Category: Uncategorized

Irina Novikova is the Head of Legal of Groupon responsible for the Russian and Ukrainian markets. After graduating from the Law Faculty in St. Petersburg, she first worked in the securities market – a field that she describes as being “very trendy in the country at the time.” She then proceeded to work in a number of industries leading up to her joining what she describes as the fascinating world of a young, flexible, fast growing e-commerce company.

   

Irina Novikova, Head of Legal Russia & Ukraine, Groupon

 CEELM: You have worked as an in-house counsel almost throughout your entire career. What do you enjoy the most about this side of things? 

I.N.: Early on in my career, I wanted to work in what I felt was a “real sector” of the economy. I did try working as a freelancer/external counsel but I soon learned that I was an in-house lawyer at heart. The difference in my mind is considerable, primarily resulting from the fact that, as an external counsel, you have to deal with specific problems that are passed on to you by the client. In contrast, working in-house allows you to focus a lot more on prevention. I am very big on tackling issues proactively before they get a chance to impact an organization. 

It is also great to be able to interact with the other business functions of a company. You encounter considerably different mindsets and different angles/perspectives of looking at things. Working as an external lawyer will rarely allow you to look at the world around you without your “legal glasses” on. 

Last, but definitely not least, you get to feel close to the business. You feel like you are a part of something great that creates value around it.

 CEELM: What does a typical day look like for you as the Head of Legal of an e-commerce business in Russia? What takes up the most of your time in the office?

I.N.: The first thing I do in the morning is address my inbox. Our company is quite widespread geographically, meaning I tend to have a full inbox by the time I get into the office. Based on that I plan and prioritize my day – both for me and for the rest of my team. Of course, there are also quite a few of regular administrative tasks – primarily basic housekeeping – that need addressing and I try to get those out of the way as quickly as possible. These can be anything really from signing off on time sheets to basic reporting for the global legal teams. After lunch I tend to look back at my day to make sure there isn’t anything particularly important or urgent that I let slip through. 

In terms of actual work carried out, I tend to be very hands-on with my team. All the lawyers on our team are involved in reviewing contracts regularly or attending courts as needed though, naturally, I tend to tackle the bigger or more strategic aspects.

 CEELM: How is your in-house team designed? Do you specialize your individual lawyers on specific areas or are they all generalists?

I.N.: We have a fairly small team – there are three legal team members on site. I see it as a trend to shrink the size of in-house teams. I would say we are all generalists. We use a group e-mail address where we receive requests for support regularly and, based on the morning exercise that I mentioned, we coordinate on who will take over what issues/requests. 

 CEELM: You mentioned you believe there is a growing trend to shrink the size of legal teams. What do you believe drives this? Is it because of budgeting considerations?

I.N.: I do think that part of it is the economic reality, indeed, the economic climate is rather challenging at the moment, both in Russia and globally. But I think it is more a matter of efficiency than anything else. Technology for example, has greatly increased the work capacity of smaller teams than it was feasible to provide in the past. For example, based on input from our US headquarters, we have switched to electronic signatures of documents. One year into using this feature we have found that it greatly reduces the workload on legal teams – despite the slightly increased risk resulting from the fact that the Russian market is still very big on having a paper trail. Even having pre-reviewed templates for contracts built into our systems which our sales force can simply use helps a lot as it means a lot less time spent on contract review. We then really only need to spend time on complex and non-standard deals – which are relatively few in a company such as Groupon.  

 CEELM: As a lawyer, what best practices have you developed for communicating effectively with your colleagues from other business functions (IT engineers, finance teams, etc)?

I.N.: Over the years I realized that face-to-face communication is critical. It helps you convey your logic, not just the request, if you take the time to talk to stakeholders directly. It lets you explain your train of thought that allows you to position yourself as someone focused on solutions rather than risk breaks.

The biggest challenge for a graduate fresh out of university is also his/her  zeal in taking risks. A lawyer needs to learn quick that there is no business without any risk whatsoever and, if all you do as an in-house lawyer is to try to push that into other business functions, you cannot built a relationship where you are seen as in the “same boat”, meaning you lose internal impact whenever there is something important you need to push through.  

 CEELM: What are the main legal aspects that an e-commerce business needs to handle on a regular basis in Russia?

I.N.: As is usual with new industries, the main issues always revolve around blanks in legislation or too many grey areas. As an in-house lawyer in such an industry, you end up having to navigate using principles, or the spirit of law, rather than the letter of law because the letter is simply not there yet.

 CEELM: If you need to outsource legal work, what criteria do you use in choosing your external counsel?

I.N.: For me it is very important that we understand each other in the sense in which I am very demanding with regards to my external counsel. If I feel at any point that an external counsel is acting superficially and not taking the time to provide sophisticated advice, it is very unlikely that I will work with such outside counsel in the future. 

The second is a commercial consideration. In a world where no one pays for billing hours anymore, I expect an external counsel to be as open and predictable in terms of the fees we can expect as reasonably possible. Of course, aspects will come up that will bump up the price tag from the original estimates, but we need those to be communicated in due time, and explained, not surprised by them when we receive the invoice.

 CEELM: Looking back at your career, what are you most proud of? On the flip side, if you had to point to one regret, what would it be?

I.N.: I think every lawyer has his moments or deals that they look back to with pride and I do think that happens to lawyers more than in most professions. For me, one particular project that I worked on I felt pushed my professional limits, and I take pride in having managed it successfully. It was a squeeze-out of minority shareholders that resulted from a privatization deal. When it was privatized, shares of a plant went to a lot of its workers, meaning that, when the majority shareholder wanted to acquire the full company, over 200 deals had to be made. That took a lot of coordination, negotiations, and paper work and I pride myself on having spearheaded it. 

If I had to point to one regret, I would probably skip coming back to the industries that I feel I have exhausted professionally. I am very happy working in e-commerce and I find it truly interesting and I regret not having moved into the sector earlier. 

Irina Novikova is the Head of Legal of Groupon responsible for the Russian and Ukrainian markets. After graduating from the Law Faculty in St. Petersburg, she first worked in the securities market – a field that she describes as being “very trendy in the country at the time.” She then proceeded to work in a number of industries leading up to her joining what she describes as the fascinating world of a young, flexible, fast growing e-commerce company.

   

Irina Novikova, Head of Legal Russia & Ukraine, Groupon

 CEELM: You have worked as an in-house counsel almost throughout your entire career. What do you enjoy the most about this side of things? 

I.N.: Early on in my career, I wanted to work in what I felt was a “real sector” of the economy. I did try working as a freelancer/external counsel but I soon learned that I was an in-house lawyer at heart. The difference in my mind is considerable, primarily resulting from the fact that, as an external counsel, you have to deal with specific problems that are passed on to you by the client. In contrast, working in-house allows you to focus a lot more on prevention. I am very big on tackling issues proactively before they get a chance to impact an organization. 

It is also great to be able to interact with the other business functions of a company. You encounter considerably different mindsets and different angles/perspectives of looking at things. Working as an external lawyer will rarely allow you to look at the world around you without your “legal glasses” on. 

Last, but definitely not least, you get to feel close to the business. You feel like you are a part of something great that creates value around it.

 CEELM: What does a typical day look like for you as the Head of Legal of an e-commerce business in Russia? What takes up the most of your time in the office?

I.N.: The first thing I do in the morning is address my inbox. Our company is quite widespread geographically, meaning I tend to have a full inbox by the time I get into the office. Based on that I plan and prioritize my day – both for me and for the rest of my team. Of course, there are also quite a few of regular administrative tasks – primarily basic housekeeping – that need addressing and I try to get those out of the way as quickly as possible. These can be anything really from signing off on time sheets to basic reporting for the global legal teams. After lunch I tend to look back at my day to make sure there isn’t anything particularly important or urgent that I let slip through. 

In terms of actual work carried out, I tend to be very hands-on with my team. All the lawyers on our team are involved in reviewing contracts regularly or attending courts as needed though, naturally, I tend to tackle the bigger or more strategic aspects.

 CEELM: How is your in-house team designed? Do you specialize your individual lawyers on specific areas or are they all generalists?

I.N.: We have a fairly small team – there are three legal team members on site. I see it as a trend to shrink the size of in-house teams. I would say we are all generalists. We use a group e-mail address where we receive requests for support regularly and, based on the morning exercise that I mentioned, we coordinate on who will take over what issues/requests. 

 CEELM: You mentioned you believe there is a growing trend to shrink the size of legal teams. What do you believe drives this? Is it because of budgeting considerations?

I.N.: I do think that part of it is the economic reality, indeed, the economic climate is rather challenging at the moment, both in Russia and globally. But I think it is more a matter of efficiency than anything else. Technology for example, has greatly increased the work capacity of smaller teams than it was feasible to provide in the past. For example, based on input from our US headquarters, we have switched to electronic signatures of documents. One year into using this feature we have found that it greatly reduces the workload on legal teams – despite the slightly increased risk resulting from the fact that the Russian market is still very big on having a paper trail. Even having pre-reviewed templates for contracts built into our systems which our sales force can simply use helps a lot as it means a lot less time spent on contract review. We then really only need to spend time on complex and non-standard deals – which are relatively few in a company such as Groupon.  

 CEELM: As a lawyer, what best practices have you developed for communicating effectively with your colleagues from other business functions (IT engineers, finance teams, etc)?

I.N.: Over the years I realized that face-to-face communication is critical. It helps you convey your logic, not just the request, if you take the time to talk to stakeholders directly. It lets you explain your train of thought that allows you to position yourself as someone focused on solutions rather than risk breaks.

The biggest challenge for a graduate fresh out of university is also his/her  zeal in taking risks. A lawyer needs to learn quick that there is no business without any risk whatsoever and, if all you do as an in-house lawyer is to try to push that into other business functions, you cannot built a relationship where you are seen as in the “same boat”, meaning you lose internal impact whenever there is something important you need to push through.  

 CEELM: What are the main legal aspects that an e-commerce business needs to handle on a regular basis in Russia?

I.N.: As is usual with new industries, the main issues always revolve around blanks in legislation or too many grey areas. As an in-house lawyer in such an industry, you end up having to navigate using principles, or the spirit of law, rather than the letter of law because the letter is simply not there yet.

 CEELM: If you need to outsource legal work, what criteria do you use in choosing your external counsel?

I.N.: For me it is very important that we understand each other in the sense in which I am very demanding with regards to my external counsel. If I feel at any point that an external counsel is acting superficially and not taking the time to provide sophisticated advice, it is very unlikely that I will work with such outside counsel in the future. 

The second is a commercial consideration. In a world where no one pays for billing hours anymore, I expect an external counsel to be as open and predictable in terms of the fees we can expect as reasonably possible. Of course, aspects will come up that will bump up the price tag from the original estimates, but we need those to be communicated in due time, and explained, not surprised by them when we receive the invoice.

 CEELM: Looking back at your career, what are you most proud of? On the flip side, if you had to point to one regret, what would it be?

I.N.: I think every lawyer has his moments or deals that they look back to with pride and I do think that happens to lawyers more than in most professions. For me, one particular project that I worked on I felt pushed my professional limits, and I take pride in having managed it successfully. It was a squeeze-out of minority shareholders that resulted from a privatization deal. When it was privatized, shares of a plant went to a lot of its workers, meaning that, when the majority shareholder wanted to acquire the full company, over 200 deals had to be made. That took a lot of coordination, negotiations, and paper work and I pride myself on having spearheaded it. 

If I had to point to one regret, I would probably skip coming back to the industries that I feel I have exhausted professionally. I am very happy working in e-commerce and I find it truly interesting and I regret not having moved into the sector earlier. 

Originally from Western Siberia, Ilshat Timeryanov graduated from Saint-Petersburg University in 2002. His career started with the TNK-BP division in Siberia, where he spent 3 years as a junior lawyer. In 2005 he joined Schlumberger as a regional legal counsel. In 2008 he was invited to join Gazprom as its International Head of Legal. During his time with Gazprom he travelled within Europe, Africa, and Latin America, negotiating petroleum agreements with national oil companies and governments, while managing his international legal team. In 2011 he joined GE as a Senior Counsel for Russia & CIS and a year later returned to the oil and gas sector. He joined Lukoil as a Chief Legal Counsel in Dubai, where he managed projects throughout the Middle East. His management of the West Qurna 2 progject brought Timeryanov to Iraq, where he has been living and working for a little over one year.

   

Ilshat Timeryanov, Chief Legal Advisor, Iraq at Lukoil

 CEELM: You have been working as an in-house counsel for over 12 years now in TNK-BP, Schlumberger, Gazprom, GE, and Lukoil. What would you highlight as the main differences between this and working as an external counsel?

I.T.: I believe the main difference is related to the specific, in-depth knowledge that you gain not just about the legal aspects of the specific industry but about the business itself: its operations, the technology involved, the processes from extraction to refining and transportation, the people and main players in the industry both within a specific country and worldwide. As an external counsel you tend to work on a specific issue with a fixed, clear goal. I do enjoy working in-house a lot but, in all fairness, I do not really have any experience working as an external counsel. 

 CEELM: You have spent your whole career working in the oil and gas and energy sector – what do you find most exciting in this industry?

I.T.: I think that the energy sector is a leader in many ways. Especially in Russia, Oil, Gas, and Energy represent some of the most important sectors and I think that some of the most interesting legal work revolves around them as well. 

The other aspect that I like about it is the mobility it presents. You get the opportunity to participate in main local and international projects, discover other markets, countries, cultures, and people much more often than in most industries. 

 CEELM: Indeed, you have quite an international career, having worked in Russia, the Netherlands, UAE, and now in Iraq, to name a few. From your experience, in which of these markets is the life of a lawyer most difficult and why?

I.T.: [laughs] It is probably not a surprise that the top of that list is held by Iraq. It is a very complicated and difficult market and there are a few specific reasons for this. Firstly, we are talking about “New Iraq” – after Saddam Hussein. At the moment, there is little, if any, stable legislation or general principles of business in place in the country. This ambiguity is very difficult to handle for a lawyer but it does present an incredibly interesting opportunity to be involved in shaping all of it as it is being built. 

I would say that Iraq has a fascinating culture. People have a good moral standard that make it easier to build bridges for communication. They want to grow, to cooperate with foreigners, and, the country is  open for international exchanges. It is a very interesting period in the country at the moment and I am excited to be a part of it. 

   

Block 10 and the West Qurna-2 megaproject (Source: lukoil-overseas.com)

 CEELM: Having worked in so many places around the world, what did you “borrow” from other cultures?

I.T.: Working out of Russia has taught me that the world tends to be different outside of it – which is really hard to grasp while stuck in one country. I felt first hand the fact that there are no two countries in the world that are the same but I also learned that, fundamentally, people do share pretty much the same objectives: to be happy, to continue to grow, and to leave peaceful lives. Naturally, I did grow professionally immensely throughout my experiences as well, but at the end of the day, it is this understanding of multiple cultures that I believe was key for me. 

 CEELM: You have moved with Lukoil from UAE to Iraq to provide Legal and Compliance support for the West Qurna 2 Project in Iraq. What type of work does that entail specifically for you?

I.T.: This is one of the biggest ongoing petroleum projects in the world. And it is not just about drilling and extracting oil. It represents a huge investment to the country – with Lukoil committing itself to spending USD 25 billion by 2025, after having already invested USD 4 billion to date.  

As I mentioned, it involves a lot of aspects from building up an infrastructure in the country, building processing facilities, pipelines, water intake facilities, training centers, living spaces for employees, developing training programs for local personnel. Simply put, it represents an integrated green field project where the end goal is not just to extract oil, but to build a whole new petroleum industry in the country from the ground up. 

The nature of Iraq does complicate things considerably. It is a rather unsafe work environment and we need to look out for a team of over 1000 people, both Russian expats and local workers. Safety considerations end up taking a lot of coordination – and time and resources – with simple meetings with custom officials, for example, requiring that we put on body armor and travel in armored vehicles on designated routes accompanied by bodyguards.  

There are also a lot of legal and compliance issues that need addressing. This is made particularly difficult because, as I mentioned, there is no real system of legislation in place. There are considerable sources that need to be considered from local regulations or official orders/letters, sharia law in some parts, central government regulations, and so on. 

Working with locals is also a dimension that takes up a lot of time. There are communities who have lived historically in some parts of the huge contract area and they need to be communicated with, and we need to reach agreements with them and compensate them accordingly. Building consensus with them takes a lot of communication and negotiations and this is particularly important because failing to do so can stop our operations all together at any point. 

 CEELM: Why was it preferable for the company to have you move there as a Russian lawyer rather than hiring a local legal advisor?

I.T.: There are two broad reasons. The first is that Lukoil, like any other global company, prefers to have its own people in a top positions – someone who knows its policies and internal workings well and whose track record can be tracked. 

The second aspect is related to the local legal market in Iraq, which, much like the rest of the country, is at its early stages. There are very few legal professionals on the ground able to work in a big international company at a very senior level. Many of them need to improve their English language skills and even fewer are familiar with international law principles for the same reason. We are, of course, in the process of hiring local lawyers because we do need their local expertise and legal knowledge. 

 CEELM: On a lighter note, what is your fondest memory of each of the countries in which you worked so far? 

I.T.: African countries, although I know better than to overgeneralize between them, I remember fondly because of their people. Libya, Algeria, Nigeria, Namibia, in all of these markets I met lovely, kind people who had a very rich and interesting culture. The natural scenery as well from some of these countries is also breathtaking.  

The Netherlands has a fascinating history which I enjoyed discovering while on the ground but the main reason I will always remember the country is because I rediscovered the joy of riding a bike there. Really, I would advise anyone visiting Amsterdam to discover it by biking rather than walking or any other means of transportation. 

Dubai, looking back at it, feels like a holiday. Everything there seems to be built to make it as comfortable as possible – really, good living and safe. Iraq…[laughs]..radically opposite but I enjoy the people, culture and my work there. 

Originally from Western Siberia, Ilshat Timeryanov graduated from Saint-Petersburg University in 2002. His career started with the TNK-BP division in Siberia, where he spent 3 years as a junior lawyer. In 2005 he joined Schlumberger as a regional legal counsel. In 2008 he was invited to join Gazprom as its International Head of Legal. During his time with Gazprom he travelled within Europe, Africa, and Latin America, negotiating petroleum agreements with national oil companies and governments, while managing his international legal team. In 2011 he joined GE as a Senior Counsel for Russia & CIS and a year later returned to the oil and gas sector. He joined Lukoil as a Chief Legal Counsel in Dubai, where he managed projects throughout the Middle East. His management of the West Qurna 2 progject brought Timeryanov to Iraq, where he has been living and working for a little over one year.

   

Ilshat Timeryanov, Chief Legal Advisor, Iraq at Lukoil

 CEELM: You have been working as an in-house counsel for over 12 years now in TNK-BP, Schlumberger, Gazprom, GE, and Lukoil. What would you highlight as the main differences between this and working as an external counsel?

I.T.: I believe the main difference is related to the specific, in-depth knowledge that you gain not just about the legal aspects of the specific industry but about the business itself: its operations, the technology involved, the processes from extraction to refining and transportation, the people and main players in the industry both within a specific country and worldwide. As an external counsel you tend to work on a specific issue with a fixed, clear goal. I do enjoy working in-house a lot but, in all fairness, I do not really have any experience working as an external counsel. 

 CEELM: You have spent your whole career working in the oil and gas and energy sector – what do you find most exciting in this industry?

I.T.: I think that the energy sector is a leader in many ways. Especially in Russia, Oil, Gas, and Energy represent some of the most important sectors and I think that some of the most interesting legal work revolves around them as well. 

The other aspect that I like about it is the mobility it presents. You get the opportunity to participate in main local and international projects, discover other markets, countries, cultures, and people much more often than in most industries. 

 CEELM: Indeed, you have quite an international career, having worked in Russia, the Netherlands, UAE, and now in Iraq, to name a few. From your experience, in which of these markets is the life of a lawyer most difficult and why?

I.T.: [laughs] It is probably not a surprise that the top of that list is held by Iraq. It is a very complicated and difficult market and there are a few specific reasons for this. Firstly, we are talking about “New Iraq” – after Saddam Hussein. At the moment, there is little, if any, stable legislation or general principles of business in place in the country. This ambiguity is very difficult to handle for a lawyer but it does present an incredibly interesting opportunity to be involved in shaping all of it as it is being built. 

I would say that Iraq has a fascinating culture. People have a good moral standard that make it easier to build bridges for communication. They want to grow, to cooperate with foreigners, and, the country is  open for international exchanges. It is a very interesting period in the country at the moment and I am excited to be a part of it. 

   

Block 10 and the West Qurna-2 megaproject (Source: lukoil-overseas.com)

 CEELM: Having worked in so many places around the world, what did you “borrow” from other cultures?

I.T.: Working out of Russia has taught me that the world tends to be different outside of it – which is really hard to grasp while stuck in one country. I felt first hand the fact that there are no two countries in the world that are the same but I also learned that, fundamentally, people do share pretty much the same objectives: to be happy, to continue to grow, and to leave peaceful lives. Naturally, I did grow professionally immensely throughout my experiences as well, but at the end of the day, it is this understanding of multiple cultures that I believe was key for me. 

 CEELM: You have moved with Lukoil from UAE to Iraq to provide Legal and Compliance support for the West Qurna 2 Project in Iraq. What type of work does that entail specifically for you?

I.T.: This is one of the biggest ongoing petroleum projects in the world. And it is not just about drilling and extracting oil. It represents a huge investment to the country – with Lukoil committing itself to spending USD 25 billion by 2025, after having already invested USD 4 billion to date.  

As I mentioned, it involves a lot of aspects from building up an infrastructure in the country, building processing facilities, pipelines, water intake facilities, training centers, living spaces for employees, developing training programs for local personnel. Simply put, it represents an integrated green field project where the end goal is not just to extract oil, but to build a whole new petroleum industry in the country from the ground up. 

The nature of Iraq does complicate things considerably. It is a rather unsafe work environment and we need to look out for a team of over 1000 people, both Russian expats and local workers. Safety considerations end up taking a lot of coordination – and time and resources – with simple meetings with custom officials, for example, requiring that we put on body armor and travel in armored vehicles on designated routes accompanied by bodyguards.  

There are also a lot of legal and compliance issues that need addressing. This is made particularly difficult because, as I mentioned, there is no real system of legislation in place. There are considerable sources that need to be considered from local regulations or official orders/letters, sharia law in some parts, central government regulations, and so on. 

Working with locals is also a dimension that takes up a lot of time. There are communities who have lived historically in some parts of the huge contract area and they need to be communicated with, and we need to reach agreements with them and compensate them accordingly. Building consensus with them takes a lot of communication and negotiations and this is particularly important because failing to do so can stop our operations all together at any point. 

 CEELM: Why was it preferable for the company to have you move there as a Russian lawyer rather than hiring a local legal advisor?

I.T.: There are two broad reasons. The first is that Lukoil, like any other global company, prefers to have its own people in a top positions – someone who knows its policies and internal workings well and whose track record can be tracked. 

The second aspect is related to the local legal market in Iraq, which, much like the rest of the country, is at its early stages. There are very few legal professionals on the ground able to work in a big international company at a very senior level. Many of them need to improve their English language skills and even fewer are familiar with international law principles for the same reason. We are, of course, in the process of hiring local lawyers because we do need their local expertise and legal knowledge. 

 CEELM: On a lighter note, what is your fondest memory of each of the countries in which you worked so far? 

I.T.: African countries, although I know better than to overgeneralize between them, I remember fondly because of their people. Libya, Algeria, Nigeria, Namibia, in all of these markets I met lovely, kind people who had a very rich and interesting culture. The natural scenery as well from some of these countries is also breathtaking.  

The Netherlands has a fascinating history which I enjoyed discovering while on the ground but the main reason I will always remember the country is because I rediscovered the joy of riding a bike there. Really, I would advise anyone visiting Amsterdam to discover it by biking rather than walking or any other means of transportation. 

Dubai, looking back at it, feels like a holiday. Everything there seems to be built to make it as comfortable as possible – really, good living and safe. Iraq…[laughs]..radically opposite but I enjoy the people, culture and my work there. 

Entrepreneurs rarely lack enthusiasm or passion. What they often do lack, however, is information about best practices, sources of capital, and applicable laws and regulations. To address this need, the Estonian office of the Glimstedt law firm has launched the new “LegalBooster” website, which claims to provide “all the legal stuff you need to know to get your start-up going.”

   

“A lot of my clients are start-ups, I love them, I love them for being so innovative. I think they’re changing us as much as they’re changing the world, and in this sense we’re really grateful to them for making us see our services and wanting to be better every single day, wanting to be more transparent, wanting to be more user-friendly.” (Anne Veerpalu, Senior Associate, Glimstedt)

Anne Veerpalu, one of the the Glimstedt lawyers behind the LegalBooster site, describes the venture as “basically a knowledge database for start-up companies, including not only template agreements, but basically using everything we’ve done before, meaning all the training materials that are relevant, and explanations regarding how to use them, as well as all the videos for trainings we’ve provided, presentations, blogs, and so on.”

The user-friendly site is divided into four sections: Blog, Materials, Videos, and Fund. The home-page contains regular updates of cautionary and/or success stories, as well as useful tips and recommendations. Templates for useful and common procedures like a Power of Attorney form and a Transfer and Licensing Agreement are provided, as is information about upcoming presentations, conferences, and other events of potential interest to new entrepreneurs.

The website’s content reflects what’s happening at the moment, Veerpalu explains. “We are using all of the experience that we gain every day in our practice and trying to put it into words and share it with the start-up community. For example at the moment we have lots of option agreements coming in … and we are seeing a lot of different kinds of option agreements or option terms, and then we blog about what we see and what we experience, and how it’s better to do it, and at what point it’s best to introduce the template, and so on.”

The team of lawyers behind the project (including Veerpalu, Glimstedt Partner Priit Latt, and Associates Merit Lind, Triin Tuulik, Mari-Liis Orav, and Maarja-Liis Lall, as well as Auditor Liis Laanesaar) isn’t worried about providing the information free of charge. Veerpalu explains that, “I think the trend of the legal services market is going towards transparency … and I think this is the way it must be done – it has to be done.” She points out that, “what start-ups actually do a lot when they start is they go around talking to other start-ups. This is the same sort of information they would collect anyway from the market. So basically what we’re doing is collecting it into one place and putting it in a structured form.”

Although the site is created by and managed by Estonian lawyers, Veerpalu believes the great majority of the information it contains is of general value, and useful to start-ups in other jurisdictions as well. And though “powered by” Glimstedt, Veerpalu insists that, “it wasn’t meant to be a marketing tool, and I’ve kept it as much as possible not being a marketing channel.” 

But that’s not to say its completely disconnected from the firm. Partner Priit Latt sees LegalBooster as another demonstration of Glimstedt’s commitment to its clients – and the community at large. He says, “LegalBooster delivers our message really clearly – keep your IP safe and take care of your investment proactively. Glimstedt is an innovative law firm mostly due to the booming technology sector pushing us lawyers to innovate our services. LegalBooster serves as merely one example of it.

On June 2, 2014, Romania’s Nestor Nestor Diculescu Kingston Petersen (NNDKP) announced that the firm is fine tuning its brand message and identity by introducing a new “Legal & Tax” tagline. The move, the firm explained, does not reflect a new capability, but is instead designed “to emphasize its professional leadership in these areas.” NNDKP Partner Ana-Maria Miron, who co-heads the firm’s Tax Advisory Services division, agreed to sit with CEELM and discuss the significance of the new tagline.

   

Ana-Maria Miron, Partner and Co-Head of the Tax Advisory Services Division, Nestor Nestor Diculescu Kingston Petersen

 CEELM: Is this primarily a branding/marketing exercise – emphasizing an integrated approach – or does the new emphasis refer to a genuine organizational or structural change in the firm?

NNDKP: This initiative did not involve structural or organizational changes. However, given that it aims at emphasizing a perfectly mature synergy between our legal and tax consultancy, our strategy focuses extensively, in the long run, on a better integration of these services across all the levels of the organization, so that every attorney, whether a legal consultant/litigator or a tax consultant, can better tailor the optimum solutions from both perspectives. 

In other words, we do things similarly, but we micro-manage all processes in the firm in the context of a stronger internal emphasis on the elements that differentiate us in the market – which we also have chosen to communicate formally (among these, authentic know-how and resources which translate into strong teams of 23 tax consultants and tax lawyers, 115 attorneys, consistent support from our mixed teams not only when the client makes the decision, but also when he implements it, etc.). 

 CEELM: Is this a response to client feed-back that the previous approach was unsatisfactory, or was this simply an internal decision that a more closely integrated approach would be more effective? 

NNDKP: As a result of a six-year close collaboration between our legal and tax teams, this was a natural step in our development strategy and a response to client demands – in a context where the value added came from the consultant’s ability to harmonize the pressure on fees with the same quality of legal and tax services and a team structure that would continue to provide the optimum and most viable recommendations for their businesses. 

 CEELM: Will clients need to request an additional review of tax implications, or will those implications be automatically factored into any advice you give them? 

NNDKP: Technically, our team is fully equipped and dimensioned to factor any legal advice from the tax perspective as well. However, this will not be done automatically, but depending on the project specifics, as we’ll effectively manage, in an adapted manner, the tax implications of the requests we receive. 

 CEELM: CEELM: What is the history of the firm’s tax practice? Was it part of the firm’s original offering, or was it added subsequently?

NNDKP: Although legal advice on general tax matters has been provided to clients since 1997, the specialization occurred gradually, so that a distinct tax practice was established in the firm in 2006, under my coordination. Two years later, the business challenges and opportunities on the legal and tax consultancy markets created the perfect framework to capitalize on the firm’s existing capabilities, with the addition of a highly-experienced team of tax consultants, former managers of companies in the Big4, led by Alina Timofti and Marius Ionescu. Thus, 2008 was the year which marked the beginning of the NNDKP legal and tax synergy, through the creation of the Tax Advisory Services division affiliated with the law firm. 

 CEELM: The firm has managed to build the largest tax consultancy in terms of revenue in Romania outside the Big 4. What were the keys to its success?  

NNDKP: It was not without challenges that we created this and developed the tax division from three professionals to 23 tax specialists and an impressive client portfolio for a “young” entrepreneurial venture. Our long-term business strategy encompassed a series of key strategic aspects that we first designed and then implemented, such as: measurable performance indicators, good talent management translated into the selection of the best tax professionals on the market and optimum retention strategies, adaptive account management, focus on brand growth and reputation management of the newly created entity. 

And the initiative launched six years ago did not only pass the test of time, but proved that we made the best possible choice, confirmed in terms of team strength, evolution of turnover, and the client portfolio. 

 CEELM: Of the three NNDKP Tax co-heads, two are originally accountants, not legal professionals. How common is this in the Romanian market? What are the unique advantages/perspectives that accountants bring to a law firm’s tax practice? 

NNDKP: In some European jurisdictions, only lawyers can act as tax consultants. In others, including Romania, economists can also provide tax advice.

While lawyers benefit from a holistic legal approach, which is essential in addressing a tax issue, the value added by professionals with accounting background resides in their good understanding of basic accounting and financial management aspects, rounded-up by the macro-economic know-how and 360 degree perspective (especially considering the higher number of projects where tax issues derive from accounting rules). 

 CEELM: What are the most complex tax projects that your firm has advised on recently?  

NNDKP: Among our most recent projects there can be mentioned significant deals in several industries:

• Assistance provided to an important international bank in a cross-border merger between its Romanian subsidiary and the UK headquarters, where we advised on all tax implications including the implementation advice.
• During the last post-privatization stages of a major automotive player, the tax assistance included the final tax restructuring of the privatized company, as well as complex negotiations with the State authorities for finalizing the process. 
• Design of tax procedures in relation to the inventory management and stocktaking for a major player in retail; our delivery consisted of a procedures mapping dealing with relevant profits tax and VAT aspects.
• Advice to a major real estate developer in selling two office buildings totaling a value of above EUR 120 million; we were involved in structuring the transactions, the advice during the negotiations, drafting the tax-related clauses in the sale-purchase agreements, etc.
• Advice related to the restructuring of an important agribusiness investment, restructuring caused by the Cypriot banking crisis. We provided not only legal and tax advice, but also tax assistance in relation to the compliance component of such a restructuring.

Taylor Wessing e|n|w|c’s Slovakia office celebrated its 10th anniversary in May, 2014, with a large public gathering and a private firm event for the firm’s lawyers, both in Bratislava.

   

Andrej Leontiev, Bratislava Managing Partner, Taylor Wessing e|n|w|c Attorneys at Law 

The first event, on Thursday, May 15, was designed for clients, and featured 150 guests and a speech by Slovakian Minister of Finance Ivan Miklos. The next morning some 80 Taylor Wessing e|n|w|c lawyers from across CEE gathered in the Bratislava office for a day of meetings and trainings – which concluded with a large party into the evening.

Taylor Wessing e|n|w|c Bratislava Managing Partner Andrej Leontiev, who opened the office in 2004 with colleague Radovan Pala, notes with pride that it has grown from two lawyers and a secretary into  the 3rd largest international law firm in the country, with a team of 25 employees, including 19 lawyers. In that time he has witnessed Slovakia’s accession to the European Union, the country’s adoption of the Euro, the enactment of “modern” laws and creation of special anti-corruption courts, and the establishment of public registers, all of which the firm claims “have led to a high level of legal security,” in the country, “comparable to that of ‘western’ standards.”

Leontiev is pleased not only by his office’s increased size, but also by its growing reputation – he points to the decision last year by former two-time Slovakian Minister of Justice Lucia Zitnanska to join the team – and brand strength, after the 2013 tie-up with international player Taylor Wessing. Leontiev says, “we were a very strong CEE firm, but to acquire clients from the top segment of American and French and English companies we needed something more. Taylor Wessing has helped us a lot.”

But that goes both ways, and the office now is reported to generate 11% of  total Taylor Wessing CEE revenue. And Leontiev is hardly resting on his laurels. He emphasizes that the office is building an IP/IT department, and he is intent, he says, “on becoming the leading firm for startups in Slovakia.”

In the meantime, he and his colleagues are looking forward to the upcoming celebration of the firm’s 10-year anniversary in Warsaw this fall.

1. State-Owned Enterprises in Austria 

In order to renew its largely destroyed industries after World War II, the Republic of Austria has experienced an extended period of strong governmental intervention, in particular due to nationalization measures of important industry sectors including manufacturing and energy.     

2. OIAG

In 1967 Austria established a state-owned holding company to hold and govern a significant part of Austria’s nationalized post-war industry. This holding company underwent several reforms and restructurings, and is now called Oesterreichische Industrieholding AG (“OIAG“). 

The OIAG focuses on two core functions on the basis of a special act – the OIAG-Act.

Pursuant to this act, the OIAG is primarily an investment management body and administers its Austrian shareholdings. The OIAG has to ensure the maintenance of influence over its SOEs by either holding at least 25% plus one share of the voting share capital in each company (giving OIAG certain statutory approval rights) or by exerting influence on the basis of shareholder agreements. 

• Secondly, the Austrian Federal Government can issue a privatization mandate to OIAG authorizing the OIAG to further privatize the companies it owns. 
• Currently the OIAG holds a minority share in the international oil, gas and energy company OMV (31%) and the telecommunications provider Telekom Austria Group (28%). 
• OIAG also owns 53% of the shares of the postal service provider Oesterreichische Post AG. 
• In terms of recent developments, OIAG just concluded a shareholders agreement with America Movil in order to ensure Austrian interests in Telekom Austria Group for the next 10 years.
• OIAG’s total shareholding portfolio is currently valued at around EUR 5.6 billion.  

At present there are political discussions about either transferring other major SOEs to the OIAG or winding down OIAG and selling off its shareholdings. An amendment of the OIAG-Act could also lead to the OIAG taking on new responsibilities such as the promotion of small and medium-sized businesses. This is ongoing and has not been decided yet by the Austrian Government. 

3. Legal Framework of Privatizations 

Pursuant to the Austrian privatization act (Privatisierungsgesetz), all privatizations of SOEs have to be based on a privatization concept and must be authorized by the Austrian Federal Government. For any privatization of companies currently held by OIAG, the OIAG-Act has also to be taken into consideration. 

Although the OIAG is dependent on a privatization mandate of the Austrian Federal Government, it is free to determine the specific structure of an individual privatization, within the scope the OIAG–Act. Additionally, the OIAG has to consider the interests of the respective company and the Republic of Austria in all privatizations it undertakes.

4. Privatization Waves in Austria 

Austria has a long history of transferring governmental responsibilities to publicly-held companies. For example, Austria’s road pricing and road maintenance is handled by a publicly-held company called ASFINAG. Although not privatization per se, the transfer of governmental responsibilities to publicly-held companies is often an important first step for a subsequent privatization. 

In particular due to Austria joining the EU and in order to increase income for the Austrian budget, there have been several waves of privatization in nearly all kinds of state-owned areas, including telecommunication, the cultural sector, public transport, and the research and development sector. During the last 15 years, OIAG alone handled 24 privatizations, including some major SOEs such as the Austria Tabak cigarette manufacturer, the Dorotheum auction house, the Vienna Airport, and the Oesterreichische Postsparkasse postal bank. This provided total placement and privatization gains of around EUR 6.3 billion, mostly via the Vienna Stock Exchange. 

5. Future Perspectives oF Privatization in Austria

The OIAG currently holds no privatization mandate for a specific SOE. From our point of view, there still is a considerable potential for privatization of SOEs in Austria, including both full privatizations as well as the complete sale of partly privatized/partly state-owned companies. Since the OIAG only holds three major participations, there are two possibilities for its development in the immediate future, both mainly dependent on the outcome of political discussions: Either its role as primary state-owned holding for SOEs will be reinforced and other SOEs such as ASFINAG will be transferred to OIAG, or the concept will be abandoned altogether and the remaining participations will be transferred back to the Republic of Austria. Either path will lead to an interesting future for privatizations in Austria.       

By Rainer Wachter, Partner, and Oliver Werner, Attorney-at-Law, CMS Reich-Rohrwig Hainz

This Article was originally published in Issue 3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

The privatization era in Albania began in 1991, following the adoption of the country’s new Constitution and the “On Sanctioning and Protection of Private Property, Free Initiatives, and Privatization” Law.   

Law no. 7501, “On Land”, dated July 19, 1991, and law no. 8053, “On Transfer Without Compensation of Agricultural Land Ownership”, dated December 21, 1995, stipulated that agricultural fields, which had been previously controlled by collective and state farms, were to be divided into plots and distributed to the collective members and farm employees in a system of family ownership.

Law no. 7652, “On State Housing Privatization”, dated December 23, 1992, required residential properties, including apartments and houses with small land plots, to be transferred into the ownership of their occupants.

Law no. 7698, “On Restitution and Compensation of Properties to Former Owners”, dated April 15, 1993 (which was revised by law no. 9235, “On Restitution and Compensation of Property”, as amended, dated July 29, 1994), enabled families that had owned land and property prior to 1945 to claim restitution of their non-agricultural properties, or alternatively to receive other property or financial compensation.

The following five years saw successive governments engage in a program of accelerated privatization; the process was carried out under the guidance of the World Bank and the International Monetary Fund. During this period, the majority of small-and-medium-sized enterprises in the country were sold, leased, or liquidated. By 1996, much of Albania’s economy had shifted into private hands.

A mass privatization program, enabling citizens to buy equity in public enterprises, also began in 1995. However, this process proved difficult to implement, and it was halted in 1997.

The process suffered from lack of strategy and organization in the liberalization of the market. The lack of capital available, due to an underperforming financial and banking system, also impaired the process.

In April 1998, the government approved the Strategic Sectors Privatization Strategy and began  privatization of strategic sectors, including large, state-owned industries. Law no. 8306, dated  March 14, 1998, provided a privatization strategy for sectors considered to hold significant importance for the country’s economy.

Examples include: telecommunications; posts; mining; oil and gas; forests and waters; airport; insurance companies; and state-owned second tier banks. State enterprises and companies with state-owned capital operating in strategic sectors were, as a result of the law, also open to privatization. In order for a state-owned enterprise to be privatized, a specific law had to be approved by the Albanian parliament. This practice remains in force today.

In the years following law no. 8306, numerous companies operating in strategic sectors were entirely or partially privatized.

The privatization of the energy sector was a special focus in the last decade, and it remains so today. Between 2005 and 2010, the Albanian government unbundled the industry’s transmission and distribution systems, introduced a new power market model, and granted concessions for the development of new hydropower plants to private investors.

The privatization of the Transmission Operator System was followed by the privatization in 2013 of four existing medium-sized hydropower plants on the Mat and Bistrica rivers, which have a combined capacity of 76.7 megawatts. The four plants were privatized through competitive international tenders.

However, the wave of privatization seen in previous years has declined recently as Albania, like many countries, was hit by the global economic crisis. The failed sale of the shares held by the Albanian state in INSIG SHA, the only state-owned insurance company, is a particular example of the effects of the financial crisis. The Albanian parliament authorized sale of the state’s shares in 2006; there were also attempts to offer the shares to strategic investors in the international markets – and later in the domestic market, too. The offering did not attract investors, however, and the company, which has subsidiaries in the Republic of Kosovo and FYROM, continues to be owned entirely by the Albanian state.      

By Genc Boga, Senior Partner, and Sabina Lalaj, Senior Associate, Boga & Associates

This Article was originally published in Issue 3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Belarus is one of those countries where a good part of key industrial assets still belongs to the state. Changes in regulations on privatization introduced within past two years were aimed at making the procedures more flexible and investor-friendly. What are the outcomes?   

Nowadays an interested investor may choose one of the following ways to acquire a stake in a state-owned enterprise.

First, the investor can become a shareholder in an enterprise in the process of being transformed into a joint-stock company. Transformation is required as the legal form of state-owned companies is a unitary enterprise (a rudimentary form from Soviet times) which has no shares to be traded. A prospective investor should wait for contests to be organized by the State Property Committee. From time to time the Committee publishes announcements about certain major enterprises on its official website (www.gki.gov.by). 

Mass transformation of state enterprises has been under way for several years now in accordance with three-year plans approved by the Belarusian President. The current plan for 2014-2016 will most likely include around 40 unitary enterprises.

Second, an investor can participate in a privatization contest or auction at which state-owned shares are offered. The procedures for acquiring shares through contest and auction are very similar. The difference is that in an auction the only criteria for determining the winner is the acquisition price, while in a contest the conditions include certain additional investment commitments to be undertaken by the acquirer.

Third, investors can acquire additionally-issued shares of transformed enterprises, injecting capital in the company and diluting the state as a shareholder. Quite a few potential acquirers are interested in this option as it implies investment straight into the enterprise rather than transferring the purchase price to the Belarus state budget. One should bear in mind, however, that in this case local municipal authorities may have a pre-emptive right to buy additionally-issued shares. 

In early 2012 President Lukashenko cancelled ineffective privatization plans and declared a new privatization strategy which may be summarized as follows: if we have an enterprise and an investor is interested, the deal must be negotiated and closed if the state finds it beneficial.  The new concept caused some confusion among the authorities involved, as well as investors and advisors, so that for about a year and a half no deals took place.

Finally, the legal framework was adjusted, the State Property Committee started to publish lists of potential targets, and the new algorithm to be used by potential investors may now be briefly described as follows:

A prospective acquirer may either find a privatization target on the list published by the State Property Committee or pick a target of its own accord and send an expression of interest to the government, the template for which is available on the State Property Committee website. Additionally, the Committee itself sometimes announces a “study of interest” in a particular enterprise. In these cases, the Committee posts information on the privatization target and sets a deadline for sending expressions of interest.

Upon receiving an expression of interest a special commission within the Committee considers it and sends a draft decision on privatization to the President of Belarus. Upon approval by the President, a privatization contest or auction should be announced. Therefore, by expressing interest, the investor initiates the procedure for selecting the best buyer of the shares, and later finds itself bidding along with other prospective investors. Announcements on contests and auctions are also published in the printed media and on the State Property Committee website.

One should note that there is no specific timeframe for this procedure. Naturally, this causes considerable uncertainty since an investor cannot know for sure when exactly the target will be available for privatization. This in turn may lead to fading of previously expressed interest.

Unlike other economies in the region in their time, Belarus is not likely to commence mass privatization, at least in the near future. However, we may see some transactions completed even in 2014. The year has already marked its first transaction: the sale of 99.5% shares in BELGIPS to Russia’s Volma Corporation. The largest transactions expected to be signed soon are the sale of Mozyr Oil Refinery shares to Russia’s Rosneft and sale of a stake in Grodno-Azot, a large fertilizer producer, the contest for which was announced recently. In addition, in summer 2014 we expect several contests to take place within the framework of the “pilot privatization” program administered by the National Agency of Investment and Privatization under the auspices of the World Bank, covering eight companies from various sectors (e.g., food & drink, road construction, production of medical devices).      

By Maksim Salahub, Partner, and Nadezhda Fomenok, Legal Assistant, Sorainen

This Article was originally published in Issue 3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.