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Growing up in Halifax, John Place always wanted to visit Russia. But he never expected the country would figure so prominently early in his career.

The 32-year-old lawyer with the Toronto office of Heenan Blaikie LLP got to finally visit Russia when he was halfway through law school at the University of Victoria.

Then, within a week of graduating law school in 2001, he was on a plane headed back to Moscow. This time, it was to take a job with the U.S.-based international firm, White & Case LLP, which at the time had more than 50 lawyers in its Moscow office.

His first client meeting was with a Russian entrepreneur. His first time in court was to observe a Russian trial. The first contract he drafted was a Russian pledge agreement.

He spent three years in Moscow, then articled with Aird & Berlis LLP  in Toronto. In 2005, he moved over to Heenan Blaikie in Toronto.

But while he’s back in Canada, his corporate, securities and international business law practice remains largely focused on the Russian market, which finds him working within a group that includes former Prime Minister Jean Chrétien, who serves as counsel with Heenan Blaikie primarily in Ottawa.

Based on his experience, Place is arguably the firm’s man on Moscow.

As he explained recently before heading off for his annual February pilgrimage to the city, “if you want to understand Russia, you have to spend considerable time there.”

While he was in Moscow in the early 2000s, he witnessed Russia undergo “almost wholesale” modernization of its legislation from the Soviet era.

New sections of the Russian Civil Code were introduced, along with a new Criminal Code, new Administrative Code, new Arbitration Procedural Code, new Customs Code and new codes for civil and criminal procedure and labour. As well, the tax system was completely overhauled and there is new legislation governing the securities market.

Russia’s legal reforms “have increased confidence in the courts and, very importantly, in the enforceability of contracts and business arrangements in the country,” Place said during an Economic Club of Toronto panel discussion on Russia held last year.

Some of the new laws directly address new realities. For instance, patent and trademark filings in Russia have been increasing at a rate of about 10 percent, with patent filings at about 40,000 and trademark filings at about 60,000 in 2007, according to David Aylen, an intellectual property lawyer and partner with Gowling Lafleur Henderson LLP. He estimates that 80 percent of those filings were filed by foreign entities, most likely of European and American origin.

On the legal side, Russia’s new legislation dealing with competition provides protection against unauthorized use of trademarks, and the new Customs Code provides a mechanism to prevent counterfeit goods from entering the country.

Meanwhile, as Aylen’s figures show, the rise in IP activity, and much of its international source, offers new opportunities for law firms — including those from Canada, such as Gowlings.

Already recognized internationally for its IP law expertise, Gowlings has three Russian lawyers and five Russian IP agents specializing in patents and trademarks in its Moscow office. In late January, Aylen joined them as managing director.

While he won’t be practising law there, since he is not a member of the Moscow bar, Aylen will run the office and be the front man for the firm, promoting its services, attending conferences and networking with businesspeople in the Russian capital.

The goal is to attract clients from outside Russia, targeting American, European and Canadian companies and law firms.

“A firm that is our competitor in Canada can be our friend in Moscow,” explained Aylen. “Who better to send your work to than somebody you know in Canada that understands what you’re talking about, especially in a country like Russia, which has an emerging market. Our expertise is that we have Russian lawyers in our Moscow office who know what to do in Russia.”

Aylen plans to spend at least the next two years highlighting Gowlings’ expertise in IP and commercial law, to capture some of the growing franchising business in Russia, and in oil and gas, working with the firm’s energy group back home in Canada.

But in that latter area, Gowlings has competition in Russia. Macleod Dixon LLP, which is headquartered in Calgary, “the heart of Canada’s energy industry” as the firm website boasts, has a Moscow office focused on oil and gas with a staff of 40, including 19 professionals headed by three partners.

Macleod Dixon’s Moscow office also deals with other areas, including mergers and acquisitions (M&As), securities, telecommunications, customs, taxation, real estate, international trade and corporate and commercial law.

While Moscow is home to more than 50, mainly U.S. and U.K. law firm offices that tout their own specialty areas, Gowlings is the only Canadian law firm with a lawyer, Aylen, based in the Russian capital. Others are not following his lead.

“For the time being, the strategy generally employed by Canadian firms toward international business is to do it on the ground from Canada where the resources are,” said Place.

He explained that he’s “on the phone to Russia daily” and can be there “within 24 hours,” though he acknowledged that it could take up to two weeks to get a multiple-entry visa. He also makes at least one major trip every year to Moscow, spending about 10 days there during the first half of February.
Place’s interest in Russia is similar to that of colleagues from other firms in Canada, or in Moscow, encompassing natural resources, corporate financing and M&As. “The focus of my practice is helping Canadian companies from diverse industries that are looking to explore the Russian market, and also increasingly helping Russian companies interested in exploring opportunities in Canada.”

Still, Russia presents some challenges.

The impact from the global recession in Russia has been “severe,” particularly in the construction and banking sectors, and has “slowed down opportunities for foreign lawyers,” said Place. “If a lawyer is looking for international experience, there are a lot safer choices in terms of going to London or Paris.”

Still, he believes that Moscow is an “emerging centre for high-calibre transactions” and said the country is on track to experience economic growth over the next three years, despite the global economic meltdown. And, he notes,  between 2003 and 2008, Russia posted an annual GDP growth rate of about seven percent.

Aylen cited gloomier statistics: over the last five years, Russia’s inflation rate has increased by at least 10 percent annually. Yet he remains optimistic about Gowlings’ prospects in Russia.

“While there’s probably reduced work for everyone, it doesn’t mean we’re not in a position to target new clients.”

Aylen explained that Gowlings’ specialty in IP also gives the firm an opportunity to help companies dealing with the dramatic rise of counterfeit products, ranging from faux Louis Vuitton luggage sold on the black market up to the trafficking of phony pharmaceuticals run by a worldwide organized crime network.

Despite the robust counterfeit market, Place says reports of widespread corruption in Russia are “most certainly exaggerated” in terms of any effect on investment or business.

“There are close to 700 Canadian companies doing business in Russia, and I’ve worked with many of them, as well as European and U.S. investors, and am aware of very few cases of corruption or bribe-paying. This highlights the great divide between perception and reality on the ground there, because it’s very difficult for Canadians to access accurate and impartial information concerning investment opportunities in Russia.”

He said the Canada Eurasia Russia Business Association (CERBA), of which he is the Toronto chapter head, is trying to counter the “dramatic and scary stories you see in the press or hear at a cocktail party from someone who retreated from the Russian market 10 years ago.

“For every one of those stories, there are hundreds of great success stories in Russia ...Yet, the few negative stories do resonate.”

For instance, in the 1990s, former Gowlings lawyer Jack Robertson, who helped establish the firm’s Moscow office, was reportedly mugged by his own driver.

Now, the city has been hit by a neo-fascist wave, with “rogue groups” running the streets and terrorizing visible minorities — though law firms and businesses have not felt any direct impact, said Aylen.

Still, he and Place note some hurdles confronting Canadian lawyers involved in doing business in Moscow.

The Russian capital functions in a language that uses the Cyrillic alphabet, which Aylen cannot read but Place can, along with understanding some spoken Russian.

While most Canadian lawyers outside Quebec function within the common-law system, Russia uses the civil-law system based on substantive and procedural codified laws.

As well, Russia is as “highly bureaucratic” as it was during the Soviet era, which makes it “very difficult” to function there and requires patience, said Aylen.

He added that Moscow also has the distinction of being the world’s most expensive city, besting Tokyo, London and New York last year.

“The wealth there is incredible and prices can be astronomical,” said Place.

Still, he believes the benefits far outweigh the disadvantages.

“There is incredible opportunity for Canadian lawyers who are interested in Russia,” said Place.

“Russia and Canada are natural business partners because they share some common challenges in terms of providing goods and services to a population spread across a vast land mass. We also share a similar climate... we’re well situated to be northern trading partners.”

At the moment, though, Canadian companies are a “little bit more cautious” and aren’t moving “as quickly” as their Russian counterparts would like.

“Russian companies see Canada as a land of great future opportunities for them to spread their wings and diversify their international holdings.”

In Place’s view, Heenan Blaikie is well-positioned to help drive Canada-Russia linkages.

“Canadians looking at doing business in Russia will be naturally inclined to work with a Canadian law firm to coordinate a project from here, while Russian companies looking to come to Canada will need someone on the ground in Canada.”

Aylen believes demand will drive Gowlings business.

“From a management point of view, it’s usually advised to follow your clients wherever they go. So, if they head for Russia, we’re there too to help them there with transactions, contracts and general commercial work,” he said.