In October-November 2024, we interviewed Ukrainian general counsels to understand current trends in engaging local counsels and use of legaltech in their day-to-day activity. Interviews were held to demonstrate to in-house lawyers, international law firms, and investors the most effective tools for selecting local counsel.
List of respondents from Ukrainian big businesses, local subsidiaries of international corporations, or state enterprises:
- Tatiana Moroko, Eridon, ex Dyckerhoff, ex Bel
- Artem Filipyev, Kernel, ex ArcelorMittal
- Alexander Rudiak, Ukrainian Railways, ex Raiffeisen
- Denys Petrichenko, Mondelez, ex CHS
- Ilhar Hakhramanov, DCH
- Dmytro Symbiryov, Reface
- Anna Lazurenko, Nibulon, ex Louis Dreyfus,
- Vitaliy Belikov, Ukrposhta, ex DTEK, ex Nemiroff
- Andriy Bichuk, OLX
LocalCounsel: What is the most important criterion for selecting a counsel for you today? What other important criteria would you mention?
Moroko: Before the war, I communicated a lot with lawyers and companies on the necessary issues. Mostly it happened at legal forums and conferences. In my opinion, there is no one-size-fits-all law firm that can cover all necessary questions. One firm has a strong partner, the other has considerable experience with a large team. I also take into account the recommendations of my colleagues. We never refuse to communicate with law firms. The main thing is the integrity of the law firm and its experience in the relevant matter.
Filipyev: It's a difficult balance between the trust generated by experience and market recommendations. Then there are the qualifications and cost of services.
Rudiak: As for international firms, first of all, it is experience that must be confirmed by specific completed cases with similar transactions for state-owned enterprises. Then we look at their rankings, which is important to us, but the firm does not have to be a big name. For national issues, we hardly ever involve outside counsels, but if necessary, we also look at experience first and then at cost.
Petrichenko: Understanding of the subject and the extent to which people are knowledgeable about the business and understand the specifics of this business and the relevant question. We also take into account how large the external counsel’s team is.
Hakhramanov: Expertise in necessary subject, experience is the most important criterion. The second is the availability of people to do necessary work required. We do not take risks and do not hire small firms that may not have the capacity to do the work we need. And the next criterion is price.
Symbiryov: As for Ukrainian law firms - and there are very limited requests for them - it is a correlation between the type of work and the calibre of the firm. And, accordingly, the price-quality principle. As for foreign or international firms, it depends on the jurisdiction. In general, the cost of services is "cosmic", but there is no such client-care as in Ukraine. The principle of "don't ask, don't get" applies, because there is strong competition and everyone has a lot of work. In the US, we are currently trying to find a firm with pro-active client care. In Europe, the situation is more similar to Ukraine. For us, it is important that the partner is not in the "hall of fame" with a conditional rate of $2000. In the US, we are looking for a firm with a young partner who would work more by herself/himself, without much involvement of associates, because we do not want people to learn how to work on our cases.
Lazurenko: Price-quality ratio, but it is important that it is not too expensive. For international law firms, expertise comes first.
Belikov: Availability of expertise, then cost, and then experience in similar projects.
Bichuk: Expertise in the first place. Trust and reputation. I can't say price, but cost-efficiency and value for money. It is desirable to have an understanding of pricing and billing transparency.
LocalCounsel: Have you changed your process of engaging external law firms since the full-scale invasion began?
Moroko: No, I didn't. In 2023, I changed the company-employer. At Dyckerhoff, we engaged external counsels. At Eridon, we do not currently engage them, so my answers will be based on my previous experience.
Filipyev: No.
Rudiak: No, it hasn't changed. We continue to work through Prozorro [Ukrainian public bid platform] in accordance with the current legislation.
Petrichenko: Yes, the change was since the external law firm engaged by our company was the local Ukrainian office of an international law firm. The relevant local office changed, and it made no sense for us to continue working with them.
Hakhramanov: I started working for the company after the full-scale invasion began. As far as I know, the relevant process has not changed
Symbiryov: There have been no global changes.
Lazurenko: It's hard to say because I joined the company in 2023. I used the same approach as before. I send out a request for services via email and receive offers. I ask for a fee cap. After that, I confirm the offer with the CEO.
Belikov: There was a change as we had previously engaged a single law firm, many of whose lawyers had moved out of the country.
Bichuk: There were no general changes. During the hot phase until July 2022, there were certain issues, and the selection procedure was simplified to save time, but these were exceptional. After that, it was a standard process.
LocalCounsel: How do you search a counsel on questions and areas, in which you have no previous experience?
Moroko: I search in a way described in the answer above. If there has been a successful experience with law firm on a project but no expertise in another area, I ask to recommend another firm or partner that has the necessary expertise.
Filipyev: Advice from someone you trust. If it is a large project, you work with law firms that provide comprehensive services. If such a firm does not have the expertise on necessary subject, then we look for recommendations from the market, i.e. colleagues in-house lawyers, lawyers from external law firms, and businesses. For example, when we had a specific dispute in the Netherlands, asked our local colleagues from law firm with whom we cooperate, and they provided us with contacts of a Dutch firm with which they had positive experience.
Rudiak: We look for them on our own via Prozorro and use rankings.
Petrichenko: Recommendations from other Heads of Legal Departments and external counsels. We can ask them and get advice from their personal experience.
Hakhramanov: We conduct research on the required practice and industry, see what firms are engaged in this area, and select a short list of candidates. After that, we look at closed projects. We also look at how active the partner in charge of the practice is. For example, whether she/he writes articles on the relevant topic. After that, we send out 3-4 requests for proposals and choose from the suitable candidates.
Symbiryov: We conduct an independent research of the required subject. If it is a dispute, what kind of dispute matters. In the US, for example, there are many artificial disputes. We study potential statements of defence and relevant precedents. If we take the US as an example again, we look at whether the firm or a partner writes articles on relevant topics. If they do, they are most likely engaged in real practice on this subject.
Lazurenko: I ask our legal community. I also use rankings and Google. I gather information about the relevant practice and comments from the market, and this is how I navigate. If I need a specific local firm, for example, in Mykolaiv, then I look at rankings and comments from Google.
Belikov: The procurement law sets out the relevant procedure. We can engage counsel for services up to a million hryvnias without a tender. We base our decision on our personal understanding of the market or look at the Top 50 from Legal Practice [Ukrainian legal media] for the previous year. We can negotiate with the candidate.
Bichuk: I seek advice and guidance from my colleagues at legal market. Informal communication in networking events.
LocalCounsel: Do you use international or Ukrainian rankings on law firms? If so, which ones?
Moroko: Yes, I look at the rankings with interest and check my own information. Mostly The Legal 500. When you work in an international company and choose a law firm from, for example, the Top 3, you can tell your colleagues that we have chosen from the best candidates. When you need to justify your choice, rankings add value to the choice.
Filipyev: I know about them, but I don't use them. The last time I reviewed them, I didn't learn anything new.
Rudiak: Yes, we use The Legal 500 and Chambers and Partners.
Petrichenko: No, I don't.
Hakhramanov: Yes, primarily international ones. The Legal 500 and Chambers and Partners. IFLR is not so relevant.
Symbiryov: We use Chambers and Partners and The Legal 500, but not only those. We also use Lawyers' rankings, such as 40 under 40. In general, I know all leading Ukrainian firms. We have had experience of using Portuguese and Lithuanian rankings (similar to Ukrainian ones, by the way). In Portugal, for example, we used ratings and reviews for selecting local counsel, but were dissatisfied with the work of the chosen firm.
Lazurenko: Yes, Legal Practice, Ukrainian Law Firms and The Legal 500.
Belikov: Yes, the Top-50 from Legal Practice.
Bichuk: This is not the decisive factor and the last argument. We review The Legal 500 and Chambers and Partners.
LocalCounsel: Do you hold internal "tenders/bids" for each time you need to engage an external law firm? If so, how is this process organised?
Moroko: I had experience of holding tenders/bids. It is very difficult exercise. You need to understand what practices the law firm must have to cover the project in full. You also need to agree on the possibility of project-based payments. Certain difficulties arise with agreeing on hourly rates or cap fees. All of this also needs to be justified to colleagues in parallel. It is difficult to justify a certain choice to the top management because it is difficult to evaluate different candidates. The presence of successful cases is also important when conducting a tender/bid, but I don't really trust this criterion, as there may be unsuccessful cases too. We really appreciate when a law firm agrees to discuss the terms of cooperation and the cost necessary for us. I also had an interesting and useful experience of a legal breakfast, during which a firm or a separate practice shares its experience - it really helps to assess the level of lawyers. If the lawyers know better and more than me, I will be interested, but if not, I will not cooperate with such a firm. It is also very difficult to digitise a tender, as it is difficult to assess the full range, since approaches and prices are very different. And the prices are not everything. I started working with counsels based more on feelings and intuition. Reputation and similar cases were important. Most often, I was persuaded to start cooperation at legal forums and conferences. Especially when partners or lawyers discussed non-standardized ideas, when they were creative and informal. Human attitude is also very important when making a choice.
Filipyev: We rarely work through tenders/bids, only for standardised services without delicate elements, such as a typical SHA, and send several requests by email. We do most of the work ourselves. I estimate that we cover 80% of the legal work on our own, engage external counsels for 20%, and hold tenders for about 5% of the overall legal work.
Rudiak: Not whenever necessary, as we cover 99% of the legal work ourselves. Only complex projects with foreign elements, such as a Eurobond placement or English law issues, require the involvement of an external counsel.
Petrichenko: For example, if the issue is above a certain budget, we hold tenders/bids from a circle of law firms, 5-7 candidates. We prepare the terms task, send a request by email, and evaluate the experience and financial proposal.
Hakhramanov: If it is a small project, we do not hold a tender. If it is a large project, for example, for financing or bonds, we always hold a tender/bid. We send RFPs (requests for proposals) via email.
Symbiryov: Yes, I choose 3-4 law firms. I look at response time, price and who will work on the project. At the same time, not every project necessarily requires involvement of a partner in certain jurisdictions. Sometimes in foreign countries, such as the US, they don't respond to cold emails at all, they prefer intro calls.
Lazurenko: At this stage we rarely engage outside law firms. But when we need to, we hold a tender/bid. You can always take three law firms and compare their offers. I talked about the process in the first question.
Belikov: We meet at the law firm's office. If we already have experience, we invite them to our office. If everything suits, we formalise the terms of cooperation.
Bichuk: Not for every project. There is a Corporate Policy that sets a limit for the mandatory tender/bid. If the estimated cost of services does not exceed this limit, I have more freedom in selecting an external counsel. I conduct the relevant tender, when it is necessary, via email.
LocalCounsel: Are you always confident that you are choosing the best available offer on the market? In terms of the financial offer and the relevant experience of the counsel.
Moroko: No, I'm not sure. Sometimes the external counsel is chosen by the headquarters. If there is trust and harmony at that level, then you just work with the chosen candidate. Also, often when the firm is already working on a specific practice, this place is already taken. A lot of things happen on a personal level. I need to have professional trust and the right to choose even intuitively. Yes, it is difficult to explain, but if there is a lot of cooperation ahead and there is no understanding at the beginning, it will be very difficult for everyone. Synergy is only possible when both parties want it. If things don't work out with a particular law firm, we move on to a new one.
Filipyev: I don't always choose the best. But there is a nuance. It's like a doctor you're used to and trust. Since we are a large and specific centralised company, the potential greater experience or better expertise of an external counsel is offset by the need to fully integrate such new firm into our system.
Rudiak: As a state-owned enterprise, we act in accordance with the provisions of the law on public procurement and cannot go beyond it. Therefore, yes.
Petrichenko: We hope so, but we are not sure. We have had negative experiences. There was even a case when we changed the counsel halfway through the project, and we were ultimately satisfied.
Hakhramanov: There is always no such certainty, as there are differences in the proposals. It is difficult to compare offers since the prices are in different formats, the scope of work and assumptions are also different. This is why an in-house lawyer should prepare a high-quality RFP. But in general, it is difficult to assess which proposal will be the best, as everyone has their own formats, while different aspects of different proposals are good in their own way.
Symbiryov: From my experience, I'm sure it is.
Lazurenko: Only if I select among those I trust. If I have +/- equal offers, I can bargain. It's good for the company.
Belikov: Not always. Our cases are specific. So far, we have not made any mistakes, but there are concerns about non-standard requests and questions.
Bichuk: I would like to think that it is not the worst. The doubters are obvious. The market is competitive and developed. From time to time, the question arises whether the choice was right. However, to be honest, there is usually a feeling that the choice is right.
LocalCounsel: Auxiliary tools and technologies to simplify your legal work. Do you have any? What else would you like to see implemented?
Moroko: Yes, ChatGPT for more technical work that a paralegal can do, or to write a creative email. I also use traditional tools like Liga and Verdictum. We also use Trello to organise teamwork and store documents. I would also like to have a high-quality CRM for working with large amounts of information.
Filipyev: The hygienic minimum, such as Liga and similar classic tools. We try to centralise the management and sending of legal documents using an electronic signature, to send documents directly to an electronic court. We monitor the legal-tech market, but we do not yet see what we can actually use.
Rudiak: Liga and registers of court decisions. We also have our own software for working with registers. We also have a branch, the Main Information and Computing Centre of JSC Ukrainian Railways, which develops and implements the necessary electronic document management solutions based on the Megapolis system for our own needs.
Petrichenko: There is an automated system for paying legal bills. But it often worsens the process due to the local specifics of bill payments in Ukraine. Sometimes there is a lack of fast communication and connection on urgent issues. Such communications with external counsel sometimes take a week.
Hakhramanov: Currently, no. In general, there is a demand to reduce the amount of time spent working with external law firms. It would also be nice to have tools to automate certain processes. This is not an urgent need, not a must have, but rather a nice to have.
Symbiryov: Yes. As to AI, I think it is not of high quality and I doubt that anyone in Ukraine really uses it. We also had a contract management system, but it was bad. We have an assistant tool for our legal team, where we build a workflow for contracts. We use DocuSign and Vchasno electronic signature services. AxDraft was not relevant for us from the beginning. As for Ukrainian issues, due to the specifics of the jurisdiction, we currently handle most of the legal work ourselves.
Lazurenko: I have been using Liga for many years. I also use the Debit-Credit/Golovbukh tools. We are also trying to launch automatic contact generation on our own, similar to AxDraft, but more specific.
Belikov: Prior to the pandemic, we implemented an ERP system (enterprise resource planning) for the administration of internal and court documents. The implemented e-court system is very convenient, as it allows us to submit documents via QES (qualified electronics signature) from anywhere in the world. We use Liga 360. We are trying to create our own service for issuing QES. We would also like to implement an AI tool for standard processes that could be integrated into our ERP, but we have concerns and need to be very careful with AI tools.
Bichuk: Yes, we use document automation through AxDraft. We also have our own AI tool within the group for daily support work. We use Giro system for clients. For internal communication, we use Notion. As for imaginary tools that I would like to have, this is a single working environment in which we would all work. I would like to have email + CRM + automated documents. In other words, combination of contract management and CRM into a single legal workspace.
By Igor Pomaz, CEO, LocalCounsel
Originally published by CEE In-House Matters.
