Moscow was the only city to lose lawyers last year among the overseas markets tracked by the NLJ 350 Regional Report, as U.S. firms operating in the Russian capital dropped attorneys at a rate of 2 percent.

The drop was relatively small—just 550 NLJ 350 lawyers worked in Moscow in 2012—but it stood in contrast to gains in all other foreign locations. Those gains show that law firms have continued to commit resources to major international markets—except in Moscow.

“It’s a hard place to do business,” said Ward Bower, a consultant with Altman Weil. “It’s a very controlled economy and nobody knows what the rules will be tomorrow.”

During our annual headcount survey of U.S.-based law firms, The National Law Journal examined international cities with at least 450 lawyers: Beijing; Brussels, Belgium; Frankfurt, Germany; Hong Kong; London; Moscow; Paris; and Tokyo. Beijing had the biggest percentage increase in NLJ 350 lawyers, at 11 percent. Brussels had the smallest gain at 1.1 percent.

Firms discarding attorneys in Moscow included Hogan Lovells, which reported 32 lawyers in 2012 compared with 45 in 2011; and King & Spalding, which employed 11 lawyers there, a loss of three. Additional firms shed one or two lawyers.

Dewey & LeBoeuf, which filed for bankruptcy in May 2012, closed its 29-lawyer Moscow office last year. Most were absorbed by Morgan, Lewis & Bockius, which opened a Moscow office. Quinn Emanuel Urquhart & Sullivan opened its own shop in 2012 with eight lawyers.

Law firms interested in Moscow expansion would do well to focus on energy work, Bower said. Little else, he continued, is sustainable right now. “It’s a natural resource play, because there’s not a lot of inbound investment. It’s not an active market for investors and for businesses.”

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