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DLA Piper Rudnick Gray Cary made a big play for Eastern Europe last week, grabbing 77 lawyers from Ernst & Young’s Russian practice — and opening what firm leaders tout as the biggest law office in Moscow. The move, which significantly expands DLA Piper’s Moscow and St. Petersburg offices and adds new outposts in Tbilisi, Georgia, and Kiev, Ukraine, 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 J. Terence O’Malley, co-managing partner of DLA Piper. “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 opened there a year ago. Orrick, Herrington & Sutcliffe is opening an office now, to be staffed by three dual-degreed, multilingual Moscow partners from Coudert Brothers — John Sheedy, Larisa Afanasyeva and Olga Anisimova — that came as part of a larger play for attorneys in Coudert’s London and Paris offices. Orrick is expected to bring along 10 to 15 associates from Coudert’s Moscow office this week. “As always, Orrick opening any place turns on identifying teams of lawyers on the ground to do the work,” said Orrick Chairman Ralph Baxter Jr. He adds that lawyers need to be a good cultural and economic fit. Orrick’s original European strategy called for offices in Paris, Milan and Frankfurt. But Baxter said 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 branch in Moscow by exporting New York partner Nikolai Krylov, a Russian who studied law at Yale University, who will staff the office with local hires. “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. “We needed a physical presence.” Neis says his firm is benefiting from an influx of American and European institutional investors that are investing in Russian ventures, especially in the energy and telecommunications sector. “It’s my impression that law firms are recruiting more and more and beefing up their capabilities,” agrees Baker & McKenzie partner Arthur George. “As are we.” Baker, which has 89 attorneys in Russia and the Commonwealth of Independent States, is bulking up its 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 more and more diverse work than before. George helped open Baker’s first office in Moscow in 1989, around the same time that Coudert Brothers established itself in Moscow. 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 now in St. Petersburg and in Almaty, Kazakhstan, and Baku, Azerbaijan. Baker Botts, established in Moscow since the early 1990s, says it is ramping up to meet the demands of its clients, mainly those involved in oil and gas production and in 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 a high-profile energy practice partner, George Goolsby, from the firm’s Houston office to take the helm in Moscow. Westerners say U.S. firms have a leg up on their Russian counterparts when it comes to competing for work on large and complex projects. “You see a lot of Russian lawyers who work for Western firms,” said Schaffer.

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