Legal journal charts nation's 50 most successful law practices
The nation`s lawyers are reaping the benefits of an improving economy and have seen their revenues steadily increase over the past several years. Large law firms reported significant earnings growth in 2002, while mid-sized firms reported steady, if not spectacular, growth.
Research published by Yuridicheskaya Praktika (Law Practice), a weekly newspaper, in late June showed that the country’s top 50 law firms earned Hr 180 million last year. The top 20 firms reported revenues of Hr 130 million.
The newspaper said that during 2001, the top 50 earned Hr 100 million, 42 percent more than in 2000. The top 20 earned Hr 83 million in 2001, compared with Hr 55 million the previous year.
Almost half of the leading 50 firms’ income is earned by what Yuridicheskaya Praktika calls the legal industry’s “golden ten.” In 2002, the total revenue of the 10 law firms with the highest revenues was Hr 88 million, up from Hr 60 million in 2001 and Hr 40 million in 2000.
Among the “golden ten” are Shevchenko, Didkovsky and Partners, Vasyl Kysil and Partners, Pravis, Kryzhanovsky and Partners, Dubinsky and Osharova, and Grishchenko and Partners.
Natalia Tkachenko, editor of the newspaper’s review of Ukrainian law firms, said that most firms did not wish for information about their financial activity to be included in the survey. As a result, no specific data was available on the firms it listed.
Vasyl Kysil, senior partner at Vasyl Kysil and Partners, said that the increase in revenues reflects the growth of local business.
“Foreign companies are renewing their interest in the market here after the financial crisis in 1998, and they need the help of law firms to operate. More and more, Ukrainian enterprises are asking law firms for professional services their in-house counsel can’t provide,” Kysil said.
Large foreign companies long established in Ukraine are still the main contributors to law firms’ profits, he said.
Kysil said that the increase in earning still doesn’t reflect the legal industry’s potential.
“Even though the top 50 firms almost doubled their revenue compared with 2001, I don’t think that says much about the rapid growth of the industry,” he said. “The law market is only forming now. The top 50 firms work with the most profitable companies, while mid-sized firms use legal services occasionally. There’s plenty of space for new firms. The industry’s growth could be much greater,” he said.
Anatoly Kulik, deputy head of the Kryzhanovsky and Partners law department, said that income growth was also the result of increases in law firms’ staffing.
According to Yuridicheskaya Praktika, over the course of 2002, the number of lawyers employed by the top 50 law firms grew by 34 percent to 1,008. In 2000, 709 lawyers were working in the top 50 firms.
Tkachenko said that 71 percent of the law firms listed by Yuridicheskaya Praktika reported increased revenue last year. Even so, a few large, well-established firms are reaping the biggest rewards.
“Only 5 percent of law firms can boast annual revenues of Hr 5 million or more,” Tkachenko said. “These firms were founded in the early 1990s, [and serve] large national and foreign companies.”
Almost 25 percent of the firms surveyed reported earnings of between Hr 1 million and Hr 5 million.
“These firms serve medium-sized clients,” Tkachenko said. “Among them are a few rather successful regional firms.”
Insiders expect the legal services industry to continue to grow over the next five years, with annual earnings increases of up to 30 percent.
“Until the industry is mature and stable relations between law firms and partners are established, earnings will increase significantly,” Kysil said.
