The FINANCIAL — “An increase in the number of clients is not the best way to measure the company’s growth. The best way to measure it is by the revenue of the company, which has tripled in two and half years,” Ted Jonas, Managing Partner of DLA Piper’s Tbilisi office says.
In mid-2005, when DLA Piper took over the former EY Law in Georgia practice, the firm had five lawyers and two paralegals. Today, the company employs 18 lawyers and one paralegal, and 12 staff (corporate, administrative, etc.).
DLA Piper has just moved to a new office in the centre of Tbilisi at Melikishvili Street 10. The company’s well known corporate clients include BP, EBRD, IFC, TBC Bank, Bank of Georgia, Silk Road Group, JSC Madneuli, Ferrerro, GRDC, the Government of Georgia, and numerous international real estate investors.
The firm's Georgian attorneys are known to be among the country's best — and it is unique for having foreign lawyers as well — American managing partner Ted Jonas and British solicitor Clare Titcomb – who enhance its ability to do international work.
Q. DLA Piper is acknowledged as one of the highest quality providers of legal services in Georgia, how long has the company been occupying the Georgian market?
A. DLA Piper started in Georgia in July 2005. It is based on the law practice that was originally established as Georgian Consulting Group (GCG Law) by Kote Rizhinashvili in 1994. GCG Law was absorbed into EY Law when Kote went to Moscow in 2001 to become the Managing Partner of EY Law for the CIS. Then DLA Piper acquired the majority of the business and attorneys of EY Law in the CIS — Moscow, St. Petersburg, Kiev and Tbilisi – in July 2005. There is a lot of continuity between the old GCG Law, EY Law and DLA Piper in Georgia today.
“DLA Piper has tripled in size and revenue since 2005”
Q. The Georgian market is already rather saturated with local law offices, who are the rivals of the company and how do you manage to cooperate with them?
A. There are a lot of lawyers in Georgia, but there are only a small number of them that can do international work. That means the ability to represent foreign clients on transactions in Georgia and Georgian clients in international transactions. It requires a near-perfect command of English and it requires knowledge and experience of law in the international context, whether transactional or contentious. There are only about five or six law firms in Georgia who have lawyers with these skills, and I think it is pretty well accepted that we have the largest number of them concentrated into one firm. As for our "cooperation" with the other firms: We compete with them; we work with them constructively when we are on opposite sides of a deal, because that's in the interests of our clients, and I think we have mutual respect and friendship.
Q. What are some examples of your clients and the work you've done for them?
We represent many of the large foreign investors in Georgia and large Georgian companies too, and many mid-size clients whose names would not be well-known but are no less important to us and our business. Some of our better known clients include BP, EBRD, IFC, TBC Bank, Bank of Georgia, Silk Road Group, JSC Madneuli, Ferrerro, GRDC, and the Government of Georgia. There are many others that I would like to mention but I can't because of confidentiality reasons. For the same reason I am reluctant to describe particular deals and litigation cases we work on or have worked on. I also don't want to offend any clients whose matters I don't mention! Suffice it to say that we have acted as Georgian counsel for the only Georgian companies that have done the only international equity and debt offerings on Western stock exchanges; we have acted for one party or another in all of the large M&A transactions in the Georgian banking sector over the last two years; we are legal counsel in the largest international arbitration cases involving Georgian interests; and we have acted for Georgian parties in many of the largest foreign investment and financing transactions in Georgia over the last couple of years. Aside from that we have done many significant but very confidential real estate privatizations and private sector sale-purchases, smaller corporate M&A deals, and infrastructure privatizations.
Q. Does you have any individuals as clients?
A. You mean as opposed to companies or organizations?
Q. Yes.
A. Very few. I would say that at any given time we don't have more than one or two physical persons as clients. All of our work is business-related, or public international law. It usually involves an amount of money that people are going to invest or put into contention through a company. We also represent international organizations, the government and NGOs. Occaisionally though there are specific situations where an individual, as an individual, has enough money at stake in some situation that he or she will want to engage us to act for him or her as an individual, and we do so.
Q. Please speak about the new office DLA Piper has just moved in to at Melikishvili Street 10?
A. We are very happy about our new office. We went through enormous growth in the last few years and we were getting more and more crowded in our old office. Because of our rapid growth, we were trying to move into a suitable office for a long time, but good commercial office space for rent is in very short supply in Tbilisi. Now we are in a modern and well constructed building. We finally feel like we have the space to grow, not to mention a much nicer office for those of us, and our clients, who are already here!
Q. Now DLA Piper has one office in Tbilisi, does the company plan to open additional offices in Georgia?
A. We have thought about opening an office in Batumi because we do a lot of work in Western Georgia: maritime litigation cases in Batumi and Poti; some major projects and land acquisition work in Samegrelo. But until now it's just been an idea. Basically, Georgia is small enough that you can do most things from Tbilisi, but occaisionally it is an inconvenience for our people to be travelling a lot to Western Georgia for business out there, and that's when we think about having a more permanent presence, probably in Batumi.
Q. In what fields of law does the company represent clients’ interests, in what languages does the company serve its clients and what is the approximate price of the company’s service and consulting?
A. We do all kinds of civil and administrative law work: Energy and Power, Banking, Project and Trade Finance, Corporate Formation and Structuring, Joint Ventures, Contracts, Privatizations, Real Estate, Litigation and Arbitration, Capital Markets, Tax and Customs Law, Employment, Intellectual Property, Telecommunications. It's easier to say what we don't do: we don't do family or criminal law work.
As for working languages, the primary ones are Georgian and English. We can also work in Russian of course but it is not a primary language. We have individual lawyers who are fluent in German, French, Spanish and Hebrew, so if necessary we can work with clients in those languages too, and we have. One of our lawyers also knows Japanese, but we haven't had a chance to test her on it yet.
As far as our prices – you can't really talk about an "approximate price." Consultants — whether psychiatrists, accountants or lawyers — tend to value their product — which is advice and other things created by the human mind — in the amount of time that the human spends to create it. That is, most of us bill by the hour. We set our hourly billing rates according to the seniority and experience of the different lawyers. We give clients very detailed statements of exactly what we did, when we did it, how much time we spent on it, who worked on it – so the whole thing is very transparent. Some clients are comfortable with hourly billing because they are used to it — it's the norm in Anglo-American law firms — and because it's very transparent if strictly accounted for. But most clients want some certainty in advance of what the total costs of their legal services will be, and to the extent it can be predicted, we are willing to do this and cap our fees.
Q. Has the number of the firm's clients grown in recent years?
A. Yes, it has, but this is not the best indicator of our growth. The best way to measure it is by the revenue of the company, which has tripled. You can have a lot of small clients and make less money than if you have a few big ones. Fortunately we have had both an increase in the number of clients and an increase in revenue, coming from the amount of work that clients give us.
Q. Is the Georgian market regarded as a suitable place for global business by DLA Piper’s Internanational Management?
A. Absolutely. When Kote Rizhinashvili was looking in 2005 to take all of EY Law CIS into an international law firm, he had discussions with three or four, but the only one that was interested in taking the Tbilisi office, along with Moscow, St. Petersburg and Kiev, was DLA Piper. Their initial intuition was right. DLA Piper is a huge firm – it has 3,600 lawyers; 64 offices in 27 countries. And the Georgia office, though it is one of the smaller offices in the firm, is very well known for its high economic performance. We exceeded our budget in 2007 by more than any other office in DLA Piper world-wide. The Chairman of the global firm, former US Senator George Mitchell, has been here to visit us; the Senior Partner and Chairman of DLA Piper UK LLP, Peter Wayte, has been here. They are kind of fascinated by this little office in a mysterious country that does so much interesting work. We get a great amount of support from the firm's central leadership in the US and the UK and I am very appreciative of that.
Q. What are DLA Piper Georgia’s future activities?
A. To keep doing what we are doing, but to grow to keep up with the demands of our clients and to preserve and improve quality. Our biggest challenge is to hire enough good people to keep up with growth and to maintain quality. I am obsessed with the quality of our work because I am convinced that this is the one thing that sets us apart. Unfortunately Georgian services are not always consistent in the delivery of quality. Foreigners in particular find this frustrating in dealing with Georgia, but I know Georgians are frustrated with it too. I want us to be the one place in Georgia where a client knows it will always get high quality service and results.
Written by Natia Taktakishvili
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