Law firm DLA Piper to exit Russia as industry split deepens

Fatima Fokina

DLA Piper, a UK law firm with a big operation in Russia, plans to quit the country, deepening an industry split between those joining the wider corporate exodus and others staying to advise clients amid the economic crisis engulfing the nation.

DLA Piper, one of the world’s highest-grossing law firms, intends to transfer its Russian business, which has roughly 200 staff and offices in Moscow and St Petersburg, into the hands of its local partners to create an independent group with no ties to its former parent, said two people familiar with the matter.

“In light of Russia’s actions in Ukraine and the resulting humanitarian crisis, and our consequent decision not to act for clients connected to the Russian state, we have concluded that maintaining a presence in Russia is not aligned with our values and therefore no longer viable,” DLA Piper said in a statement.

It is not the only big corporate law firm planning to exit Russia. New York-based Skadden Arps Slate Meagher & Flom, which previously advised billionaire Roman Abramovich, is also winding down its Russia office, said a person familiar with the matter. It will retain a small number of support staff on the ground to facilitate that exit.

Since Russia’s President Vladimir Putin ordered troops into Ukraine last month, hundreds of western companies have either announced plans to leave or suspended their operations as outrage over the invasion grows. Multinationals providing essential goods such as food are among only a handful of groups to publicly declare their intention to stay.

In a sign of the rapidly-evolving situation, Dentons, one of the world’s largest law firms, on Monday said it was separating from its Moscow and St Petersburg offices, in a break with its previous position.

Dentons had initially intended to remain in Moscow. The group, which has about 250 staff there and whose clients have previously included state energy group Gazprom, has been concerned about the risk of reprisals against its workforce if it pulls out abruptly, according to people familiar with the matter.

Alexei Zakharko, the managing partner of Dentons AB in Russia, on Monday said the team would “continue to operate as an independent law firm”.

Chief executive Elliott Portnoy said: “Our hope is that at a future time we will be able to come back together when it is lawfully and practically possible to do so.”

Among the top corporate law firms with operations in Russia, a minority have decided to stay to advise clients on their own exit strategies from a country that faces a wave of sanctions and the prospect of a severe recession.

Baker McKenzie, a Chicago firm that has advised Russia’s finance ministry on bond offerings, is also remaining in the country for now but is keeping its office under review. Dentons and Baker McKenzie have said they will not act for groups with any ties to Moscow.

However, the decision by some firms to stay to advise companies on leaving Russia was questioned by the head of one large UK-based group that was winding down its operations in the country.

“We are advising very large multinational companies on exiting Moscow and while some of that is being done in Moscow for now, some is being done in the UK, or Germany,” he said. “You’ve got to stand up for what you believe is right.”

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