Doing Business During War – The Challenges Facing Legal Firms in Ukraine

It has been one year since our friends and colleagues at Eterna Law, our Ukrainian member firm, were woken at 4am by the attacks on Kyiv. Here they tell us how they have managed over the past twelve months:

In the face of the never-before-seen challenges brought by 2022, Ukraine’s legal services market rather quickly went through from growing completely numb in the early days of the war to becoming fully operational again given the wartime realities. For some it took days or weeks; for others it took months.

We at ETERNA LAW, like most Ukrainian businesses, took primary care of our team’s safety just after the full-scale invasion began. Somebody put the Codes aside to take up arms to defend Ukraine; somebody joined the volunteer movement; somebody focused solely on their job; somebody is managing to do all these things together, and each and every one of them is making their invaluable contribution to Ukraine’s inevitable and, hopefully, imminent victory in their own way.

The legal services market has certainly changed. The market has contracted significantly, but the reduction in both supply and demand has not destroyed it. Governmental institutions getting back to a more or less normal functioning led law firms to resume their operations, but recovery is still far off. Some law firms are not over the shock yet.

We at ETERNA LAW have tried to go back to working in our offices as soon as possible since March 2022. If our clients work, then we work. We became active in many new areas in order to help the Ukrainians who are suffering from the consequences of the war. Since the early days of the war, ETERNA LAW has been helping our country through various missions by also providing Ukrainian soldiers with everything they need, taking care of our forcibly displaced fellow citizens, and delivering pro bono legal advice. Helping the Ukrainian Armed Forces is especially important to our company, as ETERNA LAW Associate Mykhaylo Korchynskyy, now a Sergeant Major, is serving in the military defending Ukraine in battle. In collaboration with law firms in Poland, the Czech Republic, Slovakia, Hungary, Cyprus, Latvia, Romania, Austria and Turkey, we launched a legal aid programme to help businesses and individuals while they have to relocate to these countries. We provide pro bono legal support to the United Nations Global Compact with their MentalHelpProject in Ukraine that ensures free access to psychological help for the Ukrainians who have suffered from the armed aggression.

Another priority for us at ETERNA LAW is to work on dealing with matters of compensation for harm inflicted on entities and individuals as a result of the war. Our International Litigation team obtained one of the first Ukrainian judgments for damages caused by Russia’s armed aggression. “This ruling is crucial not only for the restoration of justice, but also in terms of building a legal approach to address the complex matters of holding the Russian Federation accountable and making it compensate for the damages it has caused,” said Oleh Beketov, Senior Partner and Head of International Litigation Practice at ETERNA LAW.

Another critical mission we are pursuing on a pro bono basis together with non-governmental organisation Ukrainian Victims of War is a lawsuit against Russia’s major vacancies service where there are more than two thousand active vacancies published to recruit servicemen to fight in Ukraine.

To sum up how the law business is doing amid the war (based on ETERNA LAW’s experience), Partner Oleh Malskyy said, “It seems that all of the Ukrainian market’s top ten companies are in more or less the same situation. All these companies have their client portfolios diversified by their practice areas and the nationality of their local or foreign clients. Although they do have such diversification in terms of practice areas, client nationalities and, of course, invoicing currencies, all companies are in decline. But the 20-30 per cent decline is not critical for any of the law companies. A company is able to survive this level of decline. More crucial is the question of how long the decline will last, of to what extent will the work reduce, because we see a great deal of clients — and those clients’ businesses — beginning to suffer from the war, meaning that our business is suffering too.

“Our company has been bearing up for twelve months already — just like all companies that meet certain criteria. ETERNA LAW is actually doing a lot of things that all market players are doing: we are taking care of the safety of the employees who joined the Ukrainian army to fight in the war and we are involved in many volunteer projects. But our main goal is to save our primary asset — our dear team whom we love so much, whom we nurtured for many years. So we hope that we will win as soon as possible and that Ukraine will be rebuilt after the war.”