The Ukrainian legal market, like the country itself, faces substantial challenges and changes. Despite the largely chaotic rather than stable economic and political factors, it is still possible to underline the most crucial tendencies within the market.
First of all, it is obvious that a considerable part of the premium segment is shared among 10-15 law firms, both local and international. It is particularly evident in such practice areas as Corporate and M&A and International Arbitration as well as such industries as IT, Telecom, and Pharmaceuticals.
The ongoing transformation in the political, economic, and social life of Ukraine results in an increase in demand for certain legal services previously less popular with clients. For instance, starting from the beginning of 2014, the National Bank of Ukraine has withdrawn the licenses of more than 80 banks – slightly less than half of all banks operating in Ukraine. As a result, the Deposit Guarantee Fund, a specialized governmental institution of public administration established to protect the rights of individual depositors (natural persons) in the banks in Ukraine, according to its officials, currently faces more than 100,000 lawsuits and thus requires assistance from a number of outside counselors. As a result, such practice area as Litigation with State authorities, including the State Fiscal Service of Ukraine, remain in great demand among foreign businesses which cannot tolerate political chaos in Ukraine.
White Collar Criminal Defense is growing rapidly among multi-practice law firms as well. Although only a few significant market players even considered providing such services to clients five years ago, now, as a result of the proactive work of, among others, the National Anti-Corruption Bureau of Ukraine, White Collar Criminal Defense is viewed as potentially one of the fastest growing practice areas on the market.
Leading time in privatization of State-owned enterprises did not bring the expected work to Corporate practices. Moreover, the first attempt of the Odessa Port Plant privatization turned out to be a fiasco for the Ukrainian government, which did not give much hope to the legal market.
Local law firms have become more globalized, as, enhanced by strong specialists, many firms are looking for a broader global prospective. Thus, many top ten market players work through international legal networks and alliances which provide them with a workload in certain practice areas.
Transparency and non-corruption policies in the legal market still remain vivid topics when it comes to market estimation and evaluation. Recent research of the local services market published by Delo.ua in early 2016 showed that over 50% of market players were contributing to the country’s shadow economy – with the legal market being no exception. Still, most international clients choose a compliant and above-board service provider in contrast to one who tolerates corruption and evades taxes.
While the expectations for the quality of legal services only increase, their price does not, as the foreign currency rates, which have been more or less stable for the past year, have not affected the pricing policies of law firms as much as they did in the past. Many international clients – in addition to their local counterparts, of course – require rates in local currency (UAH) to avoid the possible fluctuation of exchange.
By Andriy Stelmashchuk, Managing Partner, Vasil Kisil and Partners
This Article was originally published in Issue 3.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.