Latest research provides insight into how Russian in-House counsel are managing their legal departments

by Derek Benton on April 7, 2010 · 1 comment

in Corporate counsel issues,Martindale-Hubbell Connected

‘How in-house counsel in Russia are managing their legal departments’, our latest major research study for the region can now be found in Martindale-Hubbell Connected within the ‘CEE Research’ group (NB: You’ll need to register for MH Connected if you’re not already a member).

This is the fifth major study into the European legal services market commissioned by LexisNexis Martindale-Hubbell. In the past we tended to take a more regional approach with our surveys, but this report focuses mainly on heads of legal departments at major companies in Russia and how they are dealing with difficult market conditions.

Even before the onset of the global financial crisis, the leaders of corporate legal departments in Russia were beginning to gain more influence in their companies, as shown in our 2008 report, ‘How in-house counsel in Central & Eastern Europe select and retain their external counsel’ (also available within the ‘CEE Research’ Group in MH Connected).

Now they have even greater challenges put upon them, to manage more risk and achieve greater results with fewer resources, in the midst of market turmoil and great uncertainty. This situation has forced many heads of legal departments to seek greater predictability and efficiency when hiring external legal counsel. And their number one priority to achieve this – echoed by many of the peers globally – is to negotiate fixed fees. This comes at a time when many major and international law firms in Russia have grown complacent, if not spoiled, with a steady flow of work which has suddenly ebbed.

Russia is different than other major markets because there are only so many blue-chip companies there that maintain their legal budgets no matter what. So when the margins get tight, sometimes management will decree that no legal costs will be incurred. And even when it’s absolutely necessary, it still has to be signed off by the General Director.

In this environment, suddenly many large well-known American and Magic Circle law firms looked over-extended. After all, everyone saw the storm clouds on the horizon, but few thought it would affect them until it actually hit them. The market also became saturated with mid-level international firms all trying to fill an ever shrinking niche.

This report therefore gives an inside view to the challenging task of managing a corporate legal department in Russia under extraordinary circumstances. It also provides heads of legal departments in Russia with important management benchmarks and gives law firm leaders greater insight and understanding when dealing with their clients. To read the report in full visit the the ‘CEE Research’ group within Martindale-Hubbell Connected.

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