In her interview with the Post, Ilona Zekely says that developing in-house talent is one of her firm’s main challenges.
Ilona Zekely is managing partner of Schoenherr Ukraine LLC, Attorneys at Law, where she specializes in real estate, mergers & acquisitions and corporate and commercial law. She is a member of the Austrian and Ukrainian Bar Associations. Zekely focuses on advising clients on market entry and investments in Ukraine. A University of Vienna graduate, she joined Schoenherr from Baker & McKenzie.
Schoenherr was founded in 1950 in Vienna and opened its Kyiv office in 2006.
In 2008 Schoenherr won the International Financial Law Review (IFLR) “Austrian Law Firm of the Year Award,” and was named “SouthEastern European Law Firm of the Year 2008” at the Chambers Europe Awards for Excellence.
Zekely says that developing inhouse talent is one of her firm’s main challenges.
KP: How has the legal environment changed in the last year? How competitive is Ukraine’s legal market?
IZ: Overall, 2007 was a booming year for international legal businesses and significant investments. A steadily increasing flow of foreign investments into the country eventually predetermined the Ukrainian economic growth during the year. This in turn allowed a number of sound transactions, including acquisitions of assets, crossborder finance and developers’ projects to take place. Being traditionally linked with the general pace of the economy, the Ukrainian legal market reacted to the increased demand by furnishing new services and opening new offices.
Some international law businesses increased the number of their legal personnel. Last year surprisingly brought many new establishments of nonUkrainian law firms. In October CMS Cameron McKenna LLP opened its offices here. Francebased Gide Loyrette Nouel opened its office in Kyiv in late 2006.
International expansion in turn painfully hit the owners of the national law firms with critically increased lawyers’ salaries. The positive consequences for professionals who are in demand are obvious; nevertheless many Ukrainian employers are in fact not ready for such a leap. High salaries normally result in increased hourly rates. Of course such a leap was also caused by the high rate of inflation, and commercial property lease rates which now are between $130150 per square meter in the downtown and surrounding districts and will only increase.
It is important to note that recognized lawyers in investment projects and crossborder deals are in greater demand than ever before.
KP: How is Ukraine’s legal maturation process proceeding? What are the most significant trends?
IZ: In brief, the main trends on the Ukrainian legal market can be currently summarized as: active development, further structure adapting, gradual shift towards deeper social involvement of the legal profession.
Changes in partnership and new appointments are rather notable features of today. In this respect development of the management of law firms is conditioned not only by the market challenge but also by internal processes in each individual firm.
The year 2008 will be characterized by upcoming restructuring and rebranding among certain prominent Kyiv law firms.
International law firms face stiff competition from a number of professional and reputable domestic firms, with a long history in the market, including, Vasil Kisil & Partners, Asters (formerly known as Shevchenko, Didkovskyi and Partners), Sayenko Kharenko, Volkov & Partners, and Magisters. These firms have plenty of potential for further growth, mostly through mergers and acquisitions, some of which have already taken place and more are on the horizon.
Overall the market witnesses an increase of lawyers’ skills and qualifications. Along with this professionalization, headhunting of experienced lawyers is booming. One also can note the increased social activity of lawyers.
Furthermore, one can easily identify another trend of emerging fullscale collaboration between law companies both on the national and the global level. On the global level the Ukrainian law businesses participate primarily in such international networks as World Services Group, TAG Law, Lex Mundi, TerraLex, International Business Law Consortium.
KP: What are the unique challenges facing international law firms in Ukraine? How do you mitigate the risks associated with Ukraine’s notoriously corrupt courts?
IZ: So far, our clients have not faced any problems with the local courts. Large crossborder investment disputes are nowadays mostly resolved through international commercial courts.
KP: What legal services are in the most demand now? Is M&A activity still high, or has it tapered off?
IZ: The most sought after legal services are currently corporate, tax, commercial, labor law, intellectual property, privatization, securities, bankruptcy, competition and litigation law.
There was and still is a high volume of M&A activity in Ukraine. In particular, the public M&A market in the recent year was very active in the following areas:
Banking (acquisition of 100 percent of TASKomertsbank and TASInvestbank by Swedbank; the acquisition of 95 percent of Ukrsotsbank by Unicredit Group through Bank Austria Creditanstalt)
Insurance (acquisition of 62 percent of the Ukrainian Insurance Group by Vienna Insurance Group)
Oil and gas (acquisition of 50 percent of Regular Petroleum Ukraine by Moravske naftove doly; acquisition of the Ukrainian assets of Cardinal Resources Ukraine by Kuwait Energy KSCC)
Food industry (acquisition of 100 percent of OJSC Rosynka Kyiv soft drinks plant by Orangina Group; acquisition of 100 percent of Sandora, the leading domestic juice manufacturer, by Pepsi Corporation)
KP: What is your forecast for the legal market over the next few years?
IZ: The Ukrainian legal market is doomed to follow the trends of the global market. I assume that legal practice will be increasingly shaped as any other type of business activity, law firms will become like corporations, like those in leading Western legal markets. This, in turn, will call for gradual changes in professional patterns and approaches of Ukrainian lawyers.
Once such global players as Clifford Chance, Cameron McKenna and others settle comfortably in the domestic market, the competition will inevitably tighten. Although, they still need to gain a local reputation which they enjoy on a global level. The market is such that there will always be a demand for law firms of all shapes and sizes, but there is no doubt that the market will eventually see consolidation. Although this will probably only happen once the competition increases to a critical level. The arrival of large international players will further professionalize the market and increase the quality of legal services. This development will spill over onto local players.
KP: How difficult is it to recruit qualified legal talent in Ukraine? Are Ukraine’s universities producing qualified lawyers?
IZ: Legal business is a people’s business. Talented lawyers are the asset and product of every law firm. International brands, technologies, clientbase are all for nothing if you don’t have a quality team. To recruit or train inhouse talent who can eventually become partners is now considered a main challenge.
Engagement of the qualified personnel is easy on one hand and difficult on the other. Many think that knowledge of codes multiplied by informal contacts with state authorities makes a good lawyer. But we look at this differently. Potential candidates should demonstrate some inborn talent for law and this is often not the case. Besides, for us a good lawyer is one who prioritizes law over all else, regardless of how rough that sounds.
Obviously, constantly rising salaries does not make recruitment easier. Therefore, we, like all other law firms, are in constant search for potential jewels and routinely look through hundreds of candidates.
I would not say that qualified lawyers are produced by the universities straight away. Unfortunately, an academic background is not duly linked with real practice here, therefore at least some years of mastering are always needed to produce a real lawyer. Another frequent problem is poor legal writing and verbal skills in English or any other foreign languages.
