Considering Ukraine’s legal landscape against the backdrop of the ongoing war, Hillmont Partners Senior Partner Valentyn Zasukha delves into planning, client relationships, sector-specific issues, strategic adaptations to new realities, and economic prospects.
“The reality we face today is one of profound uncertainty, a condition we’ve somewhat grown accustomed to, given the circumstances of the war,” Zasukha begins. “This unpredictability has made long or mid-term planning nearly impossible for legal practices. Our focus has shifted from pioneering and new client development strategies to business development efforts that are targeted at flexibility and cultivating lasting relationships with key clients,” he shares. “The beginning of 2024 was particularly challenging, marked by a stark contrast from the optimism we harbored last year; now, it’s all about keeping our team’s spirits high and adjusting to the new reality that the legal services business operates in.”
Speaking about the changing nature of legal transactions due to the war, Zasukha reports that “the last few transactions we’ve managed were primarily divestment requests from Ukraine, a reflection of the current sad reality. In light of that, our strategy has always been to remain flexible and plan cautiously, understanding that forward momentum, no matter how slow, is crucial,” he says.
“The volatility of market movements cannot be overstated, particularly in the agricultural sector, which has faced significant challenges. While crop yields may be sustainable, the disruption of grain corridors and transportation logistics to the West has had a considerable impact,” Zasukha explains. Additionally, the “complete loss of the Azovstal Metallurgical Combine – a famous Ukrainian metallurgical facility located in Mariupol – to the aggressors dealt a significant blow to the metallurgical industry, removing a key player from our market,” he comments.
Given such market volatility, it is unsurprising that reconstruction investments are a prominent discussion point for investors. “There’s considerable discussion around multiple restructurings across various sectors, driven by a sense of anticipation for post-war reconstruction,” Zasukha says. “This includes a wide range of projects, from infrastructure and building to defense. The IT/Tech sector, in particular, is seeing a surge in R&D related to defense.” He remains hopeful that, once the war is over, Ukraine will be as “synonymous with technology as we were with agriculture and metallurgy before the war.”
Zasukha reports that businesses are very keen to protect their assets and investments: “We are now actively providing legal assistance to businesses that have experienced significant losses due to the war to obtain compensation through the creation of mutually beneficial coalitions with litigation funds.” Also, “we’ve seen the newly minted Supreme Justice Council take steps towards ensuring legal stability, which is crucial for both market operations and future investments,” he says. “By improving the predictability of court decisions, we’re paving the way for a more stable legal environment. This, coupled with potential sanctions against aggressor-affiliated assets, could open up new investment opportunities once systematic processes for asset confiscation and market reintroduction are established,” he explains.
“It is clear that significant challenges lie ahead, and substantial recovery efforts will be needed once the war concludes. However, there’s a strong sense of resilience and a collective desire to rebuild.” Zasukha believes the reconstruction focus will likely be on infrastructure, “particularly in sectors like agriculture and defense, attracting domestic and international investors. Through all this, the legal sector will play a critical role in navigating the complexities of reconstruction, ensuring stability, and fostering growth.”