New Russian front
5 December 2011 | By Dale McEwan
5 December 2011
5 December 2011
7 September 2009
6 December 2010
28 June 2011
The merger between Magisters and Russia’s Egorov Puginsky is a sign of the growing interest being shown in Ukraine by its powerful neighbour, says Dale McEwan
Ukraine’s legal market has seen a relatively small amount of movement in the past year in comparison with other jurisdictions.
The most significant transition was the announcement that the market was to lose Magisters, in a move that saw the firm merge with Russian heavyweight Egorov Puginsky Afanasiev & Partners and erase its name altogether.
“They’ve created a CIS [Confederation of Independent States] powerhouse,” says Beiten Burkhardt Kiev partner Felix Rackwitz. “It’s a shame because Oleg Riabokon and Serhii Sviriba built up Magisters from scratch. It was one of the top Ukrainian brands and now it’s gone.”
“The interesting thing is that Magisters was a brand in the market,” adds colleague and partner Julian Ries. “Foreign firms knew Magisters. I believe this was favourable for other Ukrainian law firms. There may be foreign firms who’d prefer to work with an independent Ukrainian firm rather than a Russian subsidiary.”
The move created a e115m turnover (£99m) firm with more than 300 lawyers, including 27 partners, across offices in Astana, Kiev, London, Minsk, Moscow and St Petersburg. The merger was preceded by the departure of corporate head Oleh Marchenko, who started his own firm, Ulysses.
Among more recent developments, Tatyana Slipachuk relocated from Vasil Kisil & Partners to Sayenko Kharenko in September 2011 to head up the firm’s international arbitration and international trade groups. She joined as a partner along with two senior associates and one associate.
Slipachuk, who was also in the partnership at Vasil Kisil, says the motivation for her move concerned the difference in the strategies employed by both firms in relation to the development of her practice areas, as well as opportunities for her specialism.
“International arbitration needs cross-border deals and mergers,” she says. “Sayenko Kharenko is focused on international transactions. Now we have the possibility to make a serious impact on the market because we can combine four practices - financial, corporate, litigation and international arbitration. In a time of crisis this combination will be extremely important. We’re already overbooked with international arbitration linked to financial and corporate.”
“It was a risky move,” comments Baker & McKenzie partner Hennadiy Voytsitskyi. “But in litigation there’s a lot of work these days. Our litigation practice is super-busy.”
Slipachuk’s exit from Vasil Kisil was followed by further departures because of the firm’s concentration on domestic activities. She says that now is a good time for the Ukrainian legal market to think hard, acknowledging the merger between Magisters and Egorov and its effect on the market.
“It’s a time for firms to consider the expertise they can offer,” says Slipachuk. “For many years [Egorov] have had big ambitions in international arbitration.”
These developments come at a time when business integration and an increase in Russia-Ukraine projects, particularly in the steel sector, could lead to a higher number of disputes between the two countries.
“During the past few years we’ve seen much more investment in Ukrainian businesses by Russian businesses,” points out Norton Rose head of Russia and CIS dispute resolution Yaroslav Klimov. “It’s quite obvious that Russian business is interested in the Ukrainian market.
“Inevitably, investments always produce a number of disputes. I think economic growth in Ukraine and the interest from Russia are securing the dispute resolution market. We see potential in the Ukrainian dispute resolution market.”
Klimov adds that international firms dominate more than half of Russia’s dispute resolution market, whereas in Ukraine the local firms are the heavyweights.
“It’s not that it’s not an interesting market [in Ukraine],” he says. “But it’s still a developing one.”
Looking to the future, and further afield, Lavrynovych & Partners managing partner Maksym Lavrynovych says the firm may open an office in either Austria or Switzerland, possibly next year. It has a number of clients in these jurisdictions and Ukrainian businesses are interested in these regions. Any new office would focus initially on real estate and financial markets, and there may also be the potential to serve overseas IPOs.