UK-born Egons Pikelis is a Partner and Head of Banking/Finance at Ellex Klavins in Latvia.
CEELM: Run us through your background, and how you came to Riga.
E.P.: I was born to Latvian parents who were refugees during WWII. The house we lived in until I was 16, which we shared with my cousin’s family, was an old doctor’s house in the Birmingham suburbs with an enormous garden. My father’s family were farmers in Latvia, and so the garden became a little piece of Latvia. We grew a lot of our own fruit and vegetables, and we kept bees, and while my parents went out to work I would spend the day at home with my grandmother. Each one of us in the house had a beehive allocated to him or her, although the only ones who ever went near the bees were the two grandmothers. When the bees swarmed, they never did so in our garden, but in someone else’s further down the road. The two grandmothers would don their white spaceman outfits and arm themselves with smoke canisters to go and find the swarming bees. The fact that neither of them spoke a word of English only added to the wondrous sight of two smoking octogenarian spacewomen knocking on every door in street looking for their bees. But I didn’t think anything of it at the time, and only later in life did I come to realise that the neighbours must have thought us slightly odd, to say the least.
The drama of my first day at school when I was five years old also passed me by somewhat, as, having spent all of my time with the beekeepers, I didn’t speak a word of English. I only found out a couple years ago from my mother that on that first day at school she was taken aside by the headmistresses and more or less accused of child cruelty. Within a month or so, I was speaking pretty passable English, so I’m not sure what all of the fuss was about, but in 1960’s England it was probably a rare event, although I suspect that things may have changed in the meantime.
Once I had started school, I continued to live a dual existence, one in the English world and the other in the Latvian exile world. Latvians, not only in the UK, but in most countries in which they ended up after the war, were pretty well organized, both socially and politically. I spent the majority of my spare time attending all kinds of Latvian gatherings and events, and as a result, I have always had a circle of Latvian friends from other parts of the UK, and later from other countries. I also spent a year in between my A-level years at a Latvian school in Muenster, in Germany. At the time it was the only accredited Latvian school in the West, and while I probably gained more in social terms than academically, I’ve retained a fondness for bier und currywurst.
Such an environment, however, is pretty politically charged, and the resentment that exile Latvians (and other East Europeans) felt towards the Soviet Union left a mark on those of us who were born outside Latvia as well. It also explains why my first degree wasn’t law, but Russian and Russian Studies. At the time you could have called me a Sovietologist, but as the Berlin Wall fell a year after I graduated, I instantly became a historian by default. It was then that I turned to law and subsequently qualified with Simmons & Simmons. At the time, the big law firms were beginning to look for lawyers who had alternative skills and experience, and I’m grateful that Simmons & Simmons saw something in me which was worth pursuing. Arguably that’s a policy that only the big firms with the appropriate capacity and resources can follow, but I still think that it’s a far-sighted approach.
But these were tumultuous times, and after the Soviet Union collapsed, Latvia regained its independence in 1991. In 1994 I got a call from Raimond Slaidins, who was a Latvian lawyer from California, and who had set up a firm in Riga with another US lawyer from New York, Filip Klavins, and they wanted to know if I was interested in joining them, which after a period of reflection, I did.
CEELM: Was it always your goal to return to Latvia and work in the country?
E.P.: Before the Soviet Union collapsed, few of us thought considered that such a question would even be a possibility. The edifice seemed impenetrable, and the underlying would even be a possibility. The edifice seemed impenetrable, and the underlying contradictions were to a large extent hidden from the outside world. But once Latvia regained independence, I think that it is fair to say, that, for me at least, it was inevitable that I would return to Latvia. From a UK career perspective, I knew at the time that it would have been better if I would have stayed at Simmons & Simmons longer. Leaving them was an immense risk, as no-one knew which way Latvia would be headed, and whether our firm could survive in the longer term.
But these were highly interesting times, and ones where you felt that you could tangibly contribute to change. I think a sense of historical perspective made me understand that these events don’t happen every day, and in those circumstances you can either watch from a distance or you can get involved. In the early nineties, Latvia saw the usual story of wealth accumulation and turbulent politics, but having come through it, I’m proud that, rather than seeking refuge in strong-man politics, Latvia has managed to stick to its chosen path of being an open and democratic society. It’s far from being perfect, but looking back from the perspective of those times, I think it’s pretty cool what’s been achieved.
CEELM: Tell us briefly about your practice, and how you built it up over the years.
E.P.: Latvia’s approach after regaining independence was to sweep away in one go all the legislation from the Soviet era (apart from the labor law and, interestingly, the criminal law), and replacing it with Latvia’s pre-war constitution and laws. Nothing wrong with that other than nobody had any experience in interpreting or applying these laws, and crucially, a lot had happened in the world between 1940 and 1991. In addition, such business practices as there were, were rooted in Soviet tradition. This had some interesting results. I was once advising a Swedish investor who was going into a JV with an agro-products producer, which was represented by an old-school engineer who had privatized the plant. We were negotiating an SHA for the joint venture, and had spent several hours in the meeting discussing the various points of the SHA, often quite heatedly. At one point, my client had to leave the room, leaving me alone with the agro-products chap, at which point he turned to me, put his hand on my arm, and looking me in the eyes, solemnly said “son, I know that you’ll make us a good agreement, but please, no more than two pages long, OK?”
At a certain point in the early 2000’s, we felt that the local legal environment had matured sufficiently and our firm had grown enough that we were able to start working on a practice group basis, at which point I headed up the banking & finance practice. Our practice has to date focussed mainly on cross border activities, and while I’m of the view that your standard of work is the best advert for your practice, we also invest a lot of time and effort in maintaining relationships with the international institutions who have an interest in our market and with the major international law firms who represent such institutions. Being members of the best professional networks (such as Lex Mundi and World Services Group) has also been a great help.
CEELM: What’s your general opinion about Latvian law and the legal climate in the country, both for lawyers and for investors?
E.P.: I tend to subscribe to Bismarck’s view about being able to live with poor laws and good civil servants, but not with good laws and shoddy civil servants. In Latvia’s case, I don’t consider the laws to be poor, but it’s the application which sometimes tends to fall down, although it is far, far better now than it used to be. Much of Latvian law is based on EU legislation now anyway, and the underlying tradition of Latvian law follows the Germanic system, so the framework is pretty sound. But there are certain factors which are problematic. One is a lack of expertise, particularly in technical areas, such as the more complicated commercial transactions. Some practitioners still prefer arbitration rather than the courts, particularly in complex transactions, but there is quite a lot of training of judges going on which seems to be raising standards. Another area is the relationship between business and politics, and the ripple effect into the legislative environment. Latvia has been struggling to get some areas of its insolvency administration sorted out, and while Latvia is not alone with this problem, it has become a big topic of debate in Latvia, and hopefully now there may be the impetus to sort this out.
CEELM: There are obviously many differences between the legal markets of Latvia and the UK. Can you describe some of the more interesting/challenging differences? What stands out the most?
E.P.: When people find out that I’m a UK solicitor, I get asked questions about why I’m not wearing a wig, which given the state of my hairline these days, probably wouldn’t be such a bad idea.
Apart from the obvious difference between a common-law system and a civil law system, I think that the most obvious differences are in the still nascent legal traditions of Latvia and in the size of the respective markets. Latvia has had no shortage of excellent legal scholars, including in tsarist times before Latvia gained independence, but the experience in interpreting, applying, and developing its legislation and in legal practice has been severely curtailed by geopolitical events. In contrast, the UK legal tradition is arguably the standard of expertise and impartiality which most other countries aspire to, at least those countries which respect a rules-based system.
The other aspect is the size of the market. In Latvia, we can never expect to reach the strength and depth of the expertise which you find in the UK. We’re inevitably following legal trends in Europe and beyond, whereas the UK is often at the forefront of legal innovation. So I think it will be interesting to see whether and how the effects of Brexit will impact on the role of the UK legal system, particularly with regard to the rest of Europe.
CEELM: What cultural differences between the two countries strike you as most resonant and significant?
I think the fact that Keeping up Appearances is still going strong here in Latvia. That’s is a bit of an eye opener for me.
Latvians are a very down to earth nation, and their world view is informed by historical events. There isn’t the underlying sense of permanence about the institutions of state or of society which you find in the UK, but people have a far greater sense of self-reliance. That’s not to say that Latvians don’t invest a lot of faith in their country. Despite the Brexit vote, I’d say that Latvians have a clearer notion of the significance of statehood, because they have experienced what it means to have it taken away. But even so, it doesn’t stop Latvians arguing over what that means. As they say here, if you put two Latvians into a room, the result will be three political parties.
But Latvians have a strong affinity for the British view of the world. They take similar views on trade, political freedoms, and values, although there are limits. Nobody in Latvia gets cricket. “Five days?!!”
CEELM: You’ve lived in Latvia for some time now. What significant changes have you seen during your time there, in the legal industry?
E.P.: In the early nineties, we were almost the only firm offering a Western standard of legal service. That has changed in the meantime. A lot of people have taken advantage of the opportunity to travel, study, and work abroad, which has also had an effect on the legal industry. Particularly in the sphere of business law, the overall standard has risen immeasurably, which, while increasing competition, is something that I can only applaud.
But the legal industry doesn’t exist in isolation, and I’d say that the level of professionalism within the professions in general, and within the business community – especially the innovative spheres such as start-ups – is particularly encouraging. Estonians have managed to give themselves a good press with their digital economy message, which we will deservedly hear more of during Estonia’s presidency of the EU, but there is evidence that the talent and innovation in Latvia has existed for a while, and that we’re on the brink of a break-out moment in terms of recognition outside Latvia.
CEELM: Does your upbringing and education in the UK give you a particular advantage or make you particularly useful to clients in some way? How?
I don’t think that my UK upbringing and education makes me know anything in particular that any other lawyer in Latvia wouldn’t or shouldn’t know or which would provide me with any particular advantage. Obviously having gone through the ranks at Simmons & Simmons was excellent training, not just with regards to the practice of law, but also as a legal professional, which is something that clients appreciate. Looking back, however, I suspect that the main benefit of the UK background has been the appreciation of the difference between principle and expediency in the choices that you make, and by extension, which you extend to your client. I think that it is an increasingly relevant distinction in our lives, and not just with respect to the practice of law.
CEELM: Outside of the Baltics, which CEE country do you enjoy visiting the most, and why?
E.P.: We have three relatively small children, so road trips are a challenge, and a lot of the CEE region is, to my mind, within road trip range. So, apart from business trips, my travel within the CEE region has been pre-kids. Prague is everyone’s favourite, and a few years ago, we had a firm trip to Prague which was great. A while before that I went with some friends on a hiking trip in the mountains around Poprad. Compared to the Alps, it is much less manicured but all the more charming for it. It is also the only place I’ve encountered a group of six nuns in full garb with white Nikes doing a mountain trek. On the way there we spent a couple of days in Krakow, which for a history buff is a pearl, but is also simply a beautiful town in its own right.
CEELM: What’s your favorite place to take guests in Riga?
E.P.: While I wouldn’t exactly describe it as a favorite, I would encourage anyone visiting Latvia to visit the Museum of the Occupation of Latvia. Our firm has supported the museum on a pro bono basis for approximately 20 years. For a visitor, I think that it is difficult to understand Latvia today without having an insight to what is shown at the museum.
Much to my surprise, it turns out that Latvians are big foodies, not wedded purely to potatoes, pork, and pickled cabbage, and we have some really good restaurants, some in the old town, but also in the area around the old town – the embassy quarter – which prides itself on having some of the finest art nouveau architecture in Europe.
This Article was originally published in Issue 4.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.