Far from being hindered by the sanctions on Russia, Kazakhstan is benefitingKazakhstan is one of the fastest growing countries in the Commonwealth of Independent States (CIS), with a 6 per cent GDP growth in 2013.In the past year it has also been the target of interest by foreign law firms, with launches by emerging markets specialist KINSTELLAR and REED SMITH , and talk of several others scanning the landscapeThe positivity comes despite strained relations between Russia and Ukraine and the associated EU issues and sanctions – or, think lawyers, because of it.“Investors realised Kazakhstan isn’t really impacted by the sanctions,” says Kinstellar’s local managing partner Joel Benjamin. “Kazakhstan is Kazakhstan: the crisis is limited to Russia and Ukraine. Kazakhstan seems to be a safe haven.”“Probably some companies that originally planned to go to Russia or Ukraine are coming to Kazakhstan,” agrees DENTONS ’ Kazakhstan managing partner Aigoul Kenjebayeva.Firms in Kazakhstan report a good pipeline of M&A activity across sectors including oil, gas and mining – the backbone of the country’s economy. Benjamin picks out telecoms as another active sector and notes that real estate work, particularly hotel construction, is also on the up.GRATA ’s managing partner Rashid Gaissin says there is also some banking work, largely driven by Russian banks such as Sberbank or VTB which have large Kazakhstan portfolios.“Russia is interested in its neighbouring countries,” comments Gaissin, noting that as the EU has distanced itself the CIS’s largest state is turning again to local allies.As well as transactional work, litigation is a busy practice area. Gaissin says disputes are arising from past investments and points out that this is an area where larger local firms such as GRATA can benefitas only the biggest international firms can offer contentious advice.
There are only a handful of international firms present in Kazakhstan. Dentons, with around 35 lawyers, is the largest. Both legacy Salans and legacy SNR Denton  had offices in the country prior to the firms’merger last year. In September Benjamin, then a partner at legacy SNR Denton, took senior associate Adlet Yerkinbayev and eight other lawyers launch Kinstellar’s Almaty office.Other firms with Almaty presences include BAKER & MCKENZIE ,CURTIS MALLET-PREVOST COLT & MOSLE, DECHERT  and NORTON ROSE FULBRIGHT .
MORGAN LEWIS & BOCKIUS opened in Kazakhstan in 2012 when it hired a team from collapsing Dewey & LeBoeuf. WHITE & CASE  is also in Kazakhstan and, like Dentons, launched a second office in the country’s capital Astana in September 2013.Reed Smith opened early this year, hiring two partners from Morgan Lewis and White & Case.Benjamin says Kinstellar was “the perfect choice” for his team. The CEE firm maintains a solid reputation thanks to its spin-out from Linklaters , but is still seen as an independent. This, says Benjamin, makes it the “best of both worlds” in terms of being able to offer international-quality local advice.Over at Dentons Kenjebayeva says the merger has been good for the team that remains. She explains that following the tie-up the firm reorganised into 10 practice groups and all lawyers now have a narrowspecialism.“This allows us to be more competitive,” she adds.Gaissin predicts more international firms will move into Kazakhstan as efforts continue to make the country more investor-friendly.Lawyer-friendly systemLawyers are also battling to make the local regulations more lawyer-friendly. The Kazakhstan Bar Association, chaired by Kenjebayeva with six local firms and Dentons as members, is putting its case to the government to be approved as a self-regulation body for the profession. Kenjebayeva explains that the association wants, among other things, rights of audience in the courts broadened to cover corporate firms as well as criminal advocates.“The government will look carefully at regulation of this market in the next five to 10 years,” Gaissin says. “Let’s hope it goes in the direction of more self-regulation.”
Another key CIS economy is Azerbaijan. It is growing at a similar rate to Kazakhstan, with GDP expanding by 5.8 per cent a year, but workflows are coming from different areas. GRATA partner Samir Hadjiyev, in charge of the firm’s Azerbaijan practice, says banking and finance is busy, as is work in the FMCG sector.The UK remains the largest foreign investor in Azerbaijan and Italy the country’s biggest trade partner. Hadjiyev reports a small amount of investment from the US and France too, as well as the regular use ofNetherlands holding companies.However, Russian investment in Azerbaijan is minimal.“We see the attempts but we don’t see any real investors from Russia,” says Hadjiyev.The legal market remains small. BAKER & MCKENZIE and DENTONS are the only international firms in Baku and the local legal market is much smaller than that of Kazakhstan.For GRATA, this is a boon, according to Hadjiyev, who says his firm has good relationships with most major City practices.
Life expectancy at birth: 70
Source: World Bank, Kazakhstan Committee on Statistics
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