Andrey Goltsblat, Managing Partner, - “Being an advocate is a way to exercise one’s professional skills” (selected points of the interview to the Corporate Lawyer magazine)

15.03.2018

As Managing Partner of the famous law firm in Russia, he takes a pragmatic approach to reform, is calm in the face of change, believes in the human intellect and is fully aware how hard it is to find a good specialist.

Andrey, the position of law firms in Russia has been subject to considerable public debate in the context of the Concept. Your opinion?

Here we find ourselves under geopolitical conditions determining the opportunities different lobby groups have for promoting their interests. My attitude to this? Well, I am for free competition. Strong competition is extremely important, as it pushes us to raise our professional level. As for the status of advocate, it was introduced once before. Bang! It is introduced. Bang! Everyone becomes an advocate. Then the Constitutional Court cancels it all and everyone stops being an advocate. In itself, the status of advocate is just a way to exercise one’s professional skills. There’s nothing extraordinary or wrong in this. Just like in healthcare and other professional services, not just anyone may be allowed to provide legal services.

On the other hand, an advocate entity must enjoy the same rights as all other business entities, because the world has changed. The Bar today is not like it was in Soviet times. Back then, advocates acted independently, as defendants, and could not engage in business or make a profit. This should be reflected in the Concept. The Bar must have the same economic rights as any joint-stock company, any limited liability company, allowing it to generate profits, distribute them between its members or partners and hire lawyers, including other advocates. In other words, an advocate entity must be a robust commercial entity in its own right. Then it would work and I would be all for it. If nothing changes in this respect, then what’s the point? What exactly does the reform mean? Everyone becoming an advocate? It would all be artificial anyway. Legal establishments would still try to do business and make a profit somehow or other, by hiring advocate entities. What’s the point? Why not regulate the situation? As for foreign companies operating on the market, as I’ve said before, competition is always a good thing. If the Concept is adopted as it is, well, we’ll just have to keep in step with this and continue working. We take a pragmatic approach to all reform.
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Don’t the multitude of spin-offs on the market raise a red flag with you?

It happens all the time. The Russian market evolves distinctively through hiving-off. Unlike foreign markets, which develop by merging and producing major international companies, on the Russian market, boutique firms of 7-12 lawyers proliferate. I believe this is driven by demand. Given the economic crisis, clients are not always ready to go to a big firm with a rigid pricing policy and versatile expertise, though I hope the situation will soon improve. A client chooses a firm depending on the particular issue it faces. For instance, one firm is in a better position to cope with a particular task, so let’s instruct that one and save money. Plus we can be sure our instruction will be prioritised. So the client chooses a small company that is able to close the issue. A long-term business relationship, such as we offer, might not be as attractive to clients these days as it was in times of economic boom. That said, looking at our business, we see that our comprehensive offering and capability to serve the assorted needs of big companies might be more convenient for this particular type of client. On this plane, I believe a bigger firm will be ultimately more successful, as our own steady growth since 2016 demonstrates. There was a slight dip in 2014 but, since then, it’s been nothing but grow, grow, grow. We have also seen clients coming back to us. It is undoubtedly more convenient for a really big international company to be served by one and the same law firm. And, of course, matters of corporate procedures, professional liability insurance and brand reputation are also of utmost importance.

Another reason I see for all the hiving-off on the national market is dissatisfaction with internal structuring and incentive systems. In other words, Russian partnerships are very often a pretence, so it is mainly entire teams that spin off from law firms. The uncertainty inherent in a partnership with two or three owners triggers a desire to set up a small but proprietary business. Many nominal partners participate in profit distribution but have no equity whatsoever. This encourages them to spin off and set up their own business in order to become both owner and partner. Five other partners around them might not have this proprietor feeling either but there is no possibility of splitting any further.

Have you also experienced a hiving-off?

We have restructured our Dispute Resolution Practice since a minor group of lawyers left fairly recently. Yes, also a hive-off. We were quite calm about it. On the sunny side, the move enabled us to reshuffle resources and shift the focus on to international arbitration and civil law rather than criminal law. This has brought in a number of exciting new mandates. So now we have an integrated Dispute Resolution Practice capable of addressing our clients’ instructions on a broader scale, while also focusing on more challenging cases. And we are seeing more and more such cases coming our way. In my opinion, cross-border litigations involving Russian parties or assets offer great promise. Disputes are often located outside Russia, so we are developing the cross-border litigation segment. Our Arbitration Practice is evolving in step with its counterparts in our offices in London, Singapore and Asia. We have hired several specialists from major international companies to handle this. Very good mandates are now coming in for serious international arbitration cases that bring us real money. Such cases are often more costly than standard litigations in Russia, open up more opportunities and, more importantly, involve exciting issues.

Another hot trend is automation.

Data explosion is a global trend, with every profession, including legal services, going digital. Yet it is basically impossible to create an algorithm or artificial intellect that can process the entire array of human relations. Only specific, narrowly focused areas will become automated. For instance, banks have standard loan agreements and will introduce a standard procedure for drafting a debt collection lawsuit. This can be done automatically, no humans being required to update the amounts involved. It is another matter whether we end up with courts examining cases electronically, without any parties actually participating. This is also questionable because that would interfere with the basic principles of justice. How would the adversarial principle be ensured? By robots and computer algorithms? Even so, emotions and brain impulses, all the electrical activity in our brain that affects our behaviour, cannot be reproduced – because all this emerges chaotically and segues from genetic processes and the overall evolution of mankind.

What areas would you recommend young lawyers to focus on?

Everyone should zoom in on what appeals to them most from the viewpoint of their internal energy, vibes and character. Some people are natural fighters and would be more at home in litigation and dispute resolution. Others would be inspired by intricate corporate law matters, where they can make good use of their analytical talents. People lacking aggressiveness are not likely to enjoy dispute resolution, because one needs to display one’s temperament, be persistent and stand up to stress. Court work requires a lot of energy: constant visits to court, efforts in courtroom, waiting for hearings to start. Emotional resilience is indispensable here. Dispute resolution is very stressful. So everyone needs to understand themselves and what suits them best. As for market demand, dispute resolution lawyers are more sought-after today. Yet those opting for this might also be disappointed if they are very busy but unable to cope with the emotional stress.

Is narrow specialisation important?

No doubt about it. Let’s take a closer look. Anyone seeking a service wants their contractor to be a real professional who knows their trade top to bottom. Otherwise you get just a general opinion, which you will need to take elsewhere to find your ultimate adviser. By then you might have lost a lot of time and exhausted your resources. Finding exactly the specialist you need is a global problem, not just in legal services. Of course, there are those huge directories. In the legal profession, this means the ratings. We all know that they apply some relatively unbiased method. On the other hand, there are interpersonal communications, which might be a disappointment despite top ratings, or fine specialisation might be lacking.

How to be comfortable in business?

Businesspeople are rather particular people – they manage and represent their own values. The primary objective in business is to make money. One can talk at length about business mission, corporate charity or some higher purpose, but they are really all in it for the money. Business integrity, keeping your promise, honesty, staying true to your word – these are vital. Plus punctuality. Punctuality is a kind of a toolkit for putting the above principles into life. Integrity is a comprehensive concept, involving keeping your promise, acting according to your conscience, making the right decisions, not letting other people down. Both in profession and in life, one needs to stay a good person. You need to be frank with both your partners and yourself. Also, you need an understanding of how your personal business works. You need to know where the money comes from. All this, including financial models, personnel management, market strategies, marketing and advertising, should come into being within yourself, should evolve in discussions with your colleagues and partners. Then you will succeed. What is business? One way or another, it is sale of something for consumption, be it services or goods. Because any service or product has its own consumer, or its own client and buyer. Nothing matters more in our business than knowing your client: who you should devote your time to and who you should focus on. To understand this is crucial and, if you don’t, all your efforts will be wasted. You should know your clients and the market for both your target buyers and your resources. This means you need to be on top of the talent market situation. People are the primary asset in our business and awareness of this market is equally important. To sum up: financial savvy, an understanding of what you are doing and the marketing message you convey to the market as a business entity.

Full version in Russian: http://www.gblplaw.ru/news/releases/107006/

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