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DLA Piper Rudnick Gray Cary made a big play for Eastern Europe last month, grabbing 77 lawyers from Ernst & Young’s Russian practice and opening what firm leaders tout as the biggest law office in Moscow. The move may indeed be the largest lateral transaction in the history of the region. But it certainly isn’t the only one. “The market is so large that if you are determined to be a serious global player, [Russia]‘s a place you need to be,” says DLA Piper co-managing partner J. Terence O’Malley. “The whole of Eastern Europe is becoming an economic engine for the old Europe.” U.S.-based firms are rushing to the region, fueled by work in the energy and tech sectors. Jones Day established an office there a year ago. Orrick, Herrington & Sutcliffe is opening an office now with three Moscow partners from Coudert Brothers who came as part of a larger play for attorneys in Coudert’s London and Paris offices. Orrick expected to bring along 10 to 15 associates from Coudert’s Moscow office last week. “As always, Orrick opening any place turns on identifying teams of lawyers on the ground to do the work,” says Orrick Chairman Ralph Baxter Jr. Orrick’s original European strategy called for offices in Paris, Milan, and Frankfurt. But Baxter says the firm was attracted to Russia because of the way the economy there is developing. “In Russia, a lot of the development will be based upon foreign investment,” Baxter says, adding that the firm expects to do work there for clients Cisco Systems Inc., Dow Chemical Co., and Citibank. “Deals will be created under the laws of the U.K. or New York. So we created an office in Russia that will be able to document cross-border deals.” Others are thinking similar thoughts. Winston & Strawn is looking to open a small Moscow branch by exporting New York partner Nikolai Krylov, a Russian who studied at Yale Law School, who will staff the office with locals. “We are opening it because of some of the work that we have been doing for entities in Russia,” says Winston managing partner James Neis. Neis says his firm is benefiting from an influx of American and European institutional investors that are investing in Russian ventures, especially in energy and telecom. “It’s my impression that law firms are recruiting more and more and beefing up their capabilities,” agrees Baker & McKenzie’s Arthur George. “As are we.” Baker has 89 attorneys in Russia and the Commonwealth of Independent States and is bulking up offices in Moscow and Kiev. “During the mid-90s there was a bubble of capital markets work [in Russia], and a lot of the New York firms and some of the London firms exploited the opportunity and also became too dependent,” says George. “And so when the financial bubble burst, a lot of the firms that were not diversified ended up shutting offices and laying off their lawyers.” Now that the economy has come back, George says there is much more diverse work than before. George helped open Baker’s first office in Moscow in 1989, around the same time that Coudert Brothers set up shop in that city. The two were among the first foreign firms in the Soviet Union, preceding the fall of the Berlin Wall. Today there are more than 50 foreign firms in Moscow. Baker also has offices in St. Petersburg and in Kazakhstan and Azerbaijan. Baker Botts, in Moscow since the early 1990s, is ramping up to meet the demands of its clients, mainly those involved in oil and gas production and power projects. “We have six lawyers on the ground,” says Stuart Schaffer, firmwide chair of the global projects group. “We would like to be bigger, maybe double that size.” The firm recently moved high-profile energy partner George Goolsby from its Houston office to take the helm in Moscow.
Marie-Anne Hogarth is a staff writer for The Recorder, the ALM publication where this article first appeared.

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