dimitry afanasiev chairman egorov puginsky afanasiev and partners

Dimitry AfanasievChairman

Egorov Puginsky Afanasiev and Partners

The Russian economy: The Russian economy: Change of approachChange of approach

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11

Through Through 1990’s and 2000’s1990’s and 2000’s, , the Russian economy relied the Russian economy relied heavily on the export of oil,heavily on the export of oil, gas and other primary gas and other primary resources to sustain resources to sustain economic growth and to economic growth and to help balance itshelp balance its federalfederal budgetbudget. .

Heavily underinvested, Heavily underinvested, Russian manufacturing hasRussian manufacturing haslost momentum in its technical development and fell far behind its lost momentum in its technical development and fell far behind its global competitors.global competitors.

Russian business and government understand its high time for Russia to expand its economy beyond resource extraction and become more integrated into the world economy.

Infrastructural revolution that is beginning in Russia needs the key competencies which can be imported sometimes only by buying stakes in the leading Western companies and attracting foreign investment, technology and management in Russia.

11The Russian economy: The Russian economy:

Change of approachChange of approach ______________________________________________________________________________

22Selecting legal counsel:Selecting legal counsel:Factors to watchFactors to watch

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1. “Bottom line” answers – straight shooters.

2. Is the relationship partner “hands on”? Or a traffic cop?

3. Standing with the judge.

4. Hungry American – stealing clients.

5. Doing the right thing – once a Russian client trusts its lawyer, such client expects the lawyer to make decisions for the client instead of constantly giving options and taking instructions.

6. Alternative billing arrangements.

7. Not too busy to deal.

Situation 1: Russian client → Foreign lawyer:

1. Standing with the judge.

2. Local firm for litigation: a) player; b) advocates’ advantages – immunity privilege.

3. English, and compatible technology.

4. Western professional standards.

5. Federal Chamber of Advocates – the source of reference.

6. CYA issue selecting foreign counsel.

7. Not to lose the client to another American law firm with a Moscow office.

8. Local counsel must understand client’s business.

22Selecting legal counsel:Selecting legal counsel:Factors to watchFactors to watch

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Situation 2. Foreign client → Russian lawyer:

The maturing of the Russian law firmsThe maturing of the Russian law firms _______________________________________ _______________________________________

1990’s 2007

33

Evolution of a Russian lawyer in the post-Soviet period

““The changes in Russia’s legal sector over the The changes in Russia’s legal sector over the past decade have been fascinating to watch…”past decade have been fascinating to watch…”


33

Russia is now encountering some of the same legal issues as the United States did 70 or 80 years ago.

It is amazing to see how legislation in a similar economy often follows the same

America, 1930’s

Russia, 2000’s

logic, and how similar decisions are often reached, even when there can be nearly a century separating the times in which the law answers a particular question in one country and another.

33

330+0+Russian-style “BARRISTERS” focusing on Russian litigation

550+0+WESTERN LAW FIRMS

with branches in Moscow advising Western

companies on deals in Russia and advising

Russian companies on deals outside of Russia. The

operating language is English.

The Russian legal market always consisted of two different markets that never communicated with each other:

services, local battles for corporate control, fights with the government, the real life and blood of the Russian business community. The operating language here is Russian, the practitioners are often nameless and solo and half the battle is fought behind closed doors...


Maturity factors:

Branding;

Systematic approach to marketing;

Multilayer structure;

Large-scale and international projects;

Specialization of the firm and personnel;

Size (matters…) 100<;

Problem of founding-fathers.

The recent phenomenon is the emergence of Russian law firms with a thorough understanding of Western professional and ethical standards of practice, who can, at the same time, effectively deal with the local conditions by being local players.

33The maturing of the Russian law firmsThe maturing of the Russian law firms _______________________________________ _______________________________________

Viktor Vasnetsov, Bogatyrs, 1898

44When a Russian law firm When a Russian law firm can prove valuable?can prove valuable?

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a Russian law firm is generally a more effective counsel in Russia

a Russian law firm which understands its Russian client and also understands the West can be very helpful to its client in managing his overseas interests by selecting and directing the local counsel as appropriate.

the tough experience of surviving in Russia makes for useful experience when operating in other third-world, emerging markets.

A Russian law firm can prove valuable in three A Russian law firm can prove valuable in three instances:instances:

“A successful and competent local law firm is almost always more effective in any market. Russia is a

pretty nationalistic place so the home advantage is even more

pronounced...”

Issues?Issues?

Research?Research?

Judgment?Judgment?

The problem is that there are very few successful and competent local law firms in Russia.

Such is the shortage of qualified commercial lawyers in Russia that young associates with commercial experience in Moscow now command top New York salaries…


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Many clients are simply not used to using a local law firm, at least when things are good…

A local law

firm

An international law firm

However, as the time goes by, I think that Russia will be dominated by two or three major national law firms with international law firms advising mostly on certain legal aspects such as an IPO in London.

I keep my mouth shut and getting

paid a lot!

55

An American expatriate lawyer in Moscow

Faces of the RussianFaces of the RussianLegal MarketLegal Market

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The Americans have overtaken us again!

A British lawyer in Moscow

55Faces of the RussianFaces of the RussianLegal MarketLegal Market

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Why am I invited to the French Embassy

cocktails only…?

A French lawyer in Moscow


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http://www.artsides.com/ru/item.aspx?ItemID=3201

DIPLOMA

«Can speak English»

CUM LAUDECUM LAUDE

If they fire me, I might have to take

the bar exam…

A Russian lawyer in an American law firm

in Moscow


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I am in charge…


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Partner in a Russian law firm

Can a Law firm do an IPO???


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Advocate of the Soviet Bar Association

What economic boom?...


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Chinese takeover project…

Chinese lawyers in Moscow


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LondonMoscow

St.Petersburg

MoscowMoscow

40 Bol. Ordynka, Suite 320, Moscow, 119017, Russia

St.PetersburgSt.Petersburg 22-24 Nevsky pr., Suite 132, St. Petersburg, 191186, Russia

LondonLondon3 Gough Square, London, EC4A 3DE

dimitry afanasiev chairman egorov puginsky afanasiev and partners

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