More than 10,000 civilians have been killed in Ukraine since Russia first invaded in February 2022 according to the UN. And, as highlighted by this week’s airstrike on Kyiv, in which more than 40 people lost their lives, the war is far from over.
But despite the ongoing conflict, law firms in the country remain very much open to business.
Here, Legal Business speaks to some of those on the ground in Ukraine about the different stages of the conflict and the mood among the business and legal community.
February 2022 – June 2022: Invasion
In the initial weeks and months after Russia’s invasion on 24 February 2022, law firms, like the rest of the country, went into survival mode. The first priority was ensuring the safety of staff. Although most men of professional age were unable to leave the country, female lawyers were largely free to leave.
International firms moved their eligible staff to overseas offices, with CMS, for example, offering all of its employees on the ground the chance to move to its Budapest office. Domestic outfits either shifted as far as possible into Western Ukraine, or managed to operate entirely remotely with staff scattered throughout Europe and beyond. Independent firm Arzinger continued to practice despite resettling approximately 40 people across 22 different jurisdictions. The alternative was to lose staff.
For those headquartered in Kyiv, the situation was less dire than for those in the eastern regions, such as Kharkiv, where Aurum Law Firm evacuated its entire team, and co-founder Sergey Ostrovskiy recalls that ‘a few of our associates were caught in the area when Russia invaded, and one had to sit for eight days in the basement without leaving’.
Yet by early summer 2022, carrying on with legal business in a combat zone was becoming the new normal.
Anna Babych, executive partner at AEQUO, says that many people were back on the ground in the office from June, ‘since the goal was to keep the team together as much as possible’. She adds: ‘We tried to get back to normal and were celebrating certain things together.’
Timur Bondaryev, Arzinger managing partner, describes how even though things were put on hold at first, over time ‘people got accustomed to it’. He adds: ‘Business became more or less as usual – not considering regular missile attacks of course. As long as we’re alive we adapt.’
‘Business became more or less as usual – not considering regular missile attacks of course. As long as we’re alive we adapt.’ Timur Bondaryev, Arzinger
The first practice to bounce back was dispute resolution. Force majeure and bankruptcy claims quickly piled up, giving full-service firms the chance to rapidly pick up a healthy caseload. The courts, already primed to operate remotely, sprung into fully-digitalised action. Sanctions work was also booming. Bondaryev recalls: ‘Since Russian investors have traditionally been a huge presence on the market in every area, it was painful for each and every client.’ It meant firms were kept extremely busy, with related white-collar crime investigations relating to potential involvement with Russian money also picking up.
July 2022 – May 2023: Counteroffensive and hope
Through late summer and into autumn, Ukrainian forces liberated territory in the northeast and east of the country and, with the promise of a similar programme to follow in 2023, some opportunistic investors began to look again at Ukraine.
Tetyana Dovgan, an M&A partner at CMS in Kyiv, recalls seeing ‘the promise of deals in the infrastructure, logistics and telecoms sectors’. One such example was Nestle’s announcement in December 2022 that it was planning to invest just over $42m in a new production facility in Smolyhiv, in the western region of Volyn.
‘[Most in the industry felt that that lawyers had] a patriotic duty to work and pay taxes – this is the way for us to support the war effort.’
Olga Shenk, CMS
Throughout the winter and into spring 2023, a hopeful mood abounded. International financial institutions, tapping into the zeitgeist, resumed lending, as well as developing concurrent political risk insurance programmes. Some firms also saw their domestic clients taking the opportunity to widen their focus beyond the border.
Away from the transactional space, litigation continued to be a key driver of activity. Compensation for losses and damages caused by the conflict emerged as a core concern. Where previously there had been a lack of tangible opportunities for such claims, there was increasing optimism. In May 2023, the Register of Damage for Ukraine was established under the auspices of the Council of Europe, with Yulia Kyrpa, another of AEQUO’s executive partners, one of the current board members.
Firms were also picking up commercial and employment work, particularly in relation to military personnel.
Throughout this period, firms also continued to establish and adjust to the working patterns associated with their new reality. The barely forgotten realities of the pandemic proved useful, with Bondaryev noting that ‘Covid turned out to be a huge help, as everyone was trained to work remotely, including the public authorities’. Those who had previously been based in the eastern parts of the country, such as Aurum Law Firm, had no choice but to remain long-distance. But those in the western part of the country were seeing many lawyers opting to spend at least part of their time on the ground.
June 2023 – December 2023: Delay and disappointment
But by the end of autumn 2023, as it became clear that the counteroffensive was not progressing as had initially been hoped, even bolder investors started putting projects on the back burner once more. Bondaryev estimates that during this time, ‘maybe 10% of investors went ahead with projects, and only near the Western border’. As a result, firms experienced a slowdown in the transactional space.
With the situation on the ground becoming increasingly dire, many firms used the pause in deal-making to focus on the pro bono work many had been carrying out since 2022. CMS, for example, has been supporting the ‘Superhumans’ initiative, which sees practitioners assisting humanitarian and rehabilitation centres with their structuring and insurance matters. AEQUO, meanwhile, dedicated its efforts to providing prosthetics centres for veterans with free advice, as well as handling a spate of defence mandates for free on behalf of the Ministry of Defence.
Aurum Law Firm teamed up with a number of clients to create a fund that could be distributed directly to volunteers in the eastern areas of Ukraine, providing certainty that ‘every penny would reach its destination’. As Babych explains, legal professionals were eager to find their own ways of alleviating the suffering they were seeing, and ‘this was their contribution’.
During these darker days, firms continued to mine all possible sources of work. For some, like Ostrovskiy’s boutique, this meant leveraging their smaller and more flexible nature and ‘diversifying to conduct business not only in Ukraine but globally’. Larger, full-service firms, meanwhile, took on insolvency and supply chain related mandates.
Overall, as Olga Shenk, head of dispute resolution and compliance at CMS in Kyiv, explains, most in the industry felt that that lawyers had ‘a patriotic duty to work and pay taxes – this is the way for us to support the war effort’. Integrites’ managing partner Oleksiy Feliv, similarly, affirms that ‘law firms do make their contribution to Ukraine’s victory, and have been doing their job despite the ongoing war’.
‘Everyone hopes that the next year will be the one where there will be a ceasefire or a resolution.’
Anna Babych, AEQUO
January 2024 – June 2024: Pragmatism
With the war now into its second year, since 2024 the mood has shifted again. Bondaryev characterises it as: ’the realisation that this is a sprint and not a marathon’.
Firms have been operating in a war zone for nearly two and a half years, transitioning through various operational models to land on systems that work.
For those previously based in eastern Ukraine, such as Aurum Law Firm, partners and lawyers remain scattered around the world, with none currently working in Ukraine.
But firms in western parts of Ukraine have seen lawyers flooding back to the country and their offices.
At Integrites, only one partner out of 15 is now living abroad full-time, with the rest based either solely or partially in Ukraine.
‘Law firms do make their contribution to Ukraine’s victory, and have been doing their job despite the ongoing war.’
Oleksiy Feliv, Integrites
For the firm, this is ‘a conscious decision in order to try and be in Kyiv close to clients’.
The figures are similar for Arzinger, where only four of the senior practitioners are now working completely remotely.
Those who relocated their families abroad are now splitting their time between cities; Feliv alternates between spending one month at the office, and one with his wife and children. He jokes that ‘it’s great; as soon as you get everything sorted in one place you have to leave and can’t enjoy it, and then you move and there are 1,000 problems there which you sort out, then you have to leave again’. This picture is a common one for lawyers across the country.
But despite the difficulties, firms, like corporates and investors, have settled down for the long haul.
The major international players with a presence in Ukraine before the war are cautiously resuming operations, and hoping to seek opportunities in the rebuilding projects that are needed on a huge scale. As Babych explains: ‘Everyone hopes that the next year will be the one where there will be a ceasefire or a resolution.’
Ukrainian firms are keen to stress that life – and business – is still going on – despite an increase in the violence.
‘We are continuing to stay on the ground in Kyiv, working, supporting our teams, and bringing the victory closer.’
Tetyana Dovgan, CMS
As Feliv explains: ‘there’s often an ‘aha’ effect when we explain to people abroad that we are still working, because perhaps people think we sit back home in our cellars, hiding from missiles and doing nothing, but we understand that we must keep the economy going’.
Dovgan concludes: ‘We are continuing to stay on the ground in Kyiv, working, supporting our teams, and bringing the victory closer.’
If you would like to make a donation to aid efforts in Ukraine please go to british-ukrainianaid.org/