Y.Pilipenko: “All rigid things break, all flexible things flex”
Last year, many law firms celebrated their 20th anniversary. Therefore, the year of 1992 may be considered the period of birth of the Russian law business. During the twenty years, the appearance of a legal counsel has changed drastically (as Y.Pilipenko puts it, “of a soldier’s overcoat to a tuxedo”). And How great were the changes of the law business, what landmarks occurred in its development, can one say that the law business has evolved greatly during the last two decades? These are the questions we ask our interlocutors within the framework of the joint project by Legal Insight and Legal Success magazines “20 years of the Russian law business: results and perspectives”.
There is no need to present the protagonist of the interview. Yury Pilipenko is widely known among the lawyers. He occupies the position of the managing partner of one of the oldest and largest Russian law firms and actively conducts a public activity as a Vice President of the Federal Chamber of Advocates. It is from these positions that he evaluates the travel and the perspectives of the future development of the market of legal services in Russia.
Tell us, please, of the history of creation of your company, how it appeared in 1992 and who the first members of the team were.
The perestroika and its offspring – the cooperation movement – were the starting point for the law business as well as for all the other business in Russia. The cooperatives were springing up all over, and they needed legal assistance at registration and legal support of their business.
The creation of joint ventures – there was that funny form of entrepreneurship – was the next stage. And that business often turned out to be unusually profitable – the profitability at times reached 1000%, because businessmen were filling in the niches where the country seemed to be decades late. For example, there were no computers in the USSR, and those were imported from abroad through joint ventures.
At that time, in the late 1980-ies, many advocates as well those lawyers, who did science and specialized in civil law, especially in the external commerce, understood that law business could be started as there were clients and social demand as well. But it was only after the putsh of 1991, when it appeared that the vector of development of our country had shifted irrevocably, many, not only we, dared to make decisive steps. The “Law Firm "YUST"” LLC was registered in April of 1992.Mark Moiseyevich Boguslavsky, Andrey Lisitsyn-Svetlanov, Vladimir Pligin, Olga Vorobieva, and Andrey Maksimovich were at the origins of the Firm. All of them members of the Institute of State and Law of the Russian Academy of Sciences, all of them Doctors of Sciences. I joined that excellent team a half-year later. My role in the case of the SCSE, where I defended Vladimir Kriuchkov, Chairman of the KGB, played an important role.
Andrey Lisitsyn-Svetlanov was YUST’s General Director and Vladimir Pligin – Executive Director. The Firm was located in the first office building of Moscow, in the Staropimenovsky Lane, adjacent to the Svoboda Radio and the Italian oil company ENI. YUST only had two small attic rooms and a credit (not even a financial one – a goods credit: furniture and one Olivetti computer, employees taking turns to use it, were borrowed on future development), but the location was very fashionable. Some of those, who are nowadays Partners of YUST, were students at that time and worked at the computer at nights, when the senior colleagues did not use it.
The time was difficult, but interesting for active and dedicated people. The country was in turmoil, things were possible that had been unthinkable. In jurisprudence too. Legal regulation in the new conditions was clearly lagging behind the development of the market relations, so the professional creativity was freely exercised.
What were the first cases and the first clients?
In early 1990-ies, registration of joint ventures was the most common form of legal support. Many people wanted to create those, but did not know how to do it. The modern-day entrepreneurs are usually literate and do not employ lawyers in such cases, but they needed professional assistance at that time. There were very few law firms, and there were enough clients for everyone. The procedure itself was fairly easy, not taking longer than three days, and students did that work for us. The profile of our Firm formed then and remains the same even today: YUST renders a wide range of law services. Serious criminal cases were rather “image making” (like, for example, the defense of V.Kriuchkov that I mentioned earlier) and supplied no significant income.V.Pligin accompanied the first large international commercial project. A largest company Cameco started extracting gold in Kirghizia, in the territory, which, after the USSR disintegrated, was foreign jurisdiction, and the establishment of a joint venture there was a new, interesting and complicated business.
The practice of working with foreign investments came in useful fairly soon: within the year, YUST was involved in the development of oil deposits at the Sakhalin shelf. There were many new things to that work: joint actions agreements, agreements on sharing the production, concessions etc. But the projects connected with the construction and commission of the first business centers in Moscow, where we too were pioneers. YUST’s assistance was also demanded by the Russian military industry, which supplied its products abroad. Their counterparts were unpunctual in performing under the contracts, and we represented the interests of the Russian weaponsmiths in the international arbitration. I still take up such cases, and that experience is priceless.
How were the legal services governed at that time? How did the development of the sphere go?
The legal practice followed the economy and the legislative regulation of entrepreneurship and was changing actively, and the regulation of the sphere of rendering legal services froze for a long period of time. Starting in 1990-ies, it was possible to access the market of legal services as a commercial structure (LLC, JSC) or as an individual entrepreneur, and some still manage to operate outside of all forms, like artisans. It is still possible in our country to render legal services without even being an educated lawyer! The Soviet Bar, of course, was a restricted corporation, not accessible “from the street”, so to say. There was a joke that one could not become a lawyer without three crates of cognac.
It is no wonder that the market responded by creating a “parallel Bar”. A.Klishin, it seems, established the first Bar Association outside the framework of the classic Bar. Looks like the advocates were simply taken aback, as most of them dealt with criminal cases, and in the sphere of civil law – everyday cases of individuals. Some started practicing in the sphere of servicing the business, but most remained within the framework of their habitual specialization. And the classic Bar shuddered, when numerous “advocates’ guilds” and the like started appearing alongside of it. The “parallel Bar” was formed.
As far YUST is concerned, the firm’s founders entered into the Moscow Region Bar Association, and thus the Moscow Region Bar Association “Law Firm "YUST"” appeared. The Firm, being within the framework of the traditional Russian Bar, started representing its clients’ interests in the sphere of business activity, in Russia as well as abroad.
The Advocacy Law was adopted ten years ago, but one still does not have to be an advocate to render legal services. At the same time, I am not aware of a single law firm, which would not be connected to the Bar partly or wholly. It is also quite common, when a team of lawyers is a Bar Association and simultaneously a limited liability company of the same name. During a short period, a license was needed to practice the law. That license was easy to obtain for a person with a higher legal education. Nowadays, the situation again is such that any person may go to a court and be a representative under a power of attorney, even without legal or any other education. Of course, there are gifted persons among those “partisans”, but those are exceptions.
There are also advocates, whose professional level is far from optimal, but the Bar is a formed institution, special requirements to which are fixed by the law: obligatory legal education, two years of work experience, passing a special exam, the need to improve his qualification, the Code of Professional Ethics, and finally - disciplinary liability. This is what distinguishes the advocates and gives reasons to believe that the quality of their services is better than the quality of the services rendered by people, to whom such requirements are not presented.
I believe that the process of regulation of the sphere of rendering legal services, which has procrastinated for 20 years, should finally be concluded. And it would be logical and appropriate, if the merger of all lawyers within the Bar and imposition of the advocate’s monopoly at least on the court representation, and possibly, step-by-step, on counseling, were such conclusion. Only then we would be able to consider ourselves part of a civilized world.
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For more information see the printed version of the Legal Success magazine, No. 1/2013.
Other publications on the subject:
Factor of Law. How to choose a lawyer / City FM
«I admire outstanding people, but I stick by the institutions» / “Lawyer” Magazine
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