This year Andrey Gorodissky & Partners, one of Russia’s oldest law firms, celebrates 30 years. The Kommersant interviewed the key figures of the firm: its founder Andrey Gorodissky, its partner and head of Corporate and M&As Alexey Gorodissky and its managing partner Dmitri Lubomudrov. They told us about the importance of tradition, the firm’s life hacks that enable it to be afloat for long and successfully on the legal services market and avoid monotony and burnout, and the main resource of the firm.
Andrey, when creating the firm thirty years ago, did you feel you were making a leap in the dark? After the USSR collapsed, the legal profession was not offered any clear ways of development.
ANDREY GORODISSKY:
There was nothing at all at that time. Before founding my own firm, I had had 15 years of serving for government agencies (from 1978 to 1992: first as legal counsel for Soyuznefteexport, then for the USSR trade mission in West Berlin, later as chief expert of the Contract Management Department, and as the USSR representative at sessions of UNCITRAL in the USSR Ministry of External Economic Relations – reported by The Kommersant), moreover, I was raised up as a government servant both due to the family tradition and the general situation in the country. After the collapse of the USSR I virtually found myself in the street and had to decide what to do further. At that time, plenty endeavors were being made to create one’s own private business, many of my friends and fellows were making their careers ‘on the free bread’, and this aura certainly impacted me. However, it took me substantial efforts to change my mentality.
I could not afford doing something of which I had no good knowledge, and my profession was the only thing which I knew. Before the collapse of the USSR, the State had been my one and only client; the new era offered prospects of a great increase in clientele and, consequently, earnings. So, my business partner and I decided to try our luck.
At the start we did not even have an office and my Zhiguli car was used instead. The first three months of our work brought us some money which was sufficient for renovation of several levels in the dilapidated building in Vesnina street, now Denezhny lane. We opened an office there, registered our firm and began to believe that our business may be successful.
Still, none of us had confidence in tomorrow, and this is by no means an empty phrase. However the continuous performance results of our law firm gave us hope that we were on the right track.
On which areas of law did you focus early in your firm’s life?
ANDREY GORODISSKY:
In the beginning we took on everything. However gradually (although quite fast, a half year after our start) we developed our specialization in certain areas, mostly based on my previous experience. We became those who are now called corporate lawyers and in a while our firm came to practice also intellectual property law relating to trademarks.
Interestingly, at that stage our small company landed in the sector where biggest international law firms worked. Having spent a lifetime working in international trade, I had a good knowledge of sector-specific laws of many leading countries, was fairly familiar with how to make international contracts and understood how to work with investors who first came to such country as Russia, especially in the early 1990s. My knowledge of professional language was also much of a help. To foreign companies starting their operations in the Russian Federation, everything was new and they appreciated very much lawyers who were really able to help them at the start stage of their business. We were doing well in that area and quickly achieved high results. By 2000, 70% of our services were provided to foreign investors, including biggest global transnational corporations. Today we have a 20-25 year track record of cooperation with many of them, as a result of our painstaking large-scale work.
Around 2003 we observed an interesting trend: the number of our foreign clients did not reduce – it still exceeded in figures the number of requests from Russian clients – however, in terms of the complexity of matters, scope of work and, most interestingly, amounts of revenues, Russian companies’ requests began outstripping requests from foreigners. Partly this was due to the fact that our foreign clients already settled in Russia, established their own legal departments and a fair amount of routine work which had been done by us previously was taken on by in-house lawyers. Furthermore, by that time Russian businesses too had become full-fledged: the country then had strong big businesses, including integrated sector-specific holding companies with serious capital and taste for investment. They were developing, purchasing desired assets and selling undesired assets and started expansion abroad, and our billing showed us to what extent our Russian clientele prevails over the foreign one.
Did you need to adjust your focus areas?
ANDREY GORODISSKY:
We did, although it was not easy to refocus: we still positioned ourselves as a firm working for foreign investors, although a huge amount of tasks was done for our Russian clientele, which served as a serious platform for our firm’s development and the growth of our competencies.
And then the finance market began running high! For us at least. We were involved in preparing big Russian companies for entering finance markets and acted as special counsel for underwriters in high-profile IPOs. Moreover, the only one IPO in Hong Kong at that time also required our involvement. The firm’s role was that of special Russian law counsel issuing a legal opinion, on the basis of which money was released under the extremely nerve-strain circumstances on the last day and even at the last hour of the IPO. It is customary that almost none of IPOs is prepared without rough edges. If part of documents required has not been provided, the lawyer may not formally sign his legal opinion, unless he is prepared for going bankrupt or to jail. Such unnerving situations were systematic with IPOs, although this was an exciting period in our work and we appreciated it very much.
It was most interesting to prepare IPOs of Russian biggest industrial companies. Everything relating to corporate relations, capital structuring and offshore entities of Russian companies was developing under peculiar conditions, as the main task for them was to build business. They did not however always meet the high standards set by Western banks, exchanges and investors for IPOs and therefore the IPO preparation required intense work with substantial involvement of our firm and an army of foreign lawyers. That work greatly enriched us, allowed us to move forward and invest in the firm’s development.
Wasn’t such concentration on a single area detrimental to the firm’s other areas of practice?
ANDREY GORODISSKY:
At some point, yes. Our zeal for fulfilling enormous amounts of work on the 24/7 basis for many years had obviously left us with no strength to think over further development of other areas of practice. At a certain point we conceived that we were missing the litigation sector; of course, we were handling court cases, but we were not known as litigators in the market. The situation had to be rectified, especially so that the accent had to be made then on providing our services to the prevailing Russian clientele. Gradually (legal business is generally not apt for quick changes), our litigation practice reached a good level, and we are going to continue its improvement.
An important part of the firm’s history is the development of our IP practice, which was concise in terms of the volumes of work, billing and revenues, but always showed high quality results of its services. For several years in a row our IP specialists were ranked by IP Stars, which means a high professional rank. In 2016 we strengthened our IP team by merging the patent attorneys of Popelensky Patent and Trademark Attorneys. Our IP team is growing as new specialists join us. We are very satisfied with both professionals and revenues of this sector of our practice.
ALEXEY GORODISSKY:
Yes, our IP practice is stable even during these hard times. For a long time Russian businesses have expressed their wish to commercialize their intellectual property, but have moved very slowly in that direction until recently. During the 3rd quarter of 2022 the intensity of IP requests from big Russian businesses has substantially increased.
For instance, recently a major client, whose name I cannot disclose for obvious reasons, has requested us to develop an IP commercialization strategy, which is a capacious task for both the client and its counsel, and now we are doing preparatory work in that respect.
Generally, we are doing just a minimum of simple work and we are not handling routine tasks, just because clients who go to us are not commonplace clients. In short words, an AGP client is highly professional and competent in its/his business, which sets the tone for our work as well, because your client is as good as you. It’s like in tennis: If you play with a strong partner, you grow and strive for overcoming his level.
DMITRI LUBOMUDROV:
Most of our clients are big corporate businesses, now mostly Russian ones. The other portion of our clientele is private Russian clients holding property in Russia and abroad, who during these disturbing times seek our advice for preserving and consolidation of their assets.
What else, apart from your client’s level, does allow you to play for a long time in the legal services field? What is your main resource?
DMITRI LUBOMUDROV:
The firm’s main resource is our reputation, which we put first and are determined to maintain this commitment. Our firm has always functioned independently, with no connections for obtaining any additional, out-of-competition income. We have always worked in a competitive environment, and it is our good reputation which has helped us to win. It is our driver, basis, growth engine and umbrella dome.
Can you say that the Andrey Gorodissky & Partners brand has its own philosophy? What are most critical components that determine the essence of the firm?
ANDREY GORODISSKY:
In my view, the firm’s philosophy is absolutely pragmatic, viable and quite logical. We assume that the only most efficient mechanism for creating and developing private practice of independent counsel, such as AGP, who is not linked to any financial and industrial groups and have no administrative resources, is maintenance of a very high level of professional reputation, as my colleagues have already said.
DMITRI LUBOMUDROV:
Moreover, we assume that an AGP lawyer should be a proper intellectual who is able to treat the client’s matters on a ‘doctor/patient relationship’ basis: this includes not only highly professional fulfillment of the client’s requests, but also taking reasonable care for the client’s affairs. Due to this, we sometimes have to do excessive work and spend more of our time (which is not always billable). Still it is necessary to do, and our clients appreciate very much our warm and attentive attitude, so our business relations with them become stronger.
Over 30 years in the Russian market, AGP has gained a unique experience working in many areas of law, built a distinguished team and obtained most valued clients. Such well-organized live system as the firm is unthinkable without a good manager. Tell us please about Andrey’s personal qualities.
DMITRI LUBOMUDROV:
I landed in the firm when being a raw intern in the early 1990s, and my deepest impression was that of the professional level of the firm and, first of all, Andrey personally. After working with the firm for some time, I could assess his personal qualities too, most of all, that he was a deeply decent man with respect to all those around him: both clients and any firm member, from a lawyer to a cleaning lady.
Moreover, Andrey is a very enthusiastic and dedicated person, both professionally and with respect to his hobbies, including travelling, diving and underwater photography. He has been all around the world, and there seems to be no sea creature that has escaped his photography.
One cannot but recognize that the paradigm of our firm’s 30 year existence is entirely the merit of our founding father. Now that he has stepped aside from daily managerial activities, the professional, ethical and humane approach set by him remains the same and we are going to maintain it forever.
Andrey, why did you decide to resign as the managing partner last year? What is your today’s role?
ANDREY GORODISSKY:
For many years the firm has maintained a voluminous detailed partnership agreement which, apart from a lot of other rules, regulates the management of our practice too. The agreement sets the age limit for the managing partner, which is 60 years of age or 65 years of ages under certain circumstances. So, I had to resign anyway, even though for formal reasons. However, the main reason was not that, it was the conceptual approach: since AGP is not a business of a sole businessman or even of a group of owners, it has been assumed that partners can change and the managing partner should, with a lapse of a certain time, resign from its office and pass on his powers to another member of the Board of Partners. The team needs fresh blood and new people with up-to-date views of the firm’s management and development of our practice, so that the firm remains an LP.
I had been aware that I would have to resign from my position in 2021, so two years before I started seriously familiarizing the partners and all the Board members with all details of finance and economic routine of the firm’s management, providing them information related to managerial issues and involving them in decision making. For the last two years, all the firm’s decisions have been taken collectively by a unanimous consent, and none of them had to be taken by a majority vote. My resignation was practically imperceptible to the firm, as the management authority passed smoothly and naturally from one hand to another and by that time my colleagues were prepared to manage the firm under any circumstances.
Now, I am not participating, as a matter of principle, in decision-making on any managerial issues, although I am always fully aware about everything in the firm, as I am a member of the Board and, as such, receive all relevant updates. My today’s mission is to help my colleagues only at their request and only where my help is needed. Until now, I have never had to interfere in their decision making process on the Board level or otherwise. Management of the firm is carried on in a reasonable and highly competent manner, and I am very satisfied with the current state of affairs. This is an excellent result and I am glad I was able to achieve it.
After Andrey Gorodissky resigned as the firm’s managing partner, Dmitri Lubomudrov has replaced him. Dmitri, what was it like to assume the governance?
DMITRI LUBOMUDROV:
Frankly speaking, the proposal to take on this position came as a surprise to me and I am very grateful to my colleagues for their confidence in me.
The firm has always followed the principle of collective decision making by the Board of Partners, whose status was formally established by us in 2014. Six members of the Board bear managerial and financial responsibility for everything that happens in the company. Thanks to such approach, I am able at any time to consult with my colleagues who may adjust my decision or come forward with an initiative. A number of most important decisions, including personnel related ones, are taken by us collectively.
The law firm with a long tradition, in the best sense of the word.
DMITRI LUBOMUDROV:
Thank you. In decision making we are quite conservative, indeed, and try to avoid doing anything on a rush basis, even interviews with job applicants are conducted in several stages, which allows all the Board members to take a look at the candidate, as psychological compatibility of a newcomer with the team is very important to us.
ALEXEY GORODISSKY:
As well as the actual, not just formal equality among our partners. The firm’s Board includes four men and two women. We are among a few Russian law firms with female equity partners. This membership, having a vast aggregate life experience, is an efficient ‘sieve’ for assessing not only the applied knowledge and experience of the applicant, but also his/her personal qualities, and whether he/she can be part of our monolithic team. In terms of time, the method is rather time consuming, but it works great.
DMITRI LUBOMUDROV:
Anyway, the staff rotation with us is minimal.
And probably AGP is a unique firm with the continuity of generations in the proper sense of the word. Alexey, you like your father choose law as a profession. Was your taking this path your conscious choice or was that your destiny?
ALEXEY GORODISSKY:
Rather, it was a natural development. A year before my high school graduation, I thought about what university to choose. Economic studies was the most demanded specialty at that time and everyone seemed to wish to be an economist, and lawyers were always just ‘silver medalists’ in that profession race. When I was in high school, I thought I’d enroll in the Plekhanov Russian Economic University, but I realized in time that my inclination to human sciences would not leave me a single chance to study there. Thereafter I was preparing myself for going on to a law school.
And how did you come to work with the firm?
ALEXEY GORODISSKY:
It also happened by natural coincidence. Like many of 3rd-4th year students of law schools, by the time of landing in the firm I had completed an internship at other firms, for instance at the Moscow office of an US company which has unfortunately left Russia. As for the firm, blatantly, I had always had an opportunity, by virtue of kinship, to practice my skills at the firm at any time. In 2002 I came here as an intern. That time the finance market was developing and the firm started handling the Eurobond matters which required a lot of lawyers to shovel mountains of documents. From the internship prospective, the situation was ideal: I was assigned to an all night and day team of lawyers and I straightaway plunged headlong into work. The matters were exactly as described by Andrey above, and if you start working at high complexity level of tasks your temporary internship will quickly turns into permanent work. In September 2003, after passing my final exams, I was formally hired by the firm for the position of lawyer, and, as you can see, I am still here since 20 years ago.
And did you happen to fill the bumps early in your carrier?
ALEXEY GORODISSKY:
Of course. Difficult clients happened, as well as invaluable experience. During the middle of 2000s, in 2005, I had a client for whom I, a very young lawyer then, had to work practically 90% of my time. The amount of tasks required that for two and a half years I worked 12-14 hours a day without affording myself any days off or public holidays. The client was a small cog in an big business, which at that time was at the top of grandeur and its key man was well received in high offices and often appeared on the front pages of papers. The client was a morning person who loved setting tasks at 9 p.m. and demanding their fulfillment at 8 a.m. next day, as he got up at 5 a.m. The phrase “I need this yesterday” was typical for his style of work. At some point I just stopped asking him about deadlines because I knew the answer in advance. Projects were super confidential and very complicated in commercial terms, a minimum of information was discussed over the telephone, and that using code words. Essential issues were handled exclusively during our face-to-face meetings, and I had to come to the client’s office two or three times a day. Sometimes I thought he was making fun of me.
But one day the client’s company came into a serious corporate conflict with another big business, and I as legal advisor was involved in its resolution to a certain extent. And when the degree of tension in the conflict reached its peak, the phone rang and hat was the client. He told me: “Alex, if you and ‘Ilyusha’ (that was a code word for one of our foreign advisors) fail to find a solution to this issue by morning, you will be our debtors.” And then he named the amount, an astronomical one for all times.
In the morning I had a man-to-man talk with the client. It was 2006 and I had worked just for three years after my graduation from the law school. With no prior notice I came to his office to sort things out and I understood with what person I was talking. We set the record straight, he said he was sorry for his breakdown last night, anyway ‘Ilyusha’ and I found a solution to the problem. And we even continued working with that client for some time. Now I remember the events of those days with a smile on my face, as everything I learnt during those 2.5 years, from hard working to ability to cope with stress, can hardly be learnt by everyone even for ten years. I think that all partners of Russian law firms had to pass through something like that, otherwise they would not have become partners.
Twenty years is a long period. After the years, do you still enjoy your work?
ALEXEY GORODISSKY:
Of course, over 20 years different things have come to my mind, from the recurring impulse to open an office in St. Petersburg to the idea of downshifting...
DMITRI LUBOMUDROV:
You may plant strawberries when you get old and retire.
ALEXEY GORODISSKY:
Here you are (laughing). You can be a successful young lawyer as much as you please in the Russian or international consultancy sector, but sooner or later you start feeling drained or burnout, which has become a buzzword. This fatigue was quickly removed by a vacation spent in a beautiful place, which worked like a balm, but still I had sometimes an emotional impulse to change my profession. Once Andrey told me: “Alexey, you have no moral obligations toward the company. If you make a decision to leave, it will be your choice and your right.” I decided to stay with the firm. After twenty years, the question of whether to stay or not does not even arise.
Based on the foregoing, AGP has a good potential for growth and development for another 30 years. But the trend is obvious – more and more younger professionals come as fresh blood. Tell us please what should be a newcomer lawyer to become a member of AGP?
ALEXEY GORODISSKY:
Certainly, we are increasingly hiring young professionals, and to some of them even I seem to be a patriarch and veteran. As for professional qualities which are expected by us from the new generation, I strongly believe that young lawyers of any consulting firm should not only have an excellent professional education, good hard skills and broad knowledge of law, but they should also have deep knowledge of the specific areas of law which they practice now or are going to practice in the future.