30 May 2022, 17:07

"In today's world, human capital is the most valuable resource"

Tetyana Gavrysh
Tetyana Gavrysh «ILF, ЮФ» managing partner

The biggest challenges that legal business is facing right now are closely tied to the challenges our country is facing - to win, to preserve our human capital and not to miss our chance to become a real startup state in the new world. We discussed the outbreak of the war, company reorganization, customer relations, Ukraine's post-war restoration, and the prospects of lawsuits against Russia with Tetyana Gavrysh, lawyer and managing partner of the ILF law firm.

Маєте Телеграм? Два кліки - і ви не пропустите жодної важливої юридичної новини. Нічого зайвого, лише #самасуть. З турботою про ваш час!


— Miss Tetyana, what challenges is legal business facing today?

— War ... vile, destructive, unjust, irrational, unpredictable ... Even though we're assured of Ukraine's victory, it's a road full of blood and uncertainty. The exodus of human capital - more than 6 million people have left Ukraine in two months. Most of those are women and children. Many of these women have a good education and high social standing; they were part of the creative class and were generating social value and contributing to the GDP. There are lawyers among them, partners at law firms, business owners. It's a huge loss for the country, but it will become catastrophic if they settle down in the countries where they have found refuge, and if they convince their husbands, business partners, brothers and children to do the same. We will end up losing a lot more than what we are losing now, with the destruction of our infrastructure.

In today's world, human capital is the most valuable resource. Not just in humanitarian terms, but also in a pragmatic sense. Normally, the statistics give six months before people put down roots. We Ukrainians are used to taking care of ourselves and our own, we are quick learners and honest and hard workers, we are creative and determined. In short, we're awesome. History shows, we can build our home with a picket fence anywhere, even on Mars. So over those six months, the most active, talented and motivated among the displaced will be seriously considering whether they should return, given the prospects for themselves and their children where they are now. Now add to that the people-centric European cities and towns (so comfortable to live in and go on walks, with efficient and affordable public transportation), education for their children which is orders of magnitude better than ours (and often free), quality healthcare, better security (NATO protection in most countries that took in our people).

So the biggest challenge, as I see it, is this: as a post-Soviet state where a person was always ideologically seen as an object rather than a subject, we must first acknowledge it, and then quickly change in terms of our values and start rebuilding our policies, taking into account the value of the human capital for our country. We need justice, a transparent and efficient judicial system, professional, competent and sensible law enforcement, effective anti-corruption mechanisms, a radical reform of education, accessible and high-quality healthcare; we need to rebuild our cities, not "nice and fast," but with a total rejection of  Soviet urban planning standards and a complete transition to best European practices.

— You've heard this in some narrative?

—Such discussions are taking place among expert circles, in civil society. At the state level, the debate is about raising taxes, nationalization and other ideas involving state intervention in the economy. There's a lot of talk about millions or "astronomical billions" for rebuilding which someone's already allocating as we speak; we hear statements that "star architects" will rebuild everything "in record time." There's nothing here about people and their needs. And those needs are many, and they are not limited to having a roof over your head. People need a better standard of living in their country and respect for their sense of dignity. I think these needs will soon be felt most acutely.

We must realize that through the pain, loss and blood that are going to be in our DNA for generations, we have a chance to become a nation. We need to rewire ourselves away from thinking of ourselves as successors of the Ukrainian SSR, and realize that we are also descendants of the Ukrainian People's Republic, to give an example. We need to create a nation of heroes, to strive for leadership in the world, to revitalize it and help change it for the better. We have our incredible army, amazing career diplomats, our extraordinary people. Alas, we also inherited a weak state with old diseases, but this is the time for recovery. Not to miss our chance - that's our second challenge.

— And what are your personal challenges right now?

 — We have been the leading and largest law firm in east Ukraine for almost 30 years. Our Kharkiv office served as a hub for many new projects. For instance, it was the cradle of the Kharkiv IT Cluster - we weren't simply helping with the founding documents but also provided the venue for the founding meeting. It's also where the Agrofoodcluster was born 3 years ago. Here, the healthcare reform began, when the Kharkiv expert group on healthcare reform was formed; two weeks before the war, the bill "On Medical Practice and Medical Self-Governance" was finished. By the way, the Kharkiv branch of the Ukrainian Bar Association (the first one in Ukraine) was also born here.

 In the early days of the war, the building where our Kharkiv office is located was seriously damaged by shelling, but we intend to rebuild it. The biggest question for me right now is one of perspective: what meaning to fill that place with?

— How did the full-scale war affect your company?

— We needed time to escape the attacks and find a safe place for our families. We never stopped advising our clients whenever they needed it, never denied anyone. However, most of our clients were in the same situation: they were trying to save what equipment they could, relocating offices and factories, taking their families somewhere safe. We count a lot of hospitals in various regions of Ukraine as our clients and friends. After February 24, we started taking requests for generators, candles, blankets, insulin, baby food, tactical medicine supplies and surgical equipment. We turned to our friends among German business for help, and they created a whole system for fundraising and acquisitions, engaged a logistics company and the Brandenburg University hospital for professional advice and assistance, and in three weeks we received 40 tons of products of fantastic quality.

In the first days of the war, I was bombarded with requests from hospitals for medicines that international evidence-based medicine has never heard of, or has already forgotten about. Our German colleagues painstakingly translated and analyzed these lists and sent us the very best. Why am I telling you this? Exactly one year ago, in the spring of 2021, I visited every territorial community in Kharkiv Oblast on an advocacy mission commissioned by the EU project "Primary Healthcare in Communities," and a year later, during another rainy spring, with our assistance, the very same hospitals are getting humanitarian supplies under enemy shelling. It breaks my heart just thinking about it, and also because of the fact that, as a result of poor government decisions, hospitals found themselves with almost no supplies when the war came. I'm talking here, among other things, about attempts by the government to curtail the autonomy of non-profit medical enterprises. For instance, before the war, changes were introduced to legislation which set the base salary to 13,500 UAH for nursing staff and to 20,000 UAH for doctors. However, the government didn't consider whether an enterprise is financially capable of paying this salary. Some hospitals were forced to dip into their cash reserves or even take loans. But I hope it will at least serve as a lesson for the future and will make future policy decisions on such sensitive issues better thought out.

— When were you able to get back to work?

— We were able to resume working more or less normally about three weeks after the war began. It was a very difficult moment for me, seeing on Zoom the faces of people I know, one whose mother and father remained in the occupied territory, one couldn't get in touch with loved ones for four days straight, another whose home in Saltovka was destroyed, yet another with no internet in the bomb shelter … And me having to tell them what comes next. If this is going to take a while, how are we going to live, will there even be a tomorrow? I could hardly breathe. This may sound overly sentimental, but we have wonderful people at ILF. We agreed on new rules and that the most important thing for us is the people, checked whether any of our clients had ties to the aggressor state, and, little by little, went back to work. We decided on the roles, determined our priorities, and now we support each other and meet twice a week to adjust current plans.

— Is the legal market and business changed forever now because of the war?

 — To be clear: the Ukrainian legal market. And a phantom legal market at that, because we, no offense, had no objective idea of ​​what a proper one actually looks like. It was an extension of the state oligarchy system, which is only natural. As for what it will be after the war, it largely depends on whether society and the state are going to change. If the state doesn't reform the judiciary and fails to ensure justice, if it's just going to focus on dividing restoration funds through some opaque schemes, then the legal market will adapt and act accordingly. But if the public succeeds in making its need for justice known, and if our international partners manage to convince the Ukrainian government to create strong institutions and make sure that everybody plays by the rules, this will result in a favorable environment for fair competition, for the growth of small and medium business, and for attracting investors. Then Ukraine's legal market will have a completely different design, and it's going to need a new breed of lawyers, with a different outlook. This, in turn, will result in a new approach to higher legal education.

These days we're very actively supporting the Ukrainian Catholic University Law School - the best, in my humble opinion, law school in Ukraine, the only one that exists without any state support, and which is almost as good Oxford and strives to turn its students into free lawyers, which is rare for law schools in post-Soviet countries.

— Companies are going back to the hybrid work format. Is the market no longer satisfied with the pure online format? What are the pros and cons of working remotely?

—  The market not satisfied - who exactly? We are quite satisfied. We switched to a hybrid format even before the pandemic. We were offering remote work to our employees as an advantage. In the end, many years of efforts setting up an effective digitalized process management system yielded tangible benefits. During the pandemic, we were learning, and learning some more, and we more or less adapted. Both amongst ourselves and with our clients. But there is a "but," of course: at least 30% of the creative potential gets lost in remote communication. It's a huge minus. Right now I really want to hug everyone, just can't help it. Unlike most of my peers, I had and still have this opportunity, so I spend a lot of time meeting with some clients and partners. In our case, returning to offline work is still way too dangerous - neither of our offices (in Kharkiv and Kyiv) is entirely safe yet. Which is why we're honing our communication skills by talking in 10 chats at once across several platforms, whichever the client prefers, and we believe it's good for the brain.

— What are you doing for your clients these days?

— We advise on labor law issues, given that labor legislation tends to change rapidly in wartime. We continue working closely with medical institutions, arranging online events for them to clarify certain practical legal issues frequently encountered by hospital administrators and personnel. Also, since the war began, we have continued helping businesses that suffered losses and damage as a result of Russia's full-scale invasion.

— Have their needs changed because of the war?

— We get asked for advice all the time, including in regards to business relocation and failure to fulfill contractual obligations during a war. Another relevant issue for our clients concerns recording damages caused by hostilities. Although the compensation mechanism for this is still under development, we're advising our clients 24/7 on what documents they should collect and keep to get the desired amount of compensation in the future. We also help out with paperwork. Despite the difficulties the judicial system is experiencing, we continue working court cases, protecting our clients' assets and property.

— What do your relations with the clients look like in these difficult times?

— In addition to legal assistance, we help out any way we can: sending our love, calling people, asking how they are, getting medicines and blankets for them, sometimes doing logistics, giving out advice, looking for anything that needs finding, keeping our eyes open, stopping people from making rash decisions, helping to find donors or partners, assuring people that dawn is coming, that there will be a tomorrow, where anything is possible; we find proof of this even when we ourselves lose hope (which also happens), we follow updates from the Pentagon's spokesperson, the British intelligence, and the General Staff, and we believe in our Victory.

— What are your ways of helping people and businesses to uphold their property rights? Please share some of your expertise.

 — We are learning a lot right now. We study the economics of war, closely monitor the policies of international financial institutions, study the postwar business restoration experience of other countries, as well as the case law of the European Court of Human Rights, particularly the cases where individuals defend their property rights violated by war. We try, very carefully, to model possible future scenarios. We tell our clients to at least do the bare minimum of what's necessary, such as recording their losses properly and thoroughly, and we help them with this if necessary.

— By the estimates of the Ministry of Economy and the KSE, the war has cost Ukraine's economy $600 billion. What is your vision for Ukraine's recovery? What do you plan on doing to make it happen?

 — Currently we're on at least two policy teams. Both have to do with rebuilding  territories and infrastructure while taking into account the new challenges and needs. There will be two types of territorial communities in Ukraine for a while: those affected by the hostilities and those that have taken in internally displaced Ukrainians, whose number could reach 10 million. The former are dealing with completely destroyed critical infrastructure, massive outflow of people, and the absence of the usual source for replenishing local budgets - taxes from business. These communities need to look for incentives to get business to return, they need time and resources to recover. Moreover, people in these communities will have limited freedom of movement for a long time because of mined areas, destroyed bridges and roads. Meanwhile, the "rear" communities have grown by 50%, for which their infrastructure was unprepared. But before they can consider new strategies, they need to know how many people will stay, how many will return, and how many will keep going. And remember, we need to bring back the majority of those who left and motivate those who are still here to stay. That's why we need to build Europe here, change existing practices for the better, including  at the legislative level. Our company has now been partially transformed into a lab for legislative research; we work with many local and international experts, and it motivates us a lot

— Do you think applications to international institutions (such as the European Court of Human Rights) to collect damages from Russia can succeed? How feasible is it to get compensation for damage caused by the aggressor state in a Ukrainian court?

 — This sounds to me a lot like, "Do you believe there's water on Mars?" Yes, objective data shows that there likely is or was, in some form, and we're going to colonize it sooner or later. Is 100 years sooner or later? Well, alright, not 100 but 30. I'm absolutely convinced that such lawsuits are necessary, both from the state and from businesses directly. It would also be preferable if we had a balanced and consolidated position on strategy, because back in 2014 we didn't, which greatly hindered the protection of property rights from losses suffered in Crimea and the occupied parts of Donbas. But these are going to be long proceedings with difficult and currently controversial prospects in terms of judgment execution. However, it's a very important political and strategic step that should help set new precedents and document new facts. In the end, I have no doubt, it'll help the government to build effective policies for seeking out  resources for recovery, and business will get an additional basis for attracting donors, investment and soft loans.

As for seeking compensation for damage caused by the terrorist state in Ukrainian courts, we can already see positive changes in judicial practice in this regard. For instance, recently the Supreme Court issued a new legal position, which greenlighted lawsuits by Ukrainians against Russia. This used to be impossible, since the courts considered that Russia had judicial immunity and thus could not be a respondent in a Ukrainian court. Now those who lost their property and homes because of the war, who suffered moral harm losing family and loved ones, have hope that Russia will pay for everything it's done. I think the priority right now should be to create an effective mechanism (procedure) for ensuring the implementation of judgments in cases in which Russia is the respondent.

— What is your law firm's primary mission today?

— We clarify cases.

— What are your plans for the future? What's most important to you?

— Right now my wish is for all those close to me to be alive and safe. And then I would like to go traveling, just to see how beautiful this world is, and that it's still full of quiet dawns that bring hope.


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