Before we get to Russia, and the reason why western law firms should leave the country, a short anecdote.
In 1999 I went to southeast Asia to interview lawyers for a legal guide. For me this was great – I had family in Thailand and the Philippines, and family having preferred to meet in New York or San Francisco (where we also had family) for reunions, actually getting to Asia was fantastic.
One guy I met in Bangkok was a corporate lawyer – skeletal with age, quite unpleasant, and now firmly dead.
He had, though, the distinction of being the last M&A lawyer to be taken off the roof of the US Embassy in a helicopter when Saigon fell. I remember thinking back at my hotel – how much M&A was being done there as the Viet Cong closed in on the city?
The question is relevant as Russia squares up to its neighbours. I wonder about the deals that solicitors, law firms, and the Russian lawyers in international law firms are doing.
Are they too just thinking things will just blow over? If so, they should be reading the situation more accurately.
As authoritarianism in a jurisdiction increases, there is a period where there is no break in the bird song for the corporate world – where human rights are increasingly affected, but there are still deals to be done.
In disputes alone, lawyers doing such contracts are in this period doing nothing wrong. Not least, they feed back arbitrations and work to London’s Commercial Court.
But we have entered a phase when international law firms will have to ask who their clients are, and who they are linked to.
London is being highlighted as a place where dirty Russian money is laundered – and there are law firms linked to the deals that make it possible.
In the last few years, what did good solicitors, when presented with a property deal they did not like, do? They tell me they moved firm. Then a former colleague did the deal.
At which point those former colleagues are compromised.
What happens to ‘hot’ markets when corruption takes hold? Well, the society and economy that supports those deals disintegrates. The underlying logic of that market’s profitability evaporates. So, the politicians, rather than the market, pick winners – well, one winner. One winner per market.
At which point you have either no client, or a losing client – or a client who is winning for all the wrong reasons. Those reasons are political connections, for which read corruption. You have that one, corrupt, client. Or corrupt clients.
And when you have such clients, you have a problem in jurisdictions, typically much larger economies, that treat corruption seriously. The US for example.
So I’d say to firms who have lawyers in Russia – ask them if they want to get out. Do it now. If they are clever and principled, help them requalify. Hope this jurisdiction comes back.
There likely won’t be helicopters out of Moscow for our corporate and oil & gas lawyers.
But then, I’m not worried about the lawyers who quietly exit - I’m worried about the ones who stay, and what their connections, commitments and instructions do to the firms they work for.
So really, it’s time to get out of Moscow, and I hope lawyers who do can later return to help rebuild a state that, for now, has lost its way.
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