— My father’s firm was running a different sort of legal practice from what we are doing in Moscow, he says. It was mainly participating in court proceedings, questions of corporation law. And mostly at the local town level.
I at once started thinking how I could go outside the country, open an office abroad and run a practice which might be similar, but at an international level. Specializing in matters connected with Spain, naturally.
We analysed the situation and realized that our relatively small firm would find it hard to compete with the major law offices in London, Berlin and Lisbon. At the same time, we were interested in a country where there would be good prospects for developing relations with Spain. Russia appeared to be a suitable starting point. We became the only Spanish law firm in Moscow.
But this happened later. I began coming here regularly from 2002. I got to know the market and made connections. Clients began to appear, and by 2008 we had sufficient experience to open a permanent office here.
– In my view, the legal services market in Moscow is not yet fully formed. and some of its processes, in particular price formation, might be described as chaotic. Moscow has law firms or “bargain basement” offices with cheap uncomfortable premises and without any system for advancement; and alongside them, quite well-advanced Western-type law forms in expensive Class A offices, with aggressive marketing and highly active staff.
However, it is not the case that the quality of the latter’s service will be much different, but the remuneration may be tens of times as much. Therefore the costs to an investor in this field will depend primarily on what niche in the market he intends to occupy.
I estimate that to start up a fully-fledged Western-type law firm, with costs for a Class A office, equipment, qualified staff and advancement, the owner of such a company would have to spend at least $20,000 a month. Furthermore, no-one can guarantee that these expenses will be recouped rapidly, since there are already quite a lot of local players and competitors with a well-established reputation in this market. I would advise potential investors in this field to attract qualified partners from among Moscow lawyers, since in the absence of full-value offers in the market, the demand for a mutual partnership among well qualified specialists is now very high, and in the legal business, as you know, the lawyer is the main asset.
— What difficulties did you encounter in starting a business in Moscow?
— The language barrier was the main problem, of course. But I got by with a knowledge of English. However, on the whole... Many people in Spain think that running a business in Russia is very difficult. I don’t think it is. There are differences, of course, Different laws, different traditions, different way of life. But you would come up against that in any country in the world. I can’t say that working in Moscow was a big challenge for me.
— Did any problems arise in registering the company in Moscow?
— I didn’t encounter any particular difficulty. The bureaucratic procedures here are no worse than in Spain. I got through them quite easily.
— Did you start without Russian partners?
— I had none then and I still don’t. But from the very beginning, a Russian woman I had got to know in Spain worked with me. She helped with translation and arranged contacts and connections. Today she is the director of my Moscow office.
— You yourself speak quite good Russian now. Did you study the language specially?
— I began learning it before moving to Moscow. I found a teacher in Spain with whom I studied for an hour or an hour and a half a day. But I soon stopped taking systematic instruction. Once I was in Moscow, I was picking up the language in the course of everyday life and work.
— Can a lawyer get by in Russia without knowing the language?
— If you are dealing with Russian clients and Russian law, it is better to know the language. But I know foreign lawyers working in Moscow knowing no Russian at all, making use of English instead. Personally, I don’t think that’s quite right. Living here, you should know the language, if only at the basic communication level.
— Was it easy for you, a Spaniard, to get used to the Russian way of thinking and the particular features of the Russian character?
— I think that in our mentality and character, we are very like the Russians.
— But if you have dealings with them as clients, are there differences?
— What I like about Russians in general and Russian clients in particular is that they are more dedicated to the matter in hand than the Spanish. They take decisions faster and much more decisively. That is probably the main difference. A client in Spain thinks it over longer, the decision-making process proceeds slowly.
– It is quite hard to assess entry into the legal services market. If you were a private lawyer or attorney and decided to develop by opening a law firm in Moscow, your starting capital would have to be at least 500,000 roubles. This covers renting your office, registering as a legal entity, taking on staff and getting your firm going. It’s quite difficult to estimate the recoupment period, since everything will depend on your existing client base, and also on whether you can attract new clients for your colleagues. But on average, it is from three to six months.
In spite of the crisis, legal services prices have not fallen in Russia, and they remain stable. But because of specific tendencies towards changes in Russian law, the number of law firms specializing in one specific field of law is increasing. It is also worth noting that the “Uberization” of legal services is growing rapidly. Soon the drawing up of process documents, petitions and complaints will be automated, and lawyers will only be needed to attend courts and other administrative levels. “Uberized” services in the selection of lawyers were created long ago. It will soon be possible to provide simple legal services with the aid of various programs and services on the internet.
— Did you need a lot of capital to start your business here?
— I can’t even tell you what the initial sum was. Moscow is quite an expensive city, of course. And qualified staff are expensive too.
— Would expenses be less in Spain?
— It’s hard to say. Maybe the salaries of certain categories of staff are higher there. and also the social insurance fund payments. But here, for example, renting an office is more expensive.
— How do taxes compare?
— They are lower in Russia than we have at home. At least as far as medium and small business is concerned, they are certainly lower. By European standards, taxation here is quite reasonable.
— Are the salaries in your firm comparable to Spanish ones?
— That depends on the job, of course. But we try to keep staff salaries roughly at the Spanish level.
— Do you remember who your first client in Moscow was?
— It was a Spanish firm. I would like to make it clear that what we were doing in Moscow in the first few years, and what we have been mainly engaged in for the last five or six years are somewhat different things. We began with legal advice for Spanish firms wanting to enter the Russian market and establish themselves there. We helped them translate documents, gave consultations about Russian law, taxation, accounting – on a wide range of questions, in fact. It’s always good to meet fellow-countrymen abroad, who know what they’re talking about and can tell you about various aspects of life in the new country. So there was a lot of what I would call psychological assistance in adapting to the Russian market.
Now, the direction of the business has changed. We work mainly with Russian clients, legal entities and most of all individuals, who have interests in Spain.
— What sort of problems do your Russian clients most often bring to you?
— Not so much problems as questions we can help them solve, and on which we hold consultations. Many of them want to invest in Spain, particularly in property. There are legal aspects of acquiring it, opening a business, questions of moving to Spain, the specifics of taxation and obtaining a residence permit.
— How do new clients find you, or how do you find them?
— Today we have many clients we have helped, and new people come to us on their recommendation. Apart from this, we ourselves organize various conferences, and draw attention to ourselves through the social media and through our internet site.
— Does the Moscow firm employ many people?
— There are seven people working in Moscow. There are Russian speakers in all our offices.
– The legal services market in Moscow is enormous, and every day something is happening in it. If you take legal practice separately, more than 50% of the questions a lawyer deals with are questions of everyday life. The demand for solving such problems is high and stable. As a rule, the client is an ordinary man, a man-in-the-street, who is not prepared to pay more than 50,000 roubles for taking the whole case, from filing it to the court’s ruling. Such cases usually take from three months to a year. So it is unprofitable, to say the least, for an international company to be brought in to the consultancy market under such conditions. While they are coming in, before they become known, they will have to close down.
The sales generator now is the internet. To work through this resource, you need a good well-designed site offering online consultation. It costs about one million roubles to create such a site.
As for an office, it is important for an international company to have a mission-class office close to the centre of Moscow. To rent such an office costs about 20,000 roubles per square metre per annum, i.e. about two million roubles per annum will have to be set aside for the rent alone. Apart from rental expenses, money must be spent on equipping the workplaces. So a startup required five to seven million roubles, without taking into account the most important resource, which is advertising. There is tremendous competition in the legal services market, so advertising simply cannot be ignored. A company needs to spend about 500,000 to 1,000,000 roubles a month on advertising, that is, simply to begin functioning in some way and to receive telephone enquiries. The net salary of any lawyer is at least 100,000 roubles a month. Furthermore, he has to be a partner, so the company had to pay partner interest (about 30% of the deal). Only on such terms will any more or less professional lawyer agree to work.
— How did you select your staff?
— Mainly by recommendation from people we know. For our specific work, a good knowledge of Spanish is essential. The Spanish community in Russia is not very numerous. About three thousand Spanish subjects live and work in Moscow. They all know each other and socialize with Spanish-speaking Muscovites.
— Are your Russian specialists qualified to the international level?
—They suit us very well. They have a very good level of education.
— How did you find these office premises?
— In this business centre, through an agent. But there are also several quite good specialized internet sites. We have moved two or three times over the years, and we never found it particularly difficult.
— Are these premises expensive?
— You know, whatever the rent, it always seems too high.
— On the whole, is life in Moscow more expensive than in Spain?
— Moscow is an international capital. Therefore by definition, you would expect life here to be more expensive than elsewhere. But you always need to look at specific costs. Electricity, or, say, communal services, are cheaper in Moscow, and so are taxis. But eating in a restaurant is more expensive. Real estate prices are noticeably higher. Things have improved recently with the fall in the rouble exchange rate. But it is still more expensive than Madrid.
— What do you do in your spare time?
— Moscow is certainly not a boring city. There are many opportunities for culture and entertainment, and plenty of restaurants. In fact I very much like it here.
— Not in every way, surely? Admit it, there must be something you’re not quite happy with?
— The most obvious answer is the weather. Frankly, the winter weather in Moscow could be better. But in general, I prefer to accentuate the positive. You can’t expect that everything around you will always be paradise on earth. Concentrate on the positive aspects of life, and you will gain satisfaction from it.
— On your Facebook page, you have photos of the former world number one tennis player Rafael Nadal, the English football star David Beckham, and one of the best players in the history of American football, Thomas Brady. Are these your favourite sports?
— Yes, they are. I am a fan of these sportsmen and follow their performances.
— Do you take part in sport yourself?
— When I have time, I go to the gym and the swimming pool. I sit around too much in the office, I have to keep fit somehow.
— What are your preferences in food?
— One good thing about Moscow is that it gives you the chance to try the widest choice of cuisines from around the world. What I find most interesting are the cuisines of the former USSR countries: Uzbek, Georgian, Azerbaijani... I like the traditional Russian cuisine as well, of course.
— What do you think of the Spanish restaurants in Moscow?
— That’s a tricky question for me! I’ll just say that I often go back to my homeland, where I can try Spanish food in the original. That’s enough for me.
— Do you feel safe in Moscow?
— I’ve never thought about it. Here you can happily walk the streets late at night at visit various establishments. In my view, this is one of the safest cities in Europe.
— What would be your advice today to a Spanish businessman still wondering if he should start a business in Russia?
— Come here and try it. Judging from the foreign businessmen I know in Moscow, I can say that probably 90% are content with their life here and are growing professionally.
— What plans do you yourself have?
— We have come here for the long term. I am quite optimistic about the prospects. It is possible that we may open another office in Russia, somewhere other than in Moscow. But now we are working on opening an office in Dubai. We see good prospects for our business there too.