Leading Nordic firm Castrén & Snellman has agreed to transfer its Moscow and St Petersburg offices to Capital Legal Services (CLS) in a ground-breaking deal.

The arrangement is seeing eight of Castrén’s 10 Russia-based lawyers, led by highly rated St Petersburg-based partner Sergei Lee, join CLS.

It is the most high-profile law firm exits from Russia since Orrick closed its small office at the end of 2017; while it is also believed to be the first time a Russian firm has taken over a set of offices from an international firm in this way.

CLS, which was founded in 1999, says it is taking on 80% of Castrén’s legal and administrative staff while the two firms have pledged to deepen their co-operation going forward having enjoyed “a long history of friendship”, according to CLS managing partner Vladislav Zabrodin.

The deal marks a major strategic change of direction for 300-lawyer Helsinki-based Castrén, which opened its St Petersburg office in 1994 before moving into Russia’s capital city in 2007.

“We are confident that we will be able to offer our clients an as good, if not even better, service through the extensive services and expertise of this strong local firm,” said Heidi Paalanen-Koev, the partner in charge of Castrén’s Russian offices, who will remain at Castrén, heading up its Helsinki Russian desk.

Zabrodin, added: “By combining the strengths of our firms, we can offer clients top grade service, allowing all clients to continue doing successful business on the Russian market, which can sometimes be a challenge indeed.” 

Capital Legal Services, which has more than 50 lawyers, is rated in tier one by The Legal 500 directory for commercial, corporate and M&A, and is also ranked for PPA and infrastructure, private client and real estate.

Russia was once regarded as a major growth area for international law firms, but the market has been dampened by geo political uncertainty and international sanctions.

Despite this, most international law firms are sticking with the jurisdiction: Orrick was the last global 200 law firm to quit Russia, when it closed its small office at the end of 2017. 

In 2018, top litigator Ilya Rybalkin and corporate lawyer Suren Gortsunya quit Akin Gump in Moscow with 11 other fee earners to launch Rybalkin Gortsunyan & Partners.

And last year, Eversheds took over local law firm Tilling Peters, adding nine lawyers to its Russia practice.

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