Igor Smirnov is Head of Legal at ING Bank in Moscow. Prior to joining the bank in May 2007 he worked for UniCredit Bank and Peresvet Bank. Before joining Peresvet, he started his career by launching his own law office fresh out of university.
Please tell us a bit about your career leading up to your current role.
I.S.: I started my professional path in 2001 by organizing my own firm. It was a small enterprise with just three young lawyers, all university classmates. We did have some interesting work, but at a certain moment we all began to realize that we needed mentors in the profession, people who were experienced and wise. So we all started to look around.
After a long chain of interviews I got an offer from a small Russian bank called Peresvet. It had a team of three lawyers, led by a very experienced Head of Legal. I learned a lot there. It was an exciting time – with litigations, bankruptcies, corporate takeovers, and security enforcements. It was the time when the Russian legal system was still working out its new principles and I was lucky to have the opportunity to see all this from the inside. This was also a time of active development of regulatory frameworks for banking, and at Peresvet bank I also learned the basics of prudential supervision.
This bank was a great place to work, but it was a purely Russian bank with very limited international exposure. Having obtained an LL.M. diploma, I was starving for an international environment. Eventually I was offered a senior lawyer position with a bank owned by a large German banking group, at that time called International Moscow Bank, which after a while was bought by the UniCredit Group and became UniCredit Russia. At that stage of my career I focused on transactional work and dug deep into various types of lending and other banking businesses.
After 3 great years with UniCredit Russia I was asked to join ING Moscow as the Deputy Head of Legal. At ING I continued with transactional work, but at a more sophisticated level and supporting more complex structures, working in multi-jurisdictional teams of lawyers, and cooperating with business people from ING locations all over the globe.
I spent another 3 fascinating years as a transactional lawyer at ING before the ING Head of Legal decided to make a new step in her career and moved to UniCredit Moscow as Head of Legal. I was promoted to Head of Legal at ING. That is how ING and Unicredit swapped lawyers. And this is basically how I stepped into my role, which I have held now for 5 years.
You’ve been working in the Banking sector for over 12 years now. Why did you pick the industry and what keeps you excited about it?
I.S.: Well, as I mentioned earlier, I got in the banking sector almost accidentally. I would say it is not that I picked the industry, but rather that the industry picked me. But I never regretted it. It was a lucky accident. Banking always involves something new. Dealing with clients you have to understand not only your own products, but also how your clients work as well, and this may involve any industry, from subsoil to aerospace. And it is only the business part. The regulatory/prudential part also brings a lot of challenges and excitement. Recently, many national regulators have realized that a reactive stance does not work anymore in the fast and always-changing contemporary finance world. Now we see plenty of regulations appearing: Dodd Frank, EMIR, Basels, FATCA, CRS – and these are only the global initiatives. On the local level, each week something new is developed.
Having had experience with both, what would you identify as the differences between working in-house with a local bank compared to an international one?
I.S.: The international environment, without a doubt, gives much more in terms of knowledge and experience sharing. It is more difficult for lawyers from local banks to get experience from other jurisdictions, to step beyond the traditional range of products, and to develop new skills, while in international banks lawyers enjoy not only constant knowledge sharing, but, straight away, the opportunity to see how that knowledge is applied in practice. An international environment also allows us to send our team members to other offices for short term assignments, which is a great learning and motivating tool.
What aspect of your job do you find to be the most challenging and how have you learned to cope with it?
I.S.: The most difficult for me is finding new team members. It does not matter how many interviews are held, it is extremely difficult to assess the personal and professional qualities of a person without working together for at least a couple of months. Honestly, I have not yet found any universal recipe, so I am dealing with this on a case-by-case basis. So far, this approach has been successful, but it still is the most challenging.
In what ways are current events in Russia affecting your business and your work as an in-house counsel?
I.S.: These days more and more extraterritorial laws come from different parts of the world. Sometimes they perfectly fit into the local legislation framework, but sometimes they do not. Where mandatory extraterritorial regulations contradict local legislation it creates a lot of unpredictability, which business certainly does not benefit from.
It would not be honest to stay silent on the geopolitical tension, which of course affects business, but we do hope that it will be settled soon.
Can you give us one example where extraterritorial regulations conflicted with local ones and, if possible, how you solved the contradiction?
I.S.: The most sound example would be FATCA. It started in 2010 with severe critics. Specialists, including politicians, argued that it conflicts with every possible law in Russia, that application of FATCA even prejudices Russia’s sovereignty. Disputes continued until the FATCA registration started – at which time, luckily enough, the legislators recognized that FATCA could be beneficial, and passed a law facilitating FATCA provisions in Russia. There are still a number of gaps where local law and FATCA are contradictory. We address these mismatches with FATCA, just as we do many other law conflict issues, in our contractual documentation with the clients. We try to be as detailed, specific, and predictable as possible, which is truly appreciated by the clients even thought the provisions which we have to insert are not always pleasant for them.
What budget saving solutions have you implemented that you felt were most effective?
I.S.: Well, we have a long history of implementing cost-cutting solutions over the last few years, so as we face this crisis, we are already “lean and mean.” Budget discipline has been my KPI for a number of years. We at ING constantly look after our cost side, and by now that has become a part of our culture. This does not mean that we live from hand to mouth – it just means that we are consistently responsible regarding our spends. So answering your question – cost discipline is the best budget saving solution.
Are there any other processes/tools that you can share with our readers in terms of promoting this “cost discipline” culture internally?
I.S.: I use a very simple tool: before I approve any spending I ask myself three sanity-check questions: whether I really need this buy; whether this is the best solution and have I considered all the available options for achieving the same result in the most efficient way; and am I obtaining the best value for my money? If the answer is “yes” to all, I authorize the spending.
This does not mean that we lack a proper framework, of course. We do have policies and procedures in place regarding cost controls – but here I mean going the extra mile. The discipline starts inside of us. People have to learn to be strict with themselves in the first place, and the best incentive for this is remembering that if you do not do your own sanity-checks, someone else will, do them for you, and then the classic cost containment measures will come.
What upcoming projects are you most excited about these days?
I.S.: You have probably heard about an initiative called Common Reporting Standards, which is a worldwide analog of FATCA. I have great hopes for this initiative. It will not be easy to implement for sure, but the most exciting part for me is not the legal technical one here – just imagine how this (basically a transparency tool) will change the world!
On the lighter side, what is your favorite spot in Moscow and why?
I.S.: It is difficult to pick one, maybe the viewpoint in front of the main building of Moscow State University. It is a great view of Moscow, with parks all around, and the beautiful architecture of the university building.
This Article was originally published in Issue 2.2. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.