How to choose your lawyer?

“Quality legal aid is not necessarily expensive. You just need to find your lawyer,” says Bogdan Ustimenko




The fact that business involves risk follows from its legal definition, but it is usually assumed that this risk concerns economic factors. In reality, doing business in Ukraine is fraught with many non-economic risks as well and may even result in criminal prosecution. Lawyer Bogdan Ustimenko describes existing risks and shares how businessmen can protect themselves and their companies and who can help them with this


What are the greatest threats to Ukrainian business today?


Ukrainian businessmen today are more vulnerable than ever. They have to contend with huge risks, both economic and criminal ones. If some four years ago the worst thing that could happen to them  was a tax audit, now the risks are much more serious.

The annexation and occupation of certain parts of Ukraine resulted in a sort of legal vacuum where it is extremely difficult to protect yourself. So, on the one hand, many companies, including state-owned corporations, suffered huge losses due to the expropriation of their assets in non-controlled territory. This amounts to billions of dollars and these profits, instead of going to Ukrainian companies, end up in the pockets of unlawful entities controlled by the aggressor state.

On the other hand, law enforcement is profiteering from what little fortune business has been left with. I’m saying this from personal experience: the most serious problems for entrepreneurs originate in the prosecutor’s office, the police and the Security Service, which use their powers for “unofficial” purposes. Their illegal activities are possible due to the absence of fair trial, the fear of judges to acquit the defendants, as well as our legislation which has been disproportionately altered and made more restricting under the convenient excuse of combating terrorism.

Today everyone with any property or enterprises left in non-controlled territories risk criminal prosecution for financing terrorism or participating in terrorist activities. Such charges almost always result in arrest, since the Criminal Procedure Code does not provide for other preventive measures in such cases.


What can be done about it?


About law enforcement? Globally speaking, we’d need a weighted political resolution and a change of perception among the officers regarding their mission in the country. However, it sounds like a utopia in our times, which is why business should think about protecting itself. First of all, it is necessary to take care of problem prevention, and for this one needs a professional. You will require a full analysis of internal and external risks, as well as of all your counterparties, to made sure that your company has a squeaky clean reputation.

It is strategically wrong to begin the search for a lawyer when the problem has already arisen, especially after having failed to find a solution on your own. This raises both the cost of lawyer work and the total cost of the dispute. I prefer the approach of foreign companies when the most insignificant action is carried out only after consulting one’s lawyer. Preventive measures often play a decisive role in the protection of business.


Well, that does it for our authorities. Now, what can a conflict-affected company do against Russia?


I believe that one should fight for justice, even if you have a small business and the offender is one of the strongest countries in the world. There are legal tools for this. Thus, any company that suffered from illegal expropriation in Crimea could file a complaint with a court on the basis of Article 5 of the Agreement of 27 November 1998 between the Russian government and Ukraine Cabinet of Ministers on Promotion and Mutual Protection of Investments. This provision expressly states that expropriation is only permissible with the condition of “prompt, adequate and effective compensation” at the “market value of expropriated investment”, and delays carry a penalty until said compensation is paid.

Ukrainian (private and state-owned) companies, instead of simply complaining about damages, should use all available instruments of legal protection. This is important, among other things, for correct assessment of the conflict by the international community and for the official position of every state regarding it.

Moreover, there already exists positive judicial precedence for Ukrainian companies. In the dispute Everest Estate LLC and Others v. Russia, the Permanent Court of Arbitration (PCA) located at The Hague (Netherlands) found a violation of the rights of 18 Ukrainian companies with property in Crimea as a result of illegal expropriation of hotels, apartments and other real estate by the Russian government. The Court awarded the applicants about $159 million (plus legal fees) for this violation of the intergovernmental bilateral agreement. The reason such applications are not filed en masse lies in the high price of foreign law firms that are usually hired by companies that suffered losses due to expropriation.


Indeed, the reality is such that companies that have already suffered losses need to pay even more to (possibly) get compensated, including for lawyer services, which is expensive.


Businessmen often decide against going to court for economic reasons (the costs may not pay off or there’s not enough money to cover them), writing off the losses incurred as the risk of doing business. However, when it comes to international courts and tribunals, you can expect that a fair verdict will be reached and enforced.

As for lawyers’ remuneration, the legal market is guided by the same laws as any other. High prices do not guarantee high quality. Of course, high-quality services should not be cheap, but good legal aid can be obtained at a fair price. And justice is priceless.


What should we take into account when choosing a lawyer?


First of all, you must consider a lawyer’s qualifications and litigation experience. The size of the law firm where that lawyer works or even its absence are not as important. When looking for defense from unjust criminal prosecution, you need an expert on criminal law; when you need representation abroad, your lawyer should possess experience with such cases. It would be best if these qualities were found in the same person. Another important point is high-level English proficiency. Without this your lawyer will not be able to provide the best quality of services if dispute goes beyond Ukraine’s borders.

National and foreign rankings, advertising and other marketing moves are secondary. The main thing here is experience. Ask about it before signing the contract: believe me, a good lawyer will not be outraged by this question.

Beware of even the most "experienced professionals" that give a 100% guarantee of success. A good lawyer is only able to give an accurate prediction of the outcome and potential consequences.


Is the preference of Ukrainian politicians and businessmen for foreign lawyers justified when it comes to international arbitration on economic issues or removal from the Interpol’s search lists?


Choosing a foreign lawyer over a Ukrainian one does not always guarantee the best service but does always cost more. The press often writes about huge sums that our politicians and businessmen pay to British or American lawyers for representation in international organizations - hundreds and thousands of dollars per hour. Perhaps it’s a cost of brand, which most Ukrainian lawyers lack at the international level, but we are not inferior.


You managed to remove the ex-Minister of Income and Fees from the wanted list. What was the key to this case?


The decision of the Commission for the Control of Interpol’s Files states that prosecution of my client is politically motivated, which contradicts Interpol’s principles. By the way, we managed to remove our client’s name from the wanted list much faster than our foreign colleagues usually do in such cases. Not to mention other clients whose placement on  the international wanted list by the National Police we managed to block through legal means. You have to agree, it’s worth hiring a Ukrainian lawyer for this.


Where do you begin when you set out to defend a company?


Studying the client. It is necessary to understand what his activities are based on, who he is in a legal sense. This helps identify potential internal risks, such as errors in the company’s registration process or a vague wording in the statutory documents. A significant part of the work goes to analyzing the client’s contacts – suppliers and customers, in order to discover external vulnerabilities. All legal documents signed by the client are also important.

Then, based on these vulnerabilities, the defense strategy is developed: what should be changed, which parts to “hide” with evidence of legality, etc. You must be prepared that the opponent will strike at your weakest links. No matter who you’re up against – counterparty, prosecutor’s office or a government.

In this regard, jurisprudence is like a sport, which I’m sure is of great help to any lawyer in their professional activities. When you step on a tatami, only two things matter. The first is that you must be sure that you will win. The second is that you must know exactly what to do in any situation. The tactics is the same: on the one hand, you must know your opponent, on the other –mind your own weaknesses and use your strengths to win. You must know how you are going to start the fight and how to finish it. That’s how I won all my own fights, including the final one in Tokyo (Japan) during the Asian Open Jujitsu Championship this year.