Matthew Keats, the Managing Partner of Linklaters’ Moscow office and head of the firm’s Energy and Infrastructure practice in Moscow, is among the most experienced and best known oil, gas, and petrochemicals lawyers in Russia, and he has advised on almost every leading deal in the Russian energy and natural resources market in the past five years.
CEELM:
How did you get to your current role in Moscow?
M.K.: After 15 years based in London, I was asked whether I would be willing to move to a position that had become available in our Moscow office. I jumped at the chance to come to Moscow. My practice has always focused on the oil and gas sector. Russia is without doubt the center of that world and the scale and value of Russian deals frequently dwarfs those in other markets. By 2010 the project finance market in Russia was also developing rapidly and, as a project finance specialist, I was keen to help build out our capability in Moscow.??
CEELM:
Was it always your goal to work abroad?
M.K.: Always. And in part that is why I joined Linklaters. I was always very focused on wanting to work on transactions and for clients across the globe. I regard myself as having been hugely fortunate to be able to realize that ambition. Other than a brief six-month stint in our New York office (in those days we were based in the iconic Lipstick building), although my work required me to travel extensively, I had never had the opportunity to work overseas on a permanent basis. At various points in my professional career I have been fortunate enough to work for extended periods in each of India and North Africa and developed deep relationships with clients and lawyers in those jurisdictions. Each time I regarded it as a tremendous privilege to be welcomed into worlds that were fundamentally different from my own. So when the chance came to be in Moscow for at least a five-year period I saw that as a huge opportunity.
CEELM:
Have you found Moscow to be particularly challenging city to live and work in?
M.K.: The greatest challenge remains the language barrier and I have simply not invested enough time to overcome that hurdle. My failure to pick up Russian will remain my greatest regret about my time in Moscow. Moscow is changing rapidly, however, and you can navigate yourself around Moscow these days in English. Even the Metro now has signs in English, which wasn’t the case when I first arrived and an understanding of the Cyrillic alphabet was essential to be able to use the Metro.
That said one observation from the past two to three years is that clients in Moscow increasingly prefer to use their native tongue for meetings. Understandably people prefer to use their first language for difficult meetings or negotiations. So whilst Moscow is becoming an easier city to live in day by day for expats I think the expectation increasingly from clients is that they would prefer to speak Russian where they can and I anticipate that bi-lingual lawyers will become the norm.??
CEELM:
In light of the Western sanctions against Russia, is this an awkward or difficult time to be an English lawyer on the ground in Moscow?
M.K.: Without question the last 12 months have been particularly challenging for everyone in the market. The perfect storm of the imposition of sanctions, ruble devaluation, high interest rates, and the oil price falling off a cliff has had a profound impact on investor confidence in Russia. Inevitably there has been a significant reduction in new money deals and international trade flows.?However there is still work for us to do. The market has not closed completely. We have all had to become sanctions experts in a short space of time, and we are working with clients on a daily basis to help them navigate their way through an increasingly complex sanctions-constrained environment. Our clients have assets and investments in Russia that they need to continue to manage. And there are new opportunities emerging all the time. Funding and investment is coming from new sources, particularly Asia and the Middle East. With a strong international network we have been able to support new entrants looking at Russia as a potential market.?The key is to remain flexible in what is an extremely dynamic and fluid environment.?
If the question is asking whether I have sensed any anti-Western sentiment in Moscow since the onset of sanctions the answer is not at all. The people I interact with on a daily basis are committed to maintaining an open and constructive dialogue. No-one wants to see the rebuilding of an Iron Curtain.
CEELM:
There are obviously many differences between the Russian and UK legal markets. What idiosyncrasies or unique challenges involved with the practice of law in Russia stand out the most?
M.K.: The three differences I would point out now for any expat coming into the market would be, first, that many clients in this jurisdiction have extremely high expectations in terms of speed of deal execution. Particularly for deals that have a political element the expectation is that transactions will be completed at breakneck speed.?Second, the involvement of procurement teams when clients are sourcing legal services is universal.
This is also true in Russia where many of the state-owned organizations have implemented extremely burdensome and, at times, bureaucratic procurement processes. These are hugely time-consuming and manpower-intensive exercises but unavoidable if you want to be considered for work from those institutions which represent some of the key players in the market. And third, in some cases, but not across the board, there can be a lack of appreciation of quality in terms of the legal work product and therefore lowest price will often win in competitive tenders. This makes winning work from certain clients and in certain sectors extremely challenging for the higher-end firms.??
CEELM:
What particular value do you think a senior expatriate lawyer adds – both to the firm and to your clients?
M.K.: Senior expatriates should bring with them a wealth of experience from working for clients and on transactions across the globe. While local expertise is essential, this international experience can be invaluable in terms of helping to find solutions to issues – solutions that might never have been seen before in this jurisdiction. We need to remember that the legal market in Russia is still young and is evolving all the time. Therefore an ability to bring experience from outside this jurisdiction can be hugely beneficial both within the firm and for clients alike. Expatriates should also help to ensure that best and consistent practice from across the globe is brought to bear locally. It is absolutely essential that our clients feel that they receive consistently high-quality advice and work product whether they are speaking to our lawyers in New York, London, Moscow or Beijing.
And finally, the value of the network cannot be underestimated. A senior expatriate should be able to connect people (again, both internally and clients) around the world. During my five years here I have frequently been asked “who should I speak to [in Paris Dispute Resolution/Shanghai corporate] about this…?”??
CEELM:
Other than Russia, which CEE country do you enjoy the most?
M.K.: I have had very little opportunity to see much of the CEE during the past five years. But I did have the chance to visit Budapest twice for work recently and was reminded what a beautiful city it is. The last time I visited Hungary was at the end of the 80s with a backpack. My recent experience was slightly more upmarket!?
CEELM:
After many years in Russia, you’re preparing to relocate back to the UK. What one place in Moscow – a restaurant or a tourist attraction, or anything, really – will you miss the most?
M.K.: Honestly, what I will miss most is the team we have here in Moscow. Our lawyers are some of the brightest in the Linklaters network. They are also great fun and have the ability to make me laugh however tough a day I am having. I will miss them hugely. Fortunately, although I will be based in London I will remain very involved in the Russia market and our Moscow office. So while I will be seeing less of the team it is definitely not goodbye!?
What I will also miss is the view from my apartment. I have been lucky enough to live right in the very centre of the city and have views of the Kremlin, the imposing Church of Christ the Savior and Gorky Park from my eighth-floor apartment. As a teenager growing up in Europe in the midst of the Cold War never did I imagine that one day I would be living in the heart of Moscow.
This Article was originally published in Issue 2.2. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
