Ukraine crisis: Lawyers draw up contingency plans as security fears and sanctions mount

As Russian troops gather on Ukraine’s borders before what many fear escalates into a full-scale invasion, Ukrainian and Russian lawyers say they are still at their posts for now, but plans Contingencies are being put in place for staff, and customers are preparing for the possibility of sanctions against Russia.

Tensions between the West and Russia have been rising since November, when Russia began deploying troops along the Ukrainian border, numbering around 150,000, according to multiple reports. Despite assurances from the Kremlin that many troops have been withdrawn, Western politicians remain dubious.

Lawyers from both countries told International that while they try to stay focused on their work, they worry about the safety of their staff in the face of the growing possibility of armed conflict and the effect on the affairs of subsequent Western sanctions against Russia. .

Moving offers

Law firms in Ukraine adopt approaches that range from “wait and see” to active, full-scale contingency planning.

Over the past month, Kinstellar — an Eastern European regional firm whose Kyiv office last year added 60 lawyers from DLA Piper — set up an “emergency committee” to formulate plans in case of emergency. Among the measures introduced are offers for staff to relocate outside Ukraine to other company offices, including in Hungary and Slovakia, which are closest to Ukraine.

It also offers opportunities for secondment to “best friend” companies, as well as financial support. This includes the offer of salary advances of several months’ salary, with around half of all staff accepting the offer.

The firm has set up a 24/7 information hotline for relocating staff, as well as a client hotline, and plans how to distribute work when lawyers move to ensure continuity of clients.

Olena Kuchynska, associate co-director of Kinstellar Kyiv, told International that the plan was based in part on the experience of law firm managers who experienced previous tensions with Russia in 2014 and 2015.

She said the measures had been welcomed by staff in the office – and despite the context, people were continuing.

“Even though it’s not the easiest situation or the best time, people are very busy with ongoing projects,” she said. “I guess that’s a good way to think about something else.”

Other companies with major offices in Kyiv are also drawing up contingency plans while claiming that business is continuing as usual.

Dentons, which has around 21 lawyers in its Kyiv office, according to its website, said the office is open and fully operational but has contingency plans in place to keep in touch with staff and ensure continuity. activities in the event of an escalation of tensions.

Oleksiy Feliv, managing partner of Kyiv-based international law firm Integrites, said “Clients’ work is uninterrupted: we continue to serve current clients, prepare offers for new projects, close deals, to sign new contracts and even to speak at international conferences in Kyiv.

“We think that’s the best we can do instead of panicking or moving out,” he said.

At the same time, Feliv said, the company has made arrangements “to be infrastructure ready,” adding that its planning has benefited to some extent from the experience of working remotely and other pandemic preparedness measures.

“We are keeping our team informed and following the news, always believing that diplomacy and common sense will prevail,” he said.

Indeed, several leaders of law firms in Moscow and Kyiv claimed that reports of an impending conflict seemed exaggerated.

Mikhail Ilyashev, managing partner of Ilyashev & Partners law firm, headquartered in Kiev, said he does not believe that “no invasion is possible in the 21st century, so we continue our business activities on a normal basis. “.

He stressed that the situation on the ground was “much calmer than in the media. Offices, schools, stores operate as usual.

Laura Brank, managing partner and head of the Russian practice at Dechert in Moscow, took a similar view.

“Nobody at this point is thinking, ‘We have to exit the market,'” she said.

Noah Rubins QC, partner and head of Freshfields Bruckhaus Deringer’s Russian litigation practice, agreed that for now the Ukrainians are taking a calm approach.

But he added that the situation “could change very quickly, of course, and no one knows if this week will lead to an all-out war between Russia and Ukraine, however surreal that may seem.”

Sanctions against Russia?

As companies understand how urgently they need to respond to security concerns, partners are also drawing their attention to the impact on customers if the West imposes tougher sanctions on Russia.

Rubins, of Freshfields, said it was an issue companies were watching closely.

“The question is whether the sanctions against Russia, which we have all lived with since 2014, will become more ‘invasive’ in the future, making it difficult for international companies to provide legal advice to Russian companies,” he said. -he declares.

“If there is an invasion of Ukraine, I suppose it is inevitable that the sanctions will become broader and deeper. Otherwise, there should be little change,” he said.

Brank, of Dechert, echoed that, adding that if sanctions hit, it would likely increase the need for legal services.

“If Western companies were to exit, then there would be a lot of legal work that would ensue in terms of cutting employees, terminating leases or selling assets,” she said. “If major sanctions were imposed and Russia responded with counter-sanctions, Western companies might decide to pull out of Russia.”

Brank added that Dechert is seeing demand from clients seeking to assess and mitigate the risk of losses due to possible sanctions against their suppliers or customers.

Ilyashev acknowledged that there had been an increase in client requests, adding that his firm had received “numerous requests for the preparation of legal opinions and plans for clients on various issues related to a ‘state of war’. : impact on employment issues, contractual obligations, corporate obligations in the event of war.

“Companies are preparing for the worst-case scenario,” Ilyashev said.

Suren Gortsunyan, co-founder and managing partner of Rybalkin Gortsunyan & Partners in Moscow, said his firm has also been approached by international clients to draw up contingency plans.

He said customers had asked, “If this happens and we want to take action, would you take care of it for us?”

Kuchynska, at Kinstellar in Kyiv, said she sees similar requests from clients for information and emergency planning in areas ranging from employment to banking to IT. But in her field, mergers and acquisitions, clients are pursuing their acquisition plans despite all the uncertainties, she said.

Punishments? “They are a way of life”

Even if sanctions were to strike, lawyers interviewed by International seemed stoic about the likely impact on their cases and those of their clients.

Brank suggested that private companies were unlikely to be affected, given the negative experience following the 2018 sanctions imposed by the United States which had a much greater than expected impact on international trade.

Gortsunyan, a business scholar, suggested that “sanctions are almost a way of life here, something businesses learn to live with.

“You can’t really plan around them,” he said. “But you have to be aware of it and be ready to act.”

Additional reporting by Krishnan Nair.

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