Interview with: The ‘heavyweight’ businesses are welcome or 2020-2021 legal market trends
Oleksii Shevchuk, an attorney and the partner of the Barristers Law Firm, on what to expect in legal market in 2020-2021.
In summarizing the work of the legal market in the past year and assessing the prospects for its development in 2020-2021, there are two news to share – one is good and one is not very optimistic. Which one would you like to begin with?
The total income of the leading participants of the legal market, including the Barristers Law Firm (according to the annual legal practice study ‘50 Leading Law Firms of Ukraine’) shows that last year the market returned to the 2010 level, namely the growth was more than 20% compared to 2018, which is about 6.5 billion UAH, or $240 million.
There is, however, a bad side to Ukrainian lawyers. The mentioned amounts are applied only to the ‘heavyweight’ market players. With regard to medium and small entities, their profits became meagre, which forced many of them to merge and consolidate their work in pursuit of large cases and clients.
It is safe to say that the merger of law firms in 2019 became the main trend on the way to their prosperity in 2020-2021. Large mergers have taken place so far only in the capital market, nevertheless, lawyers predict also mergers of regional market participants, namely Odesa, Lviv, Dnipro and Kharkiv in 2020-2021.
Talking of dividing the total income of the leading law firms into specializations they worked in the past year, the most profitable areas for lawyers still remain dispute resolution practices, corporate and tax law – areas with an inevitable conflict of interest. In percentage terms, those practices make up half of all money earned by leading law firms in the past year. It follows then that in 2019-2020 Ukrainian lawyers earned each fourth UAH representing their client’s interests in courts.
Spring 2020 began with the fact that many lawyers had to adapt to imposed restrictions in connection with a quarantine in order to remain afloat. For example, working out issues related to running businesses remotely, the consideration of which was paused because of the pandemic. And the part of businesses was sent for consideration without presence of parties, it influenced legal fees of the lawyers. It prompted lawyers to use the Internet and different networks more. For example, using the format of webinars in which clients are advised in closed conferences about narrow-profile questions (it is an alternative to personal consultations) A lot of lawyers use mass-media and social networks for receiving the information about innovations in legislations, they practice creating their own channels in a social network Telegram, subscribing to that gives the possibility regularly to get information about questions which you are interested in.
Development of practices associated with inevitable pressure of law enforcement and fiscal authorities on Ukrainian business gives its stable profits. Last year, large legal companies earned more than UAH 300 million, though such companies had not previously taken up such criminal cases and used to outsource them to the classical bar. Searching for new markets, law firms actively tried to engage in nontraditional practices, not limited to representation only in criminal proceedings.
Boutique firms strong in their native specialties will also develop this year. Nevertheless, only boutiques with top-of-the-line practices, such as judicial, tax or criminal, will stand firm and be sure of ground. But even they will actively develop their associated practices, which will provide the closest possible work with clients and will minimize the transfer of their clients’ cases to outsourcing in the market. Particularly,litigation firms will strengthen their expertise in the agricultural, pharmaceutical, and banking sectors.
A redistribution of the lawyers’ concern to various sectors of the Ukrainian economy was quite an interesting trend of the past year.
For instance, despite the destroyed Donbas and the freezing of many projects in the east of the country, the legal business began to devote more attention to Western projects for alternative energy supply. Watching the changes in the economy, we see its mirror reflection. For example, the massive reduction of the banking sector in Ukraine gives rise to a huge number of credit disputes in courts, and the adoption of the Bankruptcy Code will add work to lawyers dealing with debts issues this year.
Consequently, it points to one optimistic conclusion for 2020-2021– there will be a lot of work for lawyers to do. Though, only the most qualified representatives of our profession will be able to get their hands on a worthy client portfolio.