Ukraine's leading English-language newspaper since 1995

Andrew Mac, managing partner in Ukraine for Magisters. Since being established in 1997 by a group of Ukrainian lawyers with U.S. law degrees, Magisters has grown into one of Ukraine’s largest law practices. In recent years, Magisters has launched practices in Moscow, Minsk, Astana and has a support office in London.

But the firm’s influence extends beyond the legal business.

In recent years, top lawyers from Magisters, namely Yevhen Korniychuk and Serhiy Vlasenko, left the firm and leaped into politics. Both are members of Prime Minister Yulia Tymoshenko’s camp. Korniychuk’s father-in-law, Vasyl Onopenko, is head of Ukraine’s Supreme Court.

This year, the firm’s founder, Oleg Riabokon, threw his hat into Ukraine’s hotly-contested presidential election. An independent and not well-known by voters, he faces long odds in the Jan. 17 contest. But with voters seeking fresh faces, Riabokon might have a political future.

Even without such superstars, Magisters remains one of the top law firms with about 100 lawyers in the group, 65 of whom are in Kyiv. The group’s Ukraine office is headed by an American lawyer, Andrew Mac, who has more than seven years of experience in Ukraine, after starting his career in the United States.

In a Kyiv Post interview, Mac reflected on the past, present and future of his firm and discussed the legal services business in Ukraine.


KP: What has been the driving force behind your firm’s expansion? Has it been successful and how has this year’s recession affected the strategy?
AM: From the day Magisters opened its doors over 12 years ago, we have had an aggressive expansion strategy. The firm grew dynamically and rapidly in Ukraine with various partner acquisitions, culminating in the landmark merger in 2006 with Pravis, the leading litigation firm in Ukraine. In 2007, we decided that our expansion opportunities within Ukraine were limited. After a year of careful studies, the partnership put together a strategy that was focused on developing as the first regional CIS [Commonwealth of Independent States] firm with a large presence in leading Western markets. We commenced our CIS expansion by merging with a leading 20 litigation firm in Moscow.

When the crisis hit financial markets in the autumn of 2008, law firms were among the first to feel the pinch and many curtailed or altogether abandoned any further expansion. We made a bold decision to go against the flow and, in January 2009, at the peak of the crisis, we opened offices in London, Kazakhstan and Belarus. We saw this as a great opportunity to expand.

Obviously the risk was high. However, 10 months on we see that this was the right move to make. We have already become one of the largest law firms in Minsk. We are continuing to grow in Kazakhstan, where we have just launched a new oil and natural gas practice. And our London office is demonstrating great results serving as a conduit in servicing multinational clients investing in Ukraine and CIS markets. We have dramatically increased our visibility and brand awareness in Europe and today are recognized as the leading law firm in the CIS.

In June, we took a further step by successfully launching a network of preferred co-counsels to cover other jurisdictions of the former Soviet Union in Armenia, Azerbaijan, Georgia, Kyrgyzstan and Moldova. We now reach a population of almost 300 million individuals. Our strategy is focused to be the leading law firm with pan-CIS coverage and a strong representation in London.


KP: What advantage does a strong regional presence offer to your law group and clients?

AM: Over 80 percent of our clients are multinational companies, many of which operate in a number of the former Soviet states. Having a wide regional presence gives us a unique advantage to provide ‘one stop shop’ services across the former Soviet Union, where many multinational firms operate. For a number of large multinationals it is important that we can provide services in multiple CIS jurisdictions.


KP: What advantages of being “top-ranked” mean for clients? Does it equate to top-quality service and competitive fees, when compared to law firms in Ukraine that are ranked lower? What are your fees and quality of service, compared to lower-ranked firms?

AM: Brand awareness and law firm rankings are important, but are only part of our marketing strategy. We have established special relationships with nearly all of the world’s leading law firms, the so-called ‘magic circle,’ and we are their preferred lawyers in Ukraine.

The same applies to large investment banks and funds. These firms and funds are not too bothered about rankings, but are more concerned with the long and successful cooperation they have with Magisters. It has taken many years to achieve leadership status and we have done so by employing the best lawyers.

When it comes to fees, there are firms who quote lower rates than we do. However, we have achieved a reputation as the firm that is result-oriented and responsive. This is most important for clients and means much more than international ratings or a lower fee quote.


KP: Magisters was founded and managed by a group of Ukrainians lawyers, many of which have recently made a leap into Ukrainian politics. Most recently, your founding partner registered as a presidential candidate. What is driving this jump into politics and what does it mean for your firm? Does it offer unique influence or are they fully severing their ties to the firm? And, how can such top talent be replaced?

AM: In Ukraine, the know-how is very important, as is also the know who. Over the past 12 years, we have built up incomparable relationships with the executive, legislative and judicial branches of power, including anti-monopoly authorities, regulatory bodies, central bank officials, tax and customs agencies. We have excellent connections with the leading political parties in Ukraine. Three of our former partners are actively involved in Ukrainian politics. We are active members of the Ukrainian Bar Association with one partner on the board of directors. Our founding partner, Oleg Riabokon, left the firm in September when he announced his plans to run for public office. All of the partners who have entered politics have sold their shares in the firm and have no connection with the firm any longer. We have a clear company policy that any partner who decides to enter politics must sell his or her stake in the firm immediately. We clearly understand and appreciate that when a partner enters politics, he does it to serve the interest of the people of Ukraine, not our firm.

It is imperative to have employee succession programs in place. We are the only law firm in Ukraine to have attained the Investor in People standard, the leading international people management benchmark. A cornerstone of our firm is employing the best people and investing in their development, training, motivation, assessment, relations with company management and remuneration. To give an example, the partner heading up our banking and finance practice, Olga Khoroshylova, who today is recognized as the leader in this field in Ukraine, started off with our firm as a junior associate eight years ago.


KP: You are the first American managing partner of Magisters and from what we see, the first U.S.-born managing partner of a leading Ukrainian law practice. How does it feel, and what challenges or advantages does your leadership offer for your firm, and clients?

AM: It feels great. I grew up in a dually patriotic Ukrainian-American household and during my school days, I never thought in a million years I would be practicing law, let alone, leading the largest law firm in an independent and democratic Ukraine, and helping it expand to foreign markets.

Although language ability and cultural understanding does help as for leadership qualities, I do not think ethnicity or nationality plays the most pivotal role. I think my vision for the firm is the key advantage. And that is - becoming the leading CIS firm with a large representation in leading global markets, dynamically and aggressively investing in our lawyers and administration, to be the first to develop new practices and expand to new markets and be a model of social responsibility in each market we practice. This, by the way, is the same general vision our founding partner had when the firm opened its doors in 1997.

The challenge in any fast growth is to grow at a pace that your institution can sustain. It is a balancing act I think we have done well and continue to improve upon. For example, this year we have significantly improved our IT capacity with large capital investments, developed a strong support policy for our lawyers, seconded or studying abroad, and have had dozens of internal ‘secondment exchanges’ within our offices. We also support the development of our administration, which I believe is absolutely vital for the long-term success of any law firm.


KP: How has Magisters performed in recent years? Could you provide some figures to show how your group has grown in head count, revenues, deals handled, etc.?

AM: Magisters’ revenues in 2008 were $39.5 million, a 12.9 percent increase compared to 2007. The average revenue per lawyer in 2008 amounted to about $316, 665, a 20.2 percent increase over 2007. We have over 100 internationally-trained and locally qualified lawyers. In 2008, Magisters was ranked number one by Thomson Reuters for value among law firms in announced M&A [mergers & acquisitions] transactions in Ukraine. We advised clients in the deals worth $965.6 million, which accounts for 64.7 percent of the total value of announced M&A deals in 2008.


KP: Many top international law firms have entered the Ukrainian market in recent years, but it seems that at least half of the top law firms in the country are still Ukrainian firms. Why is this so? How do they compete with international giants? What advantages and disadvantages do Ukrainian practices have compared to international law giants? Do you see international law groups increasing their presence in Ukraine, and possibly other Ukrainian firms stretching beyond their homeland?

AM: We have succeeded in Ukraine and the CIS - for one simple reason – this is our natural home. Multinational law firms come and go, change regional focuses every few years. Magisters will not abandon Ukraine or the CIS. We grow together and ride out the difficult times together.

Magisters and many Ukrainian firms, take a very long-term view in developing practices and relationships. With the exception of a couple international firms who opened their doors in the 1990s, this is something most do not practice in a meaningful manner and, hence, have not done as well compared to their Ukrainian counterparts. Regarding new expansions, given the recession I would be surprised to see any large players enter the Ukrainian market in 2010.


KP: How has the recession shaken up the legal services business, and most notably top Ukrainian firms? Who was affected most and how? What are the short and long term implications for law firms and their clients?

AM: Undoubtedly, the recession has affected the business model and we have had to respond accordingly. For example: Prior to the crisis, we had a thriving real estate practice. When this market effectively ceased to exist, we had to focus on other practices. For example, dispute resolution and antitrust areperforming very well. We have also focused on financial restructuring work and only last week completed Ukraine’s largest restructuring.

The firms most affected are those who were too heavily focused in one or two practice areas. Those who had diverse practice areas and an equally diverse client base did the best.


KP: Ukrainian law firms operate in a legal and justice environment considered plain murky, full of corrupt judges and rulings. Many see lawyers as the middlemen passing on the bribes to judges in return for favorable rulings. As an American who earned a law degree and top level experience in the U.S., perhaps you can tell us how Ukraine’s legal services environment differs?

AM: We practice an unquestionable ethical approach. Over 80 percent of Magisters’ clients in Kyiv are multinational firms that comply with the highest ethical standards. Chambers Europe 2009 has recognized Magisters as a firm with a “stellar reputation.”|

Now, the biggest difference between Ukraine and developed markets, such as the U.S., is the efficiency and transparencies of the regulatory and judicial systems. I approach this with the utmost frankness with clients, telling them the pitfalls and hurdles and possible legal ways to mitigate at the onset of our cooperation.


KP: What reforms are needed first and foremost to clean up the system? Do you see any political will to make such changes in the near term?

AM: The biggest reforms necessary are ones each Ukrainian has to make in his mind and heart. There is not a single law or regulation that can end corruption or significantly change the course of the country, if its foundation is not deeply rooted in the values of society. To this end, the majority of Ukrainians must realize it is not the outcome of an election alone that determines one’s fate, but the responsibility one takes for her or his community that does.

In my opinion, Ukrainians achieved political freedom in 2004 but have done very little since to further democratic development in the country. It is easy to blame a few politicians or foreign influences. But I think that the key for Ukrainians is to develop strong societal institutions that will develop their communities and interests, and provide a sense of belonging and responsibility to its members. And this begins locally, with each person, whatever social status, position or city they are at – it is viewed by many as more important than voting.

In my hometown in the U.S., for example, my parents feel it is their duty to be part of numerous organizations from charity groups to neighborhood community watch programs. These groups do not go to politicians for help. On the contrary, politicians go to them, often without being even asked, to convince them that they have shared values and interests, and every few years their sincerity and performance is tested with elections. Better and responsive government will flow from this in Ukraine, as it has in so many Western countries.

I quite honestly do not see a political will now for such meaningful change, but I think that this will come very quickly. In a few years, the new generation of Ukrainians who do not remember Soviet times well and were exposed to the values I spoke, will start to change the country.


KP: A lot of lawyers lost their jobs during the recession. In light of this and the other challenges, such as widespread corruption and globalization, what advice do you have for law school students and aspiring lawyers in Ukraine?

AM: Know yourself and follow your passion. It is important to focus on the area of law that you really enjoy as you will be spending many hours of your life working on such cases. So it is important you take pleasure in what you’re doing. Get involved from the very beginning.

One cannot build a reputation for excellence by being passive. Use any opportunities you may have to obtain experience and look for volunteering opportunities. And always adhere to integrity in all your deeds. As Abraham Lincoln said: “When you do good, you feel good. When you do bad, you feel bad.”