History of the Ukrainian Legal service market is a new project of the UBA Students League. As the most powerful student law society in Ukraine, we feel it necessary to research this industry, which is why we have launched a series of interviews with the pioneers of the domestic legal services market. Our first guest is Vasil Kisil, a legend within the Ukrainian legal services community, professor, founder, and now a senior partner of Vasil Kisil & Partners. We will talk about how one of the leading law firms in Ukraine has emerged from the university law club, about the stages of development of the domestic legal industry, about current trends and forecasts for the future.”
Vadym Humeniuk, resigned Chairman of the UBA Students League
– Vadym Humeniuk: We have all heard a lot and know a lot about your experience and your achievements, but we would like to hear about all these firsthand. Please tell us about yourself and how you started your career in jurisprudence in the 1990s and how you established your firm.
– Vasil Kisil: Speaking briefly about myself, of course, I was born one day, later graduated from school, then went to serve in the army. I had entered the University’s Faculty of International Relations and International Law in 1972 (when it was recovering in the post-war period) and then worked as a lecturer at the Faculty all the time. Drastic changes in my life came coincided in time with drastic changes in the State. This was back in the times of the Soviet Union. You probably weren’t born yet, but there was such period in the Soviet Union known as “perestroika” (“restructuring”) that was started by the then General Secretary Gorbachev.
This restructuring was associated, in particular, with the emergence of some new firms, the process now called business activities. Back then, it was an opportunity to establish, firstly, cooperatives, and, secondly, joint ventures with foreign participants. Before then, in the Soviet Union the field was completely monopolized by the State. Therefore, when this process started, I repeatedly said then, and reiterate now, that it was not my idea to set up a law firm, it was the wish of the students I was teaching at the time.
I subscribed to this idea. Why? Because, at that time, it indeed became possible to put into practice some of the things I previously was talking about only from the standpoint of remote theory. Well, the idea of setting up a firm ... back then, not a firm (it was a group that was supposed to provide some legal services), originated on the basis of a private international law club. This club brought together nearly 10 students who were very interested in this subject. It was then that we arrived at the conclusion that we could make money on what we did.
Initially, we were part of the student co-operative of the Kyiv National University and, later on, we span off into a separate legal entity named name Yurzovnishservis. What was the address of our location? It was the Department of International Law of the “yellow” building of the current Taras Shevchenko National University of Kyiv. But it is exactly this passion, the idea of the students, that gave birth to this business. As a cooperative, we had existed up until the legislation appeared that made it possible to change to a different form, which was a limited liability company, however, with a new name.
I am also often asked about the current name. Why did we decide to change it? Yurzovnishservis is difficult to pronounce. I remember meeting an American businessman who came to the country. He said: “You should somehow change the name because I cannot pronounce it in three breaths.” Then the guys read somewhere that there were companies that included names. At the time, Baker McKenzie was already operating here. This was how we started operating in the form of a limited liability company.
Then another transformation took place (when the law on the bar was enacted). For that purpose, in order to fully conform to the form and content of our activity, we have once again been re-registered as a legal entity known today as the “attorneys’ association.” This was how this long period passed. We traditionally believe that we are 26 years old, but this period begins from the moment we received the name we have today. But actually, we first used the practice of providing legal services sometime in the year 1987 of the past century.
– How would you compare the conditions in which law firms were established in the 1990s, when the legal services market was emerging, with those that exist today?
– Speaking about such comparison, I should tell you the following. Just imagine that we set up a law firm with neither a penny in investment nor a computer (we only had a law department’s phone). Nowadays, first, it is impossible to imagine setting up a firm or even an ordinary lawyer’s office with such resources at hand. Second, you see, at that time, we were actually the chief cook and bottle washer in the legal services market.
The legislative framework was very primitive: the Civil Code then in effect was a far cry from the currently effective Civil Code. Most importantly, the only regulatory instrument we fed on at that time was the Law on Business Companies. This law actually stipulated that it was necessary to develop the so-called constituent documents of new legal entities. So we churned out such constituent documents of newly established legal entities. Back then, there were no questions about securities, stock market, etc. We focused mainly on business matters with a foreign element. Today I see that the main problem for starting a law firm is to find the enthusiasts I had back then.
People often tell me: “So you set up a law firm and so on and so forth...” And you know what? I’d like to say that the lion’s share of all that work was done not by me, but by those students who, as the saying goes, caught this wave. This also matters today. Yes, the regulatory framework has changed, the ways and methods have changed, the bar is now far from what it was in the early 1990s, but, both then and now, the most important factor is the desire to establish and act. You will certainly take your lumps, there will be problems, there will be many things, but if you go ahead confidently, then everything can be overcome.
– How did the first partners join your firm? When did it happen?
– When we were organized as a cooperative, no such form as a partnership existed at that time. Then the form was somewhat different. It was when we turned into a limited liability company, those students who were members of the international private law study group formed the core group of partners. There were students from the international law and international economy departments and even from the department of international relations. At that time it was a group where no one asked who was or was not a partner. Because all those who stood at the origins of all this turned into a partnership naturally and automatically.
The only thing was, perhaps, that in view of my age, they decided to elect me to be the managing partner. I must say that, though being the managing partner, I did not do much managing. I came to understand that if I would meddle with all this and would not do this very professionally, I could do more harm than do good. I always supported ideas and proposals coming from my colleagues, so that the partnership was rather fundamental in view that the partners laid down the very foundations of our activities, including the values we still keep even today.
The partners have been changing with time and I tell you why. Firstly, an economist or international relations specialist, for example, could not become an attorney. One of those lawyers who were at that time took a public office later. It was Pavlo Piabikin, who is now the General Director of International Airport Boryspil He contributed very much as a lawyer to establish our firm. By the way, our international private law study group met for the first time at his apartment. Another partner decided that he would be engaged in somewhat different business, so we concluded that it would be better for him to set up a law bureau of his own. New partners joined us from time to time. Naturally, they were not those who stood at the origin of the firm. It was the first partners who actually founded this firm.
– How did you decide about changing managing partners? Was it an easy thing to do for the firm? How did it happen in general?
– It seems to me that each time it was smoothly and rather easy. As for me, I clearly understood that one did not grow younger but just the other way round.
Lots of those law firms who started their business in 1990s and were then on a roll no longer exist now. Why? Because they stopped short of the question you've just asked me. Therefore, it was Oleg Makarov who became the managing partner after me. He has put a great deal of efforts to develop the firm both during my term of office and thereafter. Moreover, he has good managerial skills and administrative features and is very good at communicating with people, so that he was a natural choice at that time. From that time on, I have been – how they called me – the senior partner.
The managing partner was replaced for the second time comparably not long ago, just a few years. It was the time when Makarov was elected as a member of Kyiv City Council. Naturally, there were lots of factors for which he could not devote any longer much of his efforts to the firm. Then all came to the same conclusion that Andriy Stelmashchuk suited the best to accommodate the requirements to the managing partner. He was not a graduate from International Relations or International Law Department, not even the Institute of International Relations, but Kyiv-Mohyla Academy.
Besides, I was often said before that my students worked at our firm only. Of course, when I lectured I could invite somebody for a practical training at the firm, but I did not ever touch upon deciding whether to hire such person or not. Therefore, we now have at the firm graduates not only from our Institute of International Relations, but Kyiv-Mohyla Academy, Law Academy of Kharkiv, Law Department of Taras Shevchenko National University of Kyiv, University of Donetsk, University of Lviv, etc. Thus, it is paramount to preserve the spirit of partnership not among the partners alone. I have always been adhering to such a position (especially it has been well implemented by the previous managing partner and the current managing partner continues doing the same) that there are no superiors and subordinates among lawyers. Everything is going well when all feel like professional partners and experts in their fields. It is very important!
Anyway I should say you that I do not remember anything that could be for us a revolution or surprise when we elected the managing partner. This has always been natural. Today I see that Andriy, though he presides the Ukrainian Bar Association, which presidency takes much of his time, has managed to organize the work so that even when he is away sometimes, he is still here all the same. This is very remarkable.
I repeat again: the most important thing is that the managing partner must comply with those fundamental principles and do what the associates expect him to do. For example, nobody believed me then nor believes now that, as long as our law firm has been operating, there has been no such thing that we pay an associate anything "under the table." We pay salaries though the accounting department only and pay all of the taxes. I must say that many did not believe it (even those from leading law firms). I understand why it is so. But if it would have been otherwise or somehow different, then what would be associates' attitude to the partners? Moreover, the partners earn their shares in such way only. Naturally, they share the dividends, if any, at the end.
– Please say how did you seek for clients when the firm was just established? How can it be compared to searching nowadays?
– It is difficult to say who sought whom, but such a situation did exist. Generally, there were two trends. If we speak about foreign trade operations related to foreign market players, for example, we brought to the Ukrainian market such well-known and respectable business entities as McDonald’s and DuPont, who hold now leading positions.
But what was the main idea behind this? First of all, I had a chance to speak at conferences attended by foreign businessmen. We got somehow in touch in such a manner. DuPont was one of the first among our clients and then they told something about us to Monsanto, its competitor, so that was how it started. There was McDonald's then. Subsequently, Baker McKenzie, a globally known law firm, came to work here. When they came they were not well-versed in the Ukrainian law and legislation. Whenever they approached us, they shared with us certain clients, while we shared some with them.
When it comes to purely Ukrainian clients, at the beginning we had little of them. As I said above, we mostly focused on the legal regulation of foreign trade relations. At that time, we did not have yet such big competitors who invaded this segment, and our domestic entities approached us when they faced problems. This was so for cooperatives and then for agricultural associations when the collective farms ceased to exist. Gradually, somewhere in the middle of 2000s we had our client base equally divided into foreign and domestic clients. I cannot recollect that we ever had to chase clients. Indeed, we did some advertising. The one we call "marketing buzz" used to work best. We have always been cooperating and still cooperate with our foreign clients in a transparent and open manner. The others came to learn this too.
– If you have had to set up a law firm of your own once again (to start all over again), what mistakes and what steps would you like to avoid? What would you recommend to the young generation who will to set up their own law firms?
– In the first place, anyway this is the business you should start doing professionally. It is not possible now to do this as an amateur. In the second place, it should be kept in mind that not every person has such psychological and emotional abilities that would enable him or her to act as an attorney in court hearings. More so as the bar is a type of business where you must protect a person even if you disagree with something you client is telling you about. There are lots of people who are good analysts and may be good scientists as well... Our business requires us to be active and always be in good shape.
What mistakes did we make? I cannot recollect that there were some major mistakes or blunders, everything was going on naturally and by itself. Our activities were affected adversely by what was happening in our country. Thus, each time there was a crisis, we suffered from it as well. When there was an upturn (such as in 1990s and early 2000s before the crisis), this was quite another situation. Therefore it is important to respond properly and calmly to those events that may occur and are occurring.
Today, as far as it goes to setting up a firm, it is paramount to find like-minded people to avoid a situation when one wants one thing, the other wants another thing and the third one wants no one knows what it might be. If such a team does not exist, then it would be better to set up and develop a law office on your own. Thus, it would recommend those who want to start its own law business that they must start from scratch and be dedicated persons. Naturally, there will be knocks and you will take knocks, but you should remember what once told me an old Hutsul from the Carpathian mountains: "There is no such bad thing that could turn out better someday." This is the principle you should keep in mind from the very beginning when you create a law business: "Though something is bad, be aware that someday it will turn out for the better."
– What legal service market key milestones could you distinguish? How would you describe each of them?
– Such milestones can be distinguished indeed. First of all, it is worth noting that the legal service market as we know it now started originating yet in the early 1990s. That was the period of origination when those who entered this market were not prepared very professionally. The first substantial change was the adoption of the Law of Ukraine on Commercial Companies. The next milestone was connected with the adoption of the Law on the Bar. At that time a great deal of those who called themselves practicing lawyers turned into attorneys at law. Such status afforded us more opportunities, either within or outside.
This is so in organizational terms, while, from the perspective of a sphere of business, the milestones are connected with the economic situation in the country. When some changes occurred in the early 1990s in relation to privatization, legal activities surged. Subsequently, when any crisis occurred, these activities declined with some firms ceasing to exist. Therefore, I have always been saying and will say that the main thing is to have a strategy and not to panic if there are certain financial or any other difficulties. The country started recovering from the crisis in the early 2000s and showed major growth. A number of new law firm appeared, who are now doing well on the market. Thus, we speak about such a gradation because lawyers are those who earn money not from legal services to themselves, but legal services to clients. The client must, in the first place, be interested in them and, in the second place, be able to pay for these services. So, if the economy starts reviving, the legal service market starts growing.
– What main trends do you see on the legal service market? How can this market change in perspective (in 2, 5 or 10 years)?
– I think that Ukrainian legal service market (if compared to Russian, Kazakh or Belarusian ones) may hold a credit, among other things, for domestic law firms playing the leading role in our country. Foreign firms who came here have their segment, but this is not what happens in Russia or Kazakhstan. So, the main purpose I see now is to develop Ukrainian segment of the legal service market. There are all preconditions for this.
Firstly, today those who study law and enter this market are well versed in the laws, fluent in foreign languages, and proficient in this business management, etc. Therefore, it is important not to allow that someone could take over this market.
Secondly, I see as promising those law firms only that have determined what is their professional focus. For example, we are focusing on litigation practice. Though we did not practice criminal law (white collar crime practice), with time it appeared to be connected with the development of the litigation practice. We have found out recently that many of our clients (especially, foreign ones) are interested in intellectual property protection, so we are developing this practice area.
Moreover, I have a good look at what they call now "boutique firms" if they are on the crest of the wave and can navigate choosing right direction and whom they should provide such or the other services. I don’t see that any crisis is threatening to our legal service market. In addition, I see great perspectives and opportunities for setting up new law firms as this market is still untapped.
Thirdly, I am convinced that the policy being implemented by the Ukrainian bar association to make this market open and transparent will yield its fruits. The future is with professional and transparent law firms having clear strategy and values. They will set a trend in the profession of attorneys and lawyers Thus, the young generation will strive to come and show their worth here.
In any event, if someone has come to work in this area, he or she must be supported and afforded to show what he or she is made of. This is our psychology and methodology of our firm. The most important thing is relationship between associates at the firm. We believe that a person must fulfill his or her professional functions while being free professionally. Generally speaking, lawyers fall into specific category of people as they all believe that they are worthy. Do you see the opera house there, how many artists are there? Each is convinced that he or she is worthy of the title of honored artist or deserves a prize. Lawyers are the same. It is good, but an ambition must be backed up with ammunition and ammunition is knowledge. Ambitions are very good things!
– You have mentioned the Ukrainian Bar Association. How do you evaluate the role of UBA? How does it affect the legal service market?
– Indeed, I can evaluate the role of UBA. It was established in my sight and I recollect when it happened. In general, an idea to create UBA has been modifying in different ways. In the beginning, it was another structure based on that time movement, but it was Ihor Shevchenko who started arranging it professionally. He was the first President of the Association. The most important was that this structure got rid of so called "Soviet complex". There were the Union of Attorneys and the Union of Lawyers at that time, but they were the associations that raised questions what they were and for what.
UBA has managed, from the very outset, to raise interest in its democratic principles. Since recently I have been pleased to see that this organization has been aiming at making Ukrainian legal service market transparent and democratic. I am sure that this is not an easy thing for Andriy Stemashchuk to do, but if we succeed, this will be a great success earned by the Ukrainian Bar Association as such. I like that the Association has its committees and units, all of which are operational. Moreover, I like that students are actively interested in it. I saw it with my own eyes both in Lviv and in Kyiv. Therefore, I respect UBA more than others due to its democratic nature and since it is interested in and facilitates professional development (especially among students). So, I see a grate perspective and hope that everything will go on so.
Published: Yurydychna Gazeta, #19-20, 15 May 2018