Russia’s invasion of Ukraine has led to City firms applying a ‘sniff test’ to potential clients and may lead to the creation of specialist practices by partners with a large number of Russian clients, specialist lawyers have suggested.

Adam Greaves, a commercial litigation and arbitration practitioner at LK Law, said the invasion has triggered a ‘sniff test’ for firms, driven by criticism from politicians and the press as well as ‘international corporate clients [who] don’t want to attract that sort of attention’.

Speaking on a panel on the first day of London International Disputes Week today, Greaves said City firms are ‘not really used to acting for people where there is so much smell’, adding that they may do quite a lot of white-collar work but ‘don’t tend to do the harder crime’.

‘I suspect there will be movement in the London legal market over the next few months,’ Greaves said, ‘partners leaving or being encouraged to leave depending on how much Russian-related work they did, setting up their own firms or joining firms that don’t have corporate practices [where] they have to worry about institutional clients.’

He added: ‘I think over time there will be quite a bit of movement of cases from one firm to another firm and perhaps the creation of firms that specialise in that sort of work.’

Tatiana Minaeva – a specialist in international arbitration and head of former Soviet Union work at RPC – agreed, saying: ‘This lucrative work, which was super-lucrative before [the invasion], is flowing towards smaller law firms, smaller boutique law firms, and I am sure that many partners of large law firms, they will start forming their [own] smaller law firms to continue to represent their clients.’

Epaminontas Triantafilou, a partner at Quinn Emanuel Urquhart & Sullivan, also agreed with Greaves that law firms’ response to the invasion of Ukraine was partly driven by their clients. ‘I don’t think we should be hiding behind the fact that sanctions are causing the problems, it is also other clients,’ he said. ‘In my experience at least, there are other clients who care very deeply as to whether a firm does Russian work at this point. There are moral objections to that fact.’

Triantafilou added that there are ‘clients who specifically will threaten to suspend or terminate commercial relationships, highly lucrative ones, if the firm continues to do Russia work’.

 

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