Dechert Georgia LLC Brings a Unique Perspective to Georgia’s Legal Market
Dechert LLP is an international law firm with more than 900 lawyers and top-ranked practices in corporate and securities, finance and real estate, complex litigation and international arbitration, financial services, asset management and capital markets. Dechert has a large global presence with 29 offices worldwide and is recognized globally as a top firm. The firm opened an office in Tbilisi in 2012, and while working closely with colleagues in the UK, US, France, Russia and United Arab Emirates provides a full range of services and worldwide legal practices relating to Georgia and the surrounding region.
To find out more about the company, its key practices, and challenges in the Georgian legal market, GEORGIA TODAY sat down with Dechert Georgia’s national partner Archil Giorgadze and managing partner Nicola Mariani (member of the NY, Paris and Quebec Bars).
Dechert was founded in the United States nearly a century ago and has emerged as a global firm since. Why did it choose to open a branch in Tbilisi?
Nicola: There was clearly an interest for Dechert to come to Georgia because of its regional appeal and the fact that very few international firms operate in Georgia. It is an easy place to build and develop a business, and there are no corruption issues.
Could you tell us the key practice areas of Dechert in Tbilisi?
Nicola: Our main practice area is corporate law and mergers and acquisitions. Our sectors of practice include telecommunication, energy, and many of the country’s big infrastructure and hydro projects.
Archil: In addition, we have been present in almost every capital market deal in Georgia. This year we participated in two major capital market deals. Recently we have started to provide more development and advisory services, including to the government, which involves providing assistance in developing the country’s legal system. The two projects we can identify in this respect include working on legislation covering private-public partnerships with the Ministry of Economy and Sustainable Development, as well as working with the Ministry of Justice to develop specialized commercial and tax chambers in Georgia to deal with high value and complex commercial disputes. We have also worked extensively in the field of corporate restructuring and assisting foreign investors in completing their investment obligations.
Has interaction with the government gone smoothly?
Nicola: We work closely with the Georgian government and we see how open and transparent they are. I always tell my clients, especially foreigners, that there are very few taxes in Georgia and, to the extent that you comply with your obligations, investors will run into very few problems.
There has been an increase in foreign investments in Georgia due to the simplified tax systems. Are there any drawbacks to this?
Nicola: Are there shortcomings? Yes. Does the government know this? Yes. Should it be simplified? Absolutely. Should the implementation of tax audits be reviewed? Absolutely. Are steps being taken? Yes. It is interesting because some of the findings show that it is not so much the tax code, but the efficiency and the implementation of audits that need to be reviewed. Most of our clients have no problem with being audited or reassessed (if they have to pay). However, they want to make sure that it’s done within a short period of time, which takes us to the real issue: how should it be reformed?
Archil: One of the main problems which foreign investors have faced in terms of taxes is the audit process and the process of appeal for any tax liabilities which involves a long wait. The GoG has taken several initiatives to simplify this process and make it quicker; they have introduced special systems within the revenue services in the Ministry of Finance. The GoG agrees with the business community that it needs to set up a special tax court which won’t consider all the tax claims, but would consider taxes that are above a certain threshold. The idea behind this tax court is to have specialized judges with specific experience in tax so they can decide cases quickly and professionally. This can be a huge relief for businesses because it prevents long tax disputes that drain the resources of companies and basically slow down the future development of businesses.
Have you noticed any major growth in Georgia’s legal market since 2012?
Nicola: What we’ve seen during past years is that investors are becoming more sophisticated. More and more global and international players are coming to Georgia, which is a good thing. However, Georgia does not live in a vacuum. There is a currency crisis throughout the region and there are external shocks from a regional perspective, but even within a difficult regional environment, Georgia is still growing. Should it grow more? Absolutely, but in terms of the legal market we see continuous growth.
What are the key challenges in terms of operating in the Georgian legal market?
Nicola: It’s a relatively small market, but competitive. There is a growing number of local law firms, and in terms of the talent pool we are quite lucky that lawyers in Georgia are well trained and speak many languages, so we—Dechert—actually see Georgia as a regional base for future growth. We really like doing business here and find it a good and easy place to do business. We think it’s a place with very talented individuals and huge potential.
What about the company’s future plans?
Nicola: We have developed a model for organic growth with some universities; a good model where we take students and train them as trainees and then promote them to the junior associate level. These programs have worked well for us and we intend to continue in this respect. We’re also very proud to have been the lead lawyers and lead negotiators for the GoG on key infrastructure project. It is good experience for our team. We’ve been involved in the negotiation of the Tbilisi International Airport BOT as well as the Anaklia Black Sea Deep Water Port project.
Archil: When we talk about developments in the legal market, we note that more and more sophisticated investors are coming into the country who require legal services that are up to international standards. One of the best ways to upgrade the legal services provided in the country is to draw on experience from our offices globally. Almost every deal we worked on, we’ve done so together with our international offices from London, Dubai, and Paris which means we’re trying to bring standards which are acceptable and widely employed in those jurisdictions. The substance of law is Georgian, of course, but as in every service field there are certain standards which the country needs to be aware of; this also helps other law firms as well, because when we compete, we also learn from each other. The standards and experience we bring are not only beneficial for our company but for the entire Georgian legal market.
How do you see the next five years in Georgia?
Nicola: We are optimistic. The number of infrastructure projects is on the rise which means exciting and quality work for law firms. We are also seeing a growing interest from private equity funds for Georgian companies. We are therefore looking forward to growing our practice with the growth of the country!
Natia Liparteliani