As practice shows, law firms that are working with the IT business as well as IT business itself, are the least vulnerable to crises and economic downturns. How the law firm Stron Legal Services is going through the war, how it organizes work with clients, communicates within the team and what its views are on the development (or decline?) of the legal business – we asked its managing partner Oleg Derlyuk.
- Glory to Ukraine! Oleg, how are you today? How is your company and team?
- Glory to heroes! Thank you for the question, nice to hear from you. We are fine, we are safe, and our families are safe. We help, as much as we can, to solve our common problem, during our disaster.
“Thanks” to Covid, we have learned long ago how to work remotely. We did not have any procedural difficulties during the transition to martial law. The technology has already been set up, it worked, and operationally it was not difficult for us. We managed to save all business processes and completely keep the team. One person quit, but not for war-related reasons - just a professional burnout. So, everything is fine.
Our clients are foreigners, they work in foreign markets, in Ukraine they have only staff, an IT team, so the business was not affected either. That is, nothing has changed significantly for our clients, and accordingly, nothing has changed for us. Of course, clients are very concerned about our fate, because a large number of business processes need our attention, because if the legal part of the business disappears, then with it, unfortunately, the business will disappear, because to some extent we are part of our clients’ business. However, everything is fine, we stayed in Ukraine (mostly in the Western Ukraine), everyone is safe, and many employees went abroad. We have plans to open an office abroad. The question of the country is open; we are considering Poland and Cyprus. This will be an operating office for employees who have gone abroad. We are currently helping them financially with housing by distributing the funds we used to pay for renting an office.
We do not need an office to consult clients or meet with them there - we do not have such necessity. We need a place to meet, let`s say so, to speak, to “hang out” at this difficult time.
Since the main problem of remote work is the limited possibilities of team building, relationships in it, and this affects its effectiveness. In any case, people need to see each other, have live interaction, exchange emotionally, because without this you cannot build a real team. This is a proven practice of successful American companies with their exercises on trust in team and so on. In fact, this format of interaction is extremely important, so we will probably lean towards the option of a large house in Cyprus, where there will be rooms for work and a common area, and everyone will have their own room to work separately.
- What has the war changed in your life?
- I don’t think I can say anything new here - everyone knows and understands everything. Maybe I have received some clarification for myself, because war always shows who is who, in everything: in relationships with partners, employees, clients, suppliers. There were pleasant surprises from clients, we felt their support. In the West, people are more sensitive, very emotional and they are really impressed by the events in our country.
At the beginning of the war, we sent information to all our providers (external partners) about what is happening here, about our common tragedy, and provided links to the National Bank of Ukraine, pages where you can send help, make donations. And this challenge worked, there were positive feedbacks, many foreigners responded, including from Hong Kong, Panama, not only from European countries.
- How is the team work organized from the inside?
- We have had significant changes in the company since December 2021: we changed the office, began to build an administrative vertical within the company, feeling that we should strengthen coordination. It is clear that the more people in the company, the more processes, the more their regulation and control is necessary.
We use a work administration program. But here it is necessary to understand one thing. The product we provide to the client is not purely legal, i.e. not quite standard. We have companies in service that are fully maintained by us. That is, I register the company and as a corporate administrator provide it with all necessary services, including legal. There is often a fixed price in this direction, but we use hourly rates. We hear in the market that they are already dying, although we have other experiences. As for the administration of work: we can buy a program on the market that will calculate hourly rates, but there will be no module for accounting or finance. We can take some separate programs with the necessary elements, but we could not find a program that would suit us completely, so the only way out is to write it ourselves. That is, we need to build internal CRM, but because of the war, we decided to postpone this issue (planned to start in March, but put it on pause). Now we do not use any single program: Excel for separate tasks, for accounting department its own program, for billing hourly rates – separate, for text - Word, etc., like everyone else. However, we intend to organize all processes in one software - CRM, where all information will be stored, the workplace for each employee is necessarily protected because a lot of time is spent searching for the required information in different places. Thus, by investing once in the optimization of internal processes, you can significantly increase the efficiency of a particular employee.
- How are clients relationships built? What do they say, ask, offer?
I repeat that I was pleasantly surprised. Clients are concerned, because their employees are here. We worked together on how to keep the business going. From the very beginning of hostilities, we did everything to save the business of our clients. The main resource that we protected both for clients and for ourselves is people. We do not have physical documents, we use cloud technologies, so the priority was to organize a safe location for employees, and for our colleagues who went to serve in the Armed Forces, help with ammunition. Moreover, we pay such employees their salaries in full (we even slightly increased them from April 1). That is, we moved, helped clients, reassured them that we would provide high-quality services as before. The key female employees were helped to go abroad.
It should be clear that a significant part of our business processes is autonomous, and everything will work as follows: our Chief Operating Officer has left, Chief Accountant, Chief Legal Counsel, i.e., the main tops have also left and can safely perform their duties. Only my partners and I stayed in Ukraine. I don’t even understand how we will return to normal life, because employees are not here, clients are not here, business is in the “cloud”. When the travel ban is cancelled, I can fly to Cyprus or Dubai and continue working there. Of course, as long as there is a war in the country, we will be here. We all invest both emotionally and financially for Ukraine to be, we did our best. But if the country is in the same state system, corruption, etc., it will soon become “cloudy”, because all elite will live abroad. The reality is that most of the IT professionals are already in Cyprus. I don’t know whether they will return. Much depends on what a renewed Ukraine will be like. Much depends on what a renewed Ukraine will become.
- How has your relationship with clients changed?
- Our clients have become more pliable. That is, those things that were difficult in the relationship, in the elements of team building with clients, have become simpler. Cooperation has become easier, guidelines have changed, clients have become more specific, paying attention to strategy and tactics. Even those russians we worked with called and apologized. I mean, they apologized for putin - we had such an episode too.
- How does the fintech sector in Ukraine and abroad feel now?
- Fintech in Ukraine will prosper. Here Kherson is being tried to be “pushed” into the ruble zone, and in our country we have Visa/Mastercard of Privatbank, where we easily pay in hryvnias, make purchases, and everything works well.
The latest technologies are saving us, because for opening an account, you do not need to go to the bank. Everything is done online, even an account abroad can be easily opened. The same, when problems begin with the banking sector, when it loses credibility, because it is not clear whether banks will work here at all, someone will open an account in an English bank - for this you don’t have to go anywhere.
The process is optimized to minimize clients’ actions. If, for example, it is much more difficult to open a bank account for a business, then there are no problems for an individual. Now all the information that gets into the banks becomes available to the tax authorities, the State Financial Monitoring Services of Ukraine and can be obtained by any competent authority - the correct request will be answered. Ukrainian jurisdiction does not provide legal instruments to enable businesses to operate in this market. The largest fintech projects will work, but they are implemented with minimal involvement of Ukrainian jurisdiction, because there are no legislative acts, because corruption thrives in Ukraine. It has a big impact and it’s very scary. That is, everything is fine with world’s and our fintech.
- Share your observations on how the Ukrainian legal services market is adapting to the realities of war.
- Development has two forms - progress or regress. We are developing, but we need to think and analyse what we have. Probably, after all this is progress, because first of all, there was an initiative from the legal community with calls to apply to the European Business Association with a demand that we will not cooperate with companies serving russians. We have made a declaration that those law firms that remain in russia must leave the EBA. That is, you are either here or there. This initiative came from “Asters”. In this regard, we are preparing, we have a common position.
From the point of view of the economy, no one asked for help, probably everyone is coping. I know that some law firms are closing down, but it seems to me that they are closing down not because of the war, but for some other reasons that this war has exacerbated. Why do I think so? Because they closed very quickly, literally 7-10 days after the start of the war and it is impossible to experience an economic shock so quickly. In any case, everyone has some margin of safety, at least for a few months. It must be, because otherwise it is impossible to do business. I think everyone else will be able to adapt.
In the legal market, there may be problems for those who have worked directly in the Ukrainian market with Ukrainians. In such companies, everything can stop. For example, farmers may have lower yields because they will not be able to sow all areas. I predict an increase in demand for tax planning among Ukrainian clients. That is, some procedures with assets and with involving offshore instruments, etc. will be required. Perhaps there will be demand for business protection and investments.
-How will the global market be reformed, given that global law firms have left and continue to leave russia?
- In any case, there will be some “rat” that will work with russia. The one to whom money is more important than principles. Yes, these law firms will be there, but then others won`t be willing to cooperate with them. Foreign law firms, some partnerships (for example, British) will not work, because in the West there is a Cancel culture. And if, for example, someone writes on Twitter that some company finances and helps to kill civilians, this company will be forced to close. This company will have no clients, everyone will refuse it, bank accounts will be closed, and it will go to russia by boat. Here’s the digital world, IT - it all works like that. Previously, we simply did not have the ability to constantly communicate at such a speed between a large number of people.
There are many examples of global isolation. For example, the situation with Kevin Spacey, when some fool said that he was being harassed by Kevin 17 years ago (by the way, the trial was lost), and the talented Oscar actor disappeared for 4 years - he stopped filming because one person just made a statement. In fact, you can say anything, but it is important to prove your words in court.
And although the court acquitted Spacey, his career was already destroyed, all contracts with him were terminated. He suffered greatly, but unfortunately, no one compensated him. Why? Because the applicant lied, he exercised his procedural right. And Spacey exercised his right to defence. But when the consequences come, nobody cares.
If you look at Western presentations of new products, you will see that a significant part of them is devoted to social responsibility, helping minorities, low-income sections of the population, and so on. Because if you don’t do that, you will be despised - you are either with us or against us. This position of the West is currently working for Ukraine - the russians have already been disconnected from everywhere. However, there are also problems. In the first 40 days of the war, the EU gave us $ 1 billion and Russia $ 40 billion. And putin himself does not see the results of the sanctions, because funds are being transferred to his accounts, he does not see a real threat. It was only after Bucha that the EU saw the real scale and seriousness of the threat.
- What will you do immediately after our victory?
Our company will go by cars to Kyiv, Chernihiv, Okhtyrka, we will go to Kharkiv, Izyum, Mariupol, possibly to Luhansk and Donetsk, and maybe to Moscow. We’ll see. Perhaps we will organize a legal community and go together.