UBA News (#03 March 2015)

Legal Market in the New Realities

The ХI UBA Annual Legal Forum Development of Legal Services Market in Ukraine was held on 27 February 2015. The accent of the large-scale discussion on promotion of legal services and effective cooperation between legal practitioners and their clients was displaced to a considerable degree by inside processes in law firms. Obviously, the latest political and economic developments have made a substantial effect on the legal market. On the one hand, the legal market has entered an era of reforms in the judicial system and advocacy, on the other — law firms are forced to operate under the crisis conditions.

Timur Bondaryev, managing partner of Arzinger, presented a review of new challenges and principal trends that law firms faced in the last 12 months. The facts speak for themselves: lawyers provide functions not only in conditions of economic crisis, but also in conditions of occupation of territories and even military actions. The outflow of investors from Ukraine and consequently sizeable part of clients of law firms as well as in-sourcing have in unison pre-determined a slump in demand for legal services. At the same time lawyers, from their side, rely on the EU — Ukraine Association Agreement. The crisis has added a reduction of compensations, increase in competition in the labor market or even freelance working and activization of dumping to the daily routine of law firms. In the capacity of anti-crisis measures law firms have chosen staff cuts and review the social packages they offer to their employees, a shortening of the working, and re-orientation and establishment of new practices. Several months ago certain prominent lawyers preferred to quit partner positions in law firms for the benefit of a career in politics, and some prominent individuals currently occupy executive positions in state authorities. According to the speaker, such legal practices as anti-corruption, compliance, litigation, criminal and tax could actively develop in the near future. 

Valentyn Gvozdiy, deputy head of the Ukrainian Attorneys’ Council, managing partner of Gvozdiy & Oberkovych, shared his view on entering the European legal market. The speaker is confident that for Ukrainian lawyers the step of realizing their professional activity is possible only in the form of advocacy. Thus, in June 2014 the England-headquartered Solicitors Regulation Authority included Ukraine in the list of jurisdictions that grant demands of the Qualified Lawyers Transfer Scheme. In February 2015 an agreement was reached on adjustment of procedures of mutual admission to the attorney in the profession in Ukraine and Germany with the German Federal Bar. The procedure for inclusion of Ukrainian attorneys in the register of attorneys of Germany along with possibilities of doing legal business in this country was described in full.

Denys Bugay, president of the Ukrainian Bar Association, partner of VB Partners, submitted for the audience draft provisions of advocacy reform in Ukraine. The reform proposals contributed are full of various innovations that will make the professional activity of attorneys more effective. Among them are: an attorney receives an exclusive right to represent interests of the client in courts (in-house lawyers of enterprises and state bodies are excluded); the activity of escrow agent is permitted; an opportunity of application of the simplified system of taxation appeared; access to all state registers and data bases; enhancement of attorney’s inquiry and receipt of all kind of information (excluding secret information); collection of evidences by means of any methods that are not prohibited; fixation of proceedings through the instrumentality of any unprohibited methods without the need to obtain any permits; access to a client at any time and place; partner agreements and many others.

Withi the framework of the event the participants received an excellent opportunity to find solutions to questions that were raised, and those that unexpectedly arose before the Ukrainian legal market.

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