Konstantin Krutilnikov participated in the IX annual Russian Legal Forum
On April 3-4, 2013, the annual Russian Legal Forum recognized by legal community as a venue that enables business leaders, corporate lawyers, and external consultants, public officers and judicial manpower to meet on common ground, was held in Moscow.
Konstantin Krutilnikov, managing partner of the law office S&K Vertikal participated in business lunch dedicated to mergers and absorptions of law firms (a sections of the official program of the Forum). Discussion was attended by managing partners of diverse Russian and international law firms.
Discussion involving the issue of mergers and absorptions of law firms triggered diverse opinions and approaches; however, contributors practically unanimously recognized poor perspectives of mergers between the Russian law firms. Some of them believe that the main reason of this phenomenon is mentality of partners, others tend to emphasize small size of the legal market and partners’ unwillingness to increase the scope of the firm to escape work deficit and increase in expenses.
Contributors voiced an opinion that in the real domestic business environment takeovers prevail, when a firm is absorbed by another entity, and no associations of equal entities exist. Besides, one may observe a reverse market trend, i. e. splitting of the law firms.
Konstantin Krutilnikov stated that every successful law firm expecting for further growth and an increase of competitive advantages faces the issue of a merger. He believes that a successful merger is only possible in the presence of several factors, i.e. the uniform strategic vision of partners from the merging companies, and financial and administrative synergy factors, such as cutback of spending, increase of income, improvement of administrative processes, financial engineering and tax optimization.
"If parties to a merger have a similar vision of their future in the long perspective and have financial calculations which are indicative of advantages of merger, then such merger makes sense. Mergers should not be motivated only by people’s desire to increase profits or to attract a particular customer,” summarized Konstanin Krutilnikov.