Legal lessons via Russia.
Okay. You're ready to extend your business into the Russian Far East, but you don't feel comfortable about the Russian laws governing joint ventures. Or you've made initial contact with a potential partner in Vladivostok, but you're uneasy about your upcoming meeting with him in his own country. What if there is some nuance of Russian law you miss in nailing down the terms of the agreement? Will you end up with the lion's share of the liability?
Now Alaska law firm Hughes Thorsness Gantz Powell & Brundin has a unique solution for you: a Russian lawyer in Vladivostok who is fluent in English and specializes in helping companies like yours stay straight with Russian law.
Dr. Nikolai Shcherbina, an expert on international law and former professor at Far Eastern State University, has been advising foreign businesses about Russian law since the early days of perestroika. In 1991, Hughes Thorsness brought him to Alaska to acquaint him with American corporate practice and to learn from him about Russian law. The result was a legal affiliation that is serving businesses in both countries well.
Under the sponsorship of Hughes Thorsness, Shcherbina received the first foreign law consultant certificate granted by the Alaska Bar Association. According to Tim Byrnes, attorney with Hughes Thorsness, this is a "narrow-beamed certificate" which allows Shcherbina to advise American clients on Russian law. Shcherbina maintains his own office in Vladivostok, and Hughes Thorsness provides office space and support staff in Anchorage during his periodic visits to Alaska.
"People doing business in the Russian Far East need advice in both U.S. and Russian law," says Byrnes. The relationship with Shcherbina allows the firm to provide a "multicountry approach for people doing business across both borders." But James Gorski, also a Hughes Thorsness attorney, is quick to point out that the arrangement only extends to legal counsel. "We don't make business decisions, we just provide legal advice," he says.
DIFFERENT LEGAL TRADITIONS
The firm's work with transnational companies has included drafting advice on joint-venture documents, says Byrnes. In Russia, a joint venture is a separate category of business. There is no limit to the amount of foreign ownership a joint-venture company may have, making it an attractive option for American companies doing business in the Russian Far East.
A major concern for U.S. companies in Russia is dispute resolution. "(The Russians) just don't have the legal traditions that we have," says Gorski. Byrnes adds that "commercial law over there can be described as primitive."
Hughes Thorsness, together with Shcherbina, tries to help its clients assess the legal risks, and to draft documents for them that will reduce their exposure under less than ideal circumstances.
"We're here to help them assess the risks," says Carrol Schiffgens, director of client services at Hughes Thorsness. "We can do it on this side, and then refer them to someone on that side who can help them assess the risks from a Russian standpoint." The agreement with Shcherbina has greatly facilitated that service. "We can say we honest-to-God know somebody," says Gorski.
OBSTACLES STILL STAND
Some of the obstacles in establishing and conducting a viable cooperative law practice between Alaska and Russia involve activities that we simply take for granted here. Telephones, for example. "There aren't that many phones," Byrnes says. "People have them, they share them. Nikolai has had a phone request in for about two years."
Telephone service is also a bear of a problem. "It's a lot better than it used to be," says Byrnes. "I can usually get through on the second or third try now."
Getting a visa for Shcherbina was a problem at first. "There was no visa office in the Russian Far East," Byrnes explains. "He had to go all the way to Moscow first, get his visa, travel back to Vladivostok, then fly to Anchorage." That situation has improved with the 1993 opening of a consulate office in Vladivostok. Also, Shcherbina now holds a class of visa designed for professional people which allows him to travel freely between Alaska and Russia.
Russian-American legal services are still a very small part of Hughes Thorsness' business. "So far, it's been Americans going to Russia," says Byrnes. "Now we're starting to see Russian businessmen coming over here. In the long term, we see it working both ways. It's fun to work on Russian Far East issues. It's a very small part of our practice, but we like the fact that we're playing a part in the development of this new area."
"It's not the next gold mine," says Gorski. "It will take time to develop; it is a long-term commitment. But we've already benefited from it. It has been a way for us to learn about Russia and Russian law without having to travel over there a lot."
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|Title Annotation:||Access the World; Alaska law firm Hughes Thorsness Gantz Powell & Brundin|
|Author:||Phelps, Jack E.|
|Publication:||Alaska Business Monthly|
|Date:||Nov 1, 1994|
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