies can, but also they should, get prepared for searches. The company security plan should definitely include regular internal and external audits, a credibility control of business partners and employees, a consistent strategy of dealing with law-enforcement and well-timed PR campaigns.
Businessmen should take care in advance to prevent deprivation of property ahead of timerecommends AVER LEХ partner Vitaliy Serdiuk
«In Ukraine more and more top law firms are opening a white collar defense practice» Kateryna Gupalo, Counsel at Arzinger Law Office says
Ukrainian companies are quite active in deciding their disputes in international arbitration courts. Today, there is great demand for Ukraine as a respond-ent in investment arbitration. This provides lots of work for legal advisers, including Ukrainian law firms. But due to the insufficient promotion of arbi-tration in our country, big business representatives prefer to turn to reputed foreign arbitration centers.
"Unless discriminatory approaches and the lack of transparency in the decision-making of the state authorities are eradicated, Ukraine may become a frequent respondent in investment arbitration", says Sergiy Gryshko, Partner at Redcliffe Partners.
“Few professionals can provide competent expertise that would be deemed by the courts of foreign jurisdictions” states Alexey Kot, Managing Partner of Antika Law Firm
Another year has passed under the slogan of tax reform. However, the issue did not take a step further than conceptual discussion. Business still expects: reform first and the predictability and stability of tax regulation in the longer term
"Companies that want to operate successfully in the international market in the future are required to restructure their operations today, taking into account international tax policy", says Sergiy Oberkovych, Senior Partner with GOLAW
«The rules of play in international tax planning have been changing dramatically — the instruments effective today may harm the client tomorrow», сautions Pavlo Khodakovsky, Partner at Arzinger Law Office
"The fiscal authorities are capitalising on their freed-up time to run more sophisticated inspections." Serhiy Verlanov, partner at Sayenko Kharenko, comments on the most recent trend.
Notwithstanding a significant reduction in the size of the intellectual property service market, an active law-making process is being observed for the first time in 20 years. A certain competition exists between agents involved in draft legislation; however, they show solidarity on one thing - intellectual property cases should be considered in economic courts.
By exercising timely protecting of their intellectual property rights businesses can gain an advantage over their competitorsas noted by Alexander Pakharenko, Partner of Pakharenko and Partners IP and Law Firm.
For the Antimonopoly Committee of Ukraine the year 2015 was one of staff renewal and legislative messages . A complete change in the AMCU’s members was particularly marked by the dialogue between regulators and economic agents moving to a completely new level. There is a tendency for modifications in roles and the nature of the Committee’s activity: from a punitive agency to real assistance and development of competition. At the same time, there are decadent judicial tendencies, mainly related to an apparent increase in court fees.
The activity of the Antimonopoly Committee of Ukraine in the investigations field will increase. Business must work out communication strategies that are turned towards all instances of "interest" by the Committee. The presence of specially-developed compliance procedures can correctly build communication with the office and significantly reduce the risk of negative results in an investigation.