This is not Goodbye: Lessons from the Departure of Foreign Law Firms from the Russian Market

The freedom that foreign law firms had in their operations in Russia led to the Russian economy’s unacceptable dependence on foreign law, foreign dispute resolution institutions, and Western consultants. The resulting political, legal, and economic risks fully materialized. The departure of foreign law firms from Russia was accompanied by the outflow of Russian personnel abroad and led to the offshorization of legal aid as it pertains to Russian law. The negative ramifications included the failure to comply with Russian regulatory requirements, the erosion of the Russian tax base, ‘jurisdictional losses’, and a violation of the principles of fair competition. At present, the situation (the politically motivated withdrawal of foreign law firms and the establishment of new Russian law firms based on the team members who are left) is conducive to reforms on the legal services market. This is also crucial in terms of avoiding any future negative scenarios that unfriendly countries have recently been pursuing. The tasks and principles of interaction with foreign consultants need to be reconsidered in a short time. The legal sector needs to be brought back from offshore jurisdictions and made sovereign to support the Russian economy, with the creation of an independent infrastructural basis. Among other things, it is crucial to ensure that new Russian law firms are actually independent from their former foreign owners and employers.