After several top 25 global firms cut backs their Moscow offerings last year, there have been signs of renewed interest in Moscow as Kennedys set up a Russian base last month through an exclusive arrangement with local firm and former Clyde & Co best friend CIS Advocates, while Chadbourne & Parke invested in a new managing partner.
Kennedys’ launch comes with the hire of former Clyde & Co Russian insurance practice head Constantin Saranchouk, along with an associate, and follows troubled markets in Russia across 2014 that saw a raft of firms scale back in the region due to international sanctions.
The move shows the rise in demand for insurance-related advice in Russia from some of Kennedys’ largest insurance clients, especially within the oil and gas sector, including American International Group, QBE Insurance Group and XL Group. ‘The sanctions are not an issue for us as our clients are predominantly non-Russian insurers,’ said Kennedys senior partner Nick Thomas. ‘I can understand why people would say it’s a difficult time to enter the market, but our clients have requested we have a presence in the region and the sanctions largely affect Russian oligarchs rather than insurers.’
The new office is the firm’s first in Moscow and will have an initial focus on high-value insurance disputes covering international power and energy, construction, aerospace and financial markets. Plans are to develop the offering to cover a wider client base that includes international insurance groups, London market insurers and Russian insurance companies. The office currently houses Saranchouk – who will head the new Kennedys CIS Advocates – alongside two associates and will work with an equal-sized team of Russia-focused lawyers in London.
‘I can understand why people would say it’s a difficult time to enter the market, but the sanctions largely affect Russian oligarchs rather than insurers.’
Nick Thomas, Kennedys
Meanwhile, Chadbourne also recently boosted its presence in Russia with the hire of Berwin Leighton Paisner energy partner Andrei Baev as Moscow managing partner. This comes after Chadbourne closed down its Kiev operations last summer.
However, many firms have scaled back, particularly in capital markets. One Moscow-based partner at a Magic Circle firm told Legal Business: ‘Lawyers have had to adjust and move away from the internationally-focused capital markets, and towards the more domestic finance and litigation work.’
The targeted sanctions related to the Ukraine crisis and the broader-based sanctions aimed at the Russian financial and energy sectors specifically, have left a crippling after-effect on corporate activity, leading to a halt in capital markets work. This has taken its toll on some of the international firms located in the country, including Allen & Overy, Clifford Chance, Linklaters, Freshfields Bruckhaus Deringer, White & Case and Cleary Gottlieb Steen & Hamilton, with some relocating partners to other offices and in some cases making associates redundant.
jaishree.kalia@legalease.co.uk