Adapting to New Realities

Research 2023-2024

Welcome to the twenty-first edition of Ukrainian Law Firms. A Handbook for Foreign Clients – the legal market research encompassing two years during russia’s full-scale invasion. The research focused on the years 2022-2023, investigating new and emerging areas of law that have become particularly relevant due to the war, such as military law, defense sector issues, war crimes, and the legal aspects of mobilization and economic recovery efforts.

This research took into consideration the non-participation of some noticeable firms, opting not to include those that did not submit information in the Market Landscape – Rankings tables.

The analytical framework will adapt to the altered market conditions by listing leading firms and individuals alphabetically, moving away from traditional hierarchical rankings to ensure fairness and accuracy given the uneven impact of the conflict on various legal entities, and preventing distortion of the landscape due to the absence of powerful players in a range of practices. This revision reflects the war-induced upheaval, as many lawyers have either joined the front lines or relocated, severely limiting their participation in conventional market activities.

Given the significant disruptions caused by ongoing military conflicts and economic shifts, the research has deepened its investigative approach. This includes extensive in-depth interviews and analyses to better understand significant transformations seen across the sector during this unprecedented period. Firms and individuals who did not submit information but were consistently recognized for their expertise and market presence in in-depth interviews have also been mentioned. This approach ensures a comprehensive overview of the market’s various segments, attempting to describe all notable players.

Ranking inclusion is determined by evaluating a mix of factors: the range and impact of the project portfolio from 2022 to 2023, the complexity and importance of the issues handled, client profiles, the versatility of the practice, the team’s expertise, capacity and reputation, and sustainable development throughout and beyond the research period.

The category “Other Established Practices” includes firms that have demonstrated sustained expertise, as evidenced by their consistent performance during the research period and the proven capabilities of their legal teams.

The category for personalities — “Authorities” — reflects individual achievements, referred to undisputable market professionals named as people establishing standards, less involved in each project at present, but playing a key role in client relationships, reputation and the market staying power of their firms or practices.

In response to market feedback in certain practice areas, we have in the current publication introduced the category of “Celebrated Practitioners”, which spotlights practicing long-timers, and showcasing their many years of experience on the legal market.

We continued to collect and systemize publishable deals, using both submissions and public sources. Please, check Tables 1-3.

Details about promotions, transfers, and departures are included in each survey throughout the Who is Who surveys.

The research team, based in Kyiv, has experienced firsthand the operational and emotional challenges posed by the war, including constant air raid alerts and power outages. This intimate understanding of the local conditions has enriched their ability to provide a more nuanced analysis of the market.

From Shell Shock to Strategic Rebound

The Ukrainian legal market from 2022 to 2024 experienced significant transformations, adapting to the challenges of war, economic disruptions, and rapid shifts in the legal demands of all – corporations, individuals, and the state.

During the initial phase of the war, the legal market experienced “shell shock,” leading to a temporary pause in activities and an exodus of legal professionals, either joining the Armed Forces or relocating abroad. This caused a noticeable gap in the market, particularly in specialized legal fields. However, since summer 2022 the market has shown signs of partial adaptation to new realities by shifting focus and leveraging remote work technologies intensified by the pandemic. Many law firms shifted to remote hearings and digital client management practices out of necessity, which may have long-term implications for the traditional law firm business model. However, the physical presence in offices and face-to-face meetings continued to hold perceived value for more effective collaboration and client relationships. Market sources note that clients’ requirement for having the legal capacities on the ground in Ukraine is often decisive in the choice made of legal counsel.

2023 saw the beginning of a cautious economic recovery, reflected in partially renewed demand for legal services as the national economy stabilized. This recovery was uneven, with larger, well-capitalized firms regaining ground faster than smaller practices. The departure of many legal professionals resulted in a scarcity of experienced legal personnel. Law firms faced challenges in recruitment and retention. Over time, as the market conditions stabilized somewhat, firms began rehiring and even expanding their workforce, though the focus shifted towards more versatile legal professionals capable of handling multiple tasks across different legal domains. Additionally, the importance of soft skills has been emphasized more than ever, reflecting a shift in what firms value in their potential hires. Some professionals came back from their secondments ar international law firms and rejoined previous employers, others decided to continue their careers abroad. At the same time, the legal departments, especially from the IT sector, and international organizations expanding their mandate in Ukraine, are successfully competing for senior and mid-level professionals. Amidst this “battle” for highly-skilled lawyers, we observe the renewal of internship programs for students as an alternative source of attracting talented junior staff.

Law firms increasingly focused on maintaining client relationships and adapting to new market realities through strategic hiring, compensation adjustments, and enhanced focus on business development under constrained budgets. Marketing strategies were recalibrated towards digital and value-driven approaches, reflecting broader shifts in client expectations and the legal services delivery model. The demand for fixed-fee arrangements became more prevalent as clients sought predictability in their legal expenditures.

The war brought not only operational and economic challenges but also ethical and reputational ones, particularly concerning their positions and dealings related to Russian interests. The scrutiny over whom firms represented and their stances on national integrity and ethical practices became more pronounced, affecting client relationships and public perceptions.

The legal community in Ukraine has shown remarkable solidarity and commitment to pro bono work, particularly in providing legal assistance to those affected by the war. This has not only helped numerous individuals and businesses during difficult times but has also elevated the social responsibility profile of the legal profession in Ukraine.

The Legal Fallout of War

The legal sector’s health is inextricably linked to the overall state of the economy, which suffered considerable blows due to the war. Key industries like metals, mining, banking, finance, and energy faced severe challenges. The destruction of large steel plants and the occupation of strategic regions significantly impacted these sectors, directly affecting the legal advisors that serviced them. Conversely, industries less dependent on physical infrastructure, like software development, maintained stability, benefiting from their orientation towards global markets.

The war catalyzed the emergence of new legal practices in Ukraine. First, military law and war crimes became significant, reflecting the acute need for legal expertise in both armed and non-armed defense procurement. Lawyers specializing in these areas found themselves at the forefront, dealing with issues ranging from contract negotiations for defense supplies to legal ramifications of war actions. Second, the implementation of government mobilization policies created a demand for legal services related to military registration and reservation. Law firms responded by developing specialized units dedicated to supporting individuals and entities navigating the complexities of mobilization orders. Third, there was substantial growth in that part of the legal practice focused on the fixation and compensation of war damages. This service involves assessing and documenting damages to support future compensation claims and navigating the complex legal pathways required to secure future compensation from both national and international bodies.

Additionally, the surge in humanitarian crises has spurred the formation of numerous charitable organizations, necessitating legal expertise in non-profit regulations and compliance. Moreover, the complex nature of humanitarian law has become more prominent, as legal professionals address issues related to human rights and aid distribution under the conditions present in the ongoing conflict.

As Ukraine prepares for eventual reconstruction, there has been growing demand for legal expertise in infrastructure projects. Legal professionals have been increasingly involved in advising on public-private partnerships, compliance with international construction standards, and financing agreements. This trend is expected to accelerate as the country moves towards rebuilding its damaged infrastructure, making legal services in this area crucial for the effective implementation of reconstruction projects. International aid and grants also brought new dimensions to the legal market, reflecting the integration of global support mechanisms into local legal practices.

The economic fallout from the war necessitated a growing emphasis on debt restructuring services. Ukrainian and international financial institutions sought legal expertise to handle the complexities of restructuring corporate and sovereign debt. Law firms demonstrates busy teams, offering services for renegotiating terms and conditions of financial obligations amidst financial instability.

In 2023, the M&A sector saw a substantial increase in transactions, especially in the IT sector, compared to 2022. The resilience of the IT and technology sectors has attracted both domestic and foreign investors, with significant private equity and venture capital activities. Notably, the military tech sector also saw growth, funded by both state-supported and private investments. In the past year Ukrainian companies increasingly pursued outbound M&A activities, reflecting a strategic shift to diversify and expand their businesses internationally. This trend was facilitated by the accumulation of capital due to wartime currency control restrictions, enabling domestic firms to invest in foreign markets and facilities.

Despite the broader economic downturn, the IT sector in Ukraine remained relatively stable thanks to its independence from physical infrastructure and strong ties to global markets. Legal practices serving this sector not only maintained their pre-war positions but, in some cases, even expanded, particularly in areas related to fintech and data protection. This requires sophisticated legal support in navigating international laws and regulations, intellectual property rights, and cross-border transactional structures. Legal professionals in this field adapted to new regulations and compliance requirements that emerged from increased online and digital service offerings.

Agribusiness, though impacted by Russia’s blockade of Black Sea ports, has adapted by finding alternative routes and methods for export. The significant logistical challenges required robust legal support in areas such as international trade law, contract negotiations, commodities arbitrations, and broad range of contractual disputes.

With the lifting of the moratorium on tax inspections, a significant increase in tax litigation is anticipated. The challenges of wartime and weakened state control mechanisms have led to a decrease in taxpayer discipline, prompting a need for robust legal support in tax disputes. Moreover, there is an encompassing facilitation of tax authorities’ activities. Furthermore, the economic strains brought by the war have heightened the risks of white-collar crime, leading to a corresponding increase in demand for legal expertise in business protection and compliance.

As Ukraine progresses with its EU accession, the activities of anti-corruption agencies like the National Anti-Corruption Bureau of Ukraine and The Specialized Anti-Corruption Prosecutor’s Office have intensified. Criminal defense practices now report that anti-corruption cases constitute 50-60% of their recent caseload, with expectations for further rises.

The Ukrainian legal market has seen a substantial increase in demand for sanctions advice. This surge is driven by the necessity for Ukrainian companies to navigate both international sanctions imposed against Russia and Ukraine’s own sanctions against the aggressor-state. As domestic restrictions are sometimes imposed without adequate verification, impacting Ukrainian and foreign businesses that do not endorse Russia’s aggressive policies, there is an emerging legal practice focused on challenging these sanctions. This involves appealing against the imposition of sanctions through judicial proceedings and administrative procedures.

Looking beyond domestic challenges, Ukrainian law firms also find themselves increasingly involved in international legal disputes and arbitrations. This includes representing the Ukrainian state and businesses in cases against Russian entities, a practice area that has gained prominence and is expected to remain critical in the foreseeable future. The expertise developed during these intense legal battles is shaping a new generation of Ukrainian lawyers skilled in international law and cross-border disputes.

The period from 2022 to 2024 has been transformative for the Ukrainian legal market, particularly in terms of practice areas development and industry alignment. The war has catalyzed new legal disciplines and demanded rapid adaptation from the law firms. As the country moves towards recovery and reconstruction, these specialized practices are expected to play pivotal roles, not only in addressing immediate legal challenges but also in shaping the broader trajectory of Ukraine’s legal and economic landscape in the post-war era. This ongoing evolution stands as a testament to the resilience and adaptability of Ukraine’s legal professionals.

Charting the Future

Looking ahead, the prospects for Ukraine’s legal market are intricately tied to the broader geopolitical and economic outcomes of the ongoing conflict. Assuming an optimistic scenario where the war concludes in the near future, there is potential for robust growth in practices like anti-corruption, corporate and M&A, and international arbitration. Such growth would likely be supported by a deepened commitment to Ukraine’s European integration and an influx of Western investment.

The legal market is also poised to play a crucial role during the recovery and reconstruction period, with heightened demand expected in areas like infrastructure, energy, agriculture, pharmaceuticals, and IT.  Effective judicial reform and enhanced rule of law are anticipated to be central to attracting and securing foreign investment, which will be critical in rebuilding the Ukrainian economy.

A significant area of focus for the legal community involves advocating for justice for Ukraine as the victim of unprovoked aggression. As the international reparations mechanism continues to develop, there is a clear anticipation that expertise in international law will soon be highly sought after. This demand highlights the increasing need for legal professionals who can navigate and contribute to the establishment of these reparations on the global stage.