Legal Market Overview
The international sanctions regime has had a noteworthy impact on the Russian Federation, although reports by the International Monetary Fund suggest the influence of the sanctions is noticeable but not drastic on economic growth; with oil and gas production amounting to a third of Russia’s gross domestic product, the price of oil has played an important role in allowing the country’s economy to remain stable.
As Western sanctions increase, certain segments of the legal market remain less active. Practitioners report mixed experiences regarding the condition of the local M&A market, and the level of inbound business activity remains lower than the pre-sanctions regime. While the private equity space has also taken a notable hit, significant transactions can still be observed in the retail and digital sectors. The technology industry has also remained a core interest for the Federal Antimonopoly Service (FAS), which has seen substantial activity following the recent expansion of its powers.
The volume of insolvency-related proceedings aimed at liquidating failing companies has been on the rise, with the construction sector experiencing a substantial hit. The arbitration arena is also increasingly busy, with two new permanent arbitration institutions (the Hong Kong International Arbitration Centre and the Vienna International Arbitral Centre) receiving permission to administer disputes in Russia.
The legal market also remains turbulent in terms of movement with Jones Day closing its Moscow office in late 2019; the move is indicative of the wider trend of international law firms struggling to retain a strong market presence in the Russian market. Exceptions can be found with Dentons gaining traction: in mid-2019, the firm recruited corporate partner Konstantin Kroll from Orrick, Herrington & Sutcliffe (Europe) LLP. Bryan Cave Leighton Paisner (Russia) LLP, Herbert Smith Freehills and Baker & McKenzie – CIS, Limited also maintain their positions in the market.
However, domestic law firms continue to be on the rise; leading arbitrator Baiju Vasani moved from the London office of Jones Day to domestic firm Ivanyan and Partners, and Egorov Puginsky Afanasiev & Partners and ALRUD Law Firm remain market leaders across multiple practice areas. Smaller Russian firms are also experiencing substantial growth.