Gennady M. Khareyn, managing partner in Ukraine for Wolf Theiss, said his firm set up shop with an office in Kyiv as part of the firm’s vision of strategic expansion in the region, and sees strong growth opportunities in the country.
Wolf Theiss, a law firm founded in Vienna 50 years ago, launched its practice in Kyiv this February. The arrival of Wolf Theiss, which has a strong presence in Central, Eastern and Southern Europe, marks the continued advance of foreign law firms to Ukraine. One of their competitors, Vienna-based e|n|w|c law group, established a practice in Ukraine last May.
In this Kyiv Post interview, Gennady M. Khareyn, managing partner in Ukraine for Wolf Theiss, said his firm set up shop with an office in Kyiv as part of the firm’s vision of strategic expansion in the region, and sees strong growth opportunities in the country.
KP: Please describe your law firm in brief and its strategic decision to enter the Ukrainian market?
GK: If you look at a map showing where Wolf Theiss was present before opening the Kyiv office, you would see a big hole in our regional reach. We had offices all over Central, Eastern and Southern Europe, but there was nothing in Ukraine, a vast market of 46 million people. The opening of our Kyiv practice is an extension of the firm’s strategic vision for expansion. And there were a number of projects where our clients were in Ukraine and wanted us to represent them here. They are not only German and Austrian clients, but international ones, American, English, international development organizations, development funds, real estate funds that are very active in Ukraine.
KP: It just so happens that your law firm is entering Ukraine amidst a nasty economic crisis. Do you think this is a good time to enter the Ukrainian market?
GK: Wolf Theiss has been thinking about entering the Ukrainian market for at least the last two or three years. But we didn’t have the internal organizational resources to do it. Ukraine is a very dynamic market. Things change so quickly here that a number of partners who visited Kyiv once every quarter never had the right level of confidence, of support on the ground. I was specifically hired to set up the office..
As far as the current economic situation is concerned, ‘what is one man’s crisis, is another man’s opportunity.’ The rents for office space are now half or even in some circumstances one third of what they were six months ago. There are more quality lawyers looking for work and it is easier to find dedicated, motivated and very experienced individuals. When the market was up, many top lawyers were reluctant to leave their jobs. So this is a very good opportunity for us to get in on the ground floor.
KP: Do you expect the economic crisis to create large demand for legal services, specifically bankruptcy, insolvency, restructuring and ‘merger and acquisition’ deals?
GK: Well, yes. I would say that right now a lot of the activity is focused around debt restructuring, some insolvency and some M&A deals, although our real estate group is also very busy right now. In addition, this year should be a pretty good one for legal work in Ukrainian privatization. It is not a secret that the government needs money to cover its projected budget deficit.
KP: What other niches are you looking to fill in Ukraine’s legal services market? Is one of your main aims to service existing Austrian clients who are active in Ukraine?
GK: Though Austrian companies represent a natural client base for us, Wolf Theiss has never been focused on Austrian or even German-speaking clients, per se. There are certain Austrian competitors that are present on the market and they operate what I call a ‘hub and spoke system.’ You have a hub, Vienna, and then you have all these other offices to which Vienna directs work. So, it’s mostly a one-way flow. Wolf Theiss doesn’t work that way. About 85 percent of our clients use more than one of our offices and many times Vienna is not even involved. We are open to attract Ukrainian clients and other clients that are doing business in Ukraine. We didn’t open an office in Ukraine simply to sit here and wait for Vienna to send us Austrian work. That is not our vision of how a legal practice should be built.
KP: Nevertheless, how much bilateral business is there between Ukraine and Austria?
GK: Austria has been heavily involved in developing the Ukrainian economy. The level of exposure that Austrian financial, construction and real estate companies have in Ukraine is disproportionately large to the actual size of Austria and its economy. In terms of activity in the banking sector and M&A transactions, Austrian companies hold the second or third place in Ukraine during recent years. The top Austrian banks, investment companies and real estate firms are here. We are doing work for them elsewhere. Why shouldn’t we be doing work for them in Ukraine?
KP: Since you just arrived on the market officially launching your practice in February, this would be a time to introduce your team.
GK: We have a very good, and exceptionally tightly-knit team. Currently we have three partners. Our legal staff consists of 12 individuals. I hope that in two or three months we will have about 18 lawyers on board.
I was born in Ukraine but was educated in the United States of America. I went to college and school in New York City and graduated from Columbia Law School in 1994. More recently, I worked in Russia … for 12 years.
