“I am passionate about my work. Everything I do today affects my country’s tomorrow”
9 June 2021
The article is published in Yurydychna Gazata
Oleksandr Ilkov, Partner at Hillmont Partners, is confident that GR is developing in slightly different directions in Ukraine than in the world. In his interview with Yurydychna Gazeta, he spoke about the regulatory practice, GR and lobbying, why this area is becoming a trend in the market, how interaction with a client takes place, as well as about the team’s successful cases.
– Oleksandr, you are a well-known expert in GR. What has caused the professional interest in this practice?
I believe that everyone should be engaged in work where he can excel professionally. Previous work experience has given me the opportunity to develop myself in this practice. I have been working in governmental authorities for about 10 years. It has enabled me to understand how state institutions work, how decisions are made, how properly communicate a position so that it is perceived by a politician or official. My separate stage has been a rule-making activity, which is very important component of regulatory practice.
There were other factors as well. Thus, when I worked in governmental authorities, we had a working visit to Washington, where we had meetings in Congress and the US Department of State. A separate item on the program was a meeting with some lobbying companies. Then I became aware of the established practice in the USA, when former congressmen and the White House officials, after completing their civil service careers, started working in lobbying firms, because there they could effectively use their previous experience.
Through our joint efforts, businesses and the state are able to change the imperfect “firmware” of the local legal and reputational landscape for the better.
I must say right away that my transition from the civil service to business hasn’t occurred in a smooth flowing manner. Over the past 5 years in the civil service, I have been dealing with issues of constitutional law, so it has been quite difficult to reorganize myself on new topics of agricultural business, retail, FMCG, etc.
– Why is the legal market’s interest in GR growing?
GR is developing in slightly different directions in Ukraine than in the world. There has been a prevailing tendency to create specialized GR-companies that work exclusively in this field up till now. In Ukraine, the GR practice has been initially formed by specialists working in the field of public relations. It has come out of PR, rather than the legal business. In general, even now in Ukraine there are very few companies specializing exclusively in GR, the market is developing through the creation of separate practices in law firms.
There is also a logical explanation for this, since the legal market in Ukraine is sufficiently developed, and there is a business demand for GR services. Obviously, many law firms in the course of their activities realized the necessity for creating a separate GR practice, since they have expertise in many fields requiring state regulation.
In the course of providing services to clients, very often there are systemic problems of the regulatory field that require solutions at the level of interaction with government agencies. These prerequisites have provoked such a boom in the GR development based on Ukrainian law firms. Therefore, GR within the classical law firms, in my opinion, is more focused on regulatory practice. Of course, this is the strength of lawyers, including ours.
– How has the demand for practice services changed over the recent year? Is it increasing or remaining stable?
If we are talking about foreign clients, including representative offices of transnational corporations in Ukraine, the involvement of external GR-specialists has already become a rule for them. I believe this trend will continue in the future. Moreover, the national business tends more to the issue of advocacy for specific projects, often without any understanding what classic GR is and value of this product. Therefore, it usually applies for services in case of a specific problem, the solution of which requires cooperation with governmental agencies.
However, cooperating with Ukrainian business we have managed to go beyond such vision of GR, and as of today we have been already working with some clients on a more classic scheme, which allows not only to respond to a problem that has already arisen, but also to introduce a system to identify such potential problems and prevent possible negative consequences for business at earlier stages of the regulatory process.
– Do you support the adoption of draft laws on lobbying and regulation of this activity?
Currently, I do not see any necessity to adopt a separate draft law that would regulate the issue of lobbying. The laws are intended to regulate a particular area of public relations. As of today, this area as a separate business is not developed enough to adopt special regulation in Ukraine.
Moreover, the draft laws on lobbying, which I have reviewed, have conceptual and systemic shortcomings and will hinder the development of public relations and civilized lobbying, create artificial obstacles, and not contribute to the formation of a civilized market.
In my opinion, today we have enough legislative mechanisms that prevent unscrupulous corrupt practices in this area. If it is necessary to further regulate certain issues, this can be done by amending the current legislation. It is important to understand that in addition to business, many other entities (business associations, public organizations, etc.) interact with governmental authorities.
It is known that they are among the most active critics of legislative initiatives that are being considered in the Ukrainian parliament. In turn, we are going to work on a separate area – creation of ethical standards in the market, which will be developed and approved by its participants.
– GR and lobbying – what is the difference? Very often GR is identified with lobbying. Is this true or not?
GR is a broader concept than lobbying. One of the GR components is or may be lobbying (advocacy). Proper construction of a GR practice involves much more tools and is not limited to lobbying. We also offer our clients a system of regulatory monitoring, which gives the opportunity to clearly understand what changes are currently being discussed or developed in public authorities. For some companies we have introduced services such as political monitoring, which is important in Ukraine, given the changing political landscape. As a rule, such changes have a very sharp effect on the legislative field, which also changes depending on the political situation.
– How do governmental agencies react to the companies’ desire to promote their interests in such a way? Is there any opposition from governmental agencies, or, conversely, is there any understanding that this practice is developing in Ukraine?
We always organize communication with governmental agencies solely in the interests of the clients we work with, business and the market. This business communicates with the state, and we are already acting as consultants who know well how to properly organize this communication. After the Maidan revolution, it reached a qualitatively new level; businesses had the opportunity to convey their position. Moreover, they got the opportunity to promote their own initiatives.
Since 2014, we have seen a powerful surge in interaction between business and government. There were two key trends that coincided and positively influenced this interaction. Firstly, it is the state’s proclaimed course of business deregulation. Obviously, this process could only take place within the framework of the dialogue, because no one understands better than the business itself in which areas it has more regulatory barriers and experiences difficulties in relations with the authorities. The business initiated and clearly indicated the processes that it is necessary to change.
Secondly, it is the implementation of our European integration aspirations and, accordingly, the process of bringing Ukrainian legislation closer to EU law. The expertise of large international business, which operates in many markets, in this matter, of course, was much more powerful than in government agencies, so the state was interested in business helping with its expertise, sharing best practices and experience on how this or that field of activity regulated in the EU.
– How much time do you spend on a certain project?
It is difficult to answer this question unambiguously, because we have different cases. We have long-term projects, which, as a rule, relate to systemic reforms, and their implementation may take several years. In particular, the process of reform in the field of agricultural cooperation has taken almost 5 years from the idea to the adoption of the law by the parliament, and we have been engaged in the taxi reform for a long time. Due to the deterioration and imperfection of legislative regulations, this market has been mostly “in the shadow” for a long time.
On the other hand, over the last 2 years, the so-called “turbo regime” of the new government has significantly reoriented classical processes in regulatory practice. Such tools as working groups or discussions in community councils often don’t work, keeping up with the pace with the intensity set by the authorities. This often requires a short time to be included in the processes, because the time for project development and decision-making has been greatly reduced.
– How do you interact with the client? How is a common position created?
Our communication with the client from the start of negotiations on possible cooperation and throughout the period of interaction is characterized by direct and frank communication. Otherwise it doesn’t work.
We have to understand the value of the initiative for the development of both business and the state, because we have to break down the tasks into concrete steps, argue the logic of actions, risks and consequences for all participants and observers of the innovation process or change established principles. Our team is strong in providing practical tools to minimize or fill the gap that exists between the letter of the law and its actual application to a successful economic and reputational relationship on both sides.
To talk honestly, this is a long and painstaking process. By the time the cooperation between government authorities and business enters an effective stage and the project acquires specific terms and positions, we independently generate and conduct a lot of dialogues, work with polar beliefs, inspire and push forward when there is a risk of going down to an ascending point, and the main thing is that we keep control over the ethics of relationships. The start of such a synergy is the best reward for our efforts.
– How do you assess the development of GR practice in the near future? What are the challenging moments in its development?
I feel confident that the GR practice has sufficient potential for development in Ukraine, primarily by attracting national business. At the same time, the GR practice, unlike other practices in the legal business, has a number of features that should be taken into account. I will give you some examples.
Firstly, it is a limitation in the client’s choice. Unlike litigation or corporate practices, you can’t work simultaneously with 2-3 clients from the same industry, as there will be a conflict of interest. Secondly, there is a certain limit of projects that you can run at the same time without losing the quality of the services provided.
Indeed, unlike other practices, this is a 24/7 job: you must constantly be aware of what is happening in a particular industry. Every morning begins with the agenda of the Verkhovna Rada, meetings of the Committees, analysis of new regulatory acts registered on the websites of the governmental authorities. In particular, there is another important question concerning this. Trying to develop our practice, we have faced difficulties in building a team that will be able to successfully implement the complex projects we are working on today. Perhaps we set overly high requirements for such specialists (Oleksandr smiles – editor’s note).
Our team is directly involved in the process of improving the legislation of the country in which we will live tomorrow
– Tell us about the most interesting case from your experience.
I would like to note our work within the framework of the consideration and adoption of the Law of Ukraine “On State Support of Investment Projects with Significant Investments in Ukraine”. It is an initiative that has been declared by the new government at the start of its work, for which business has been waiting for a long time.
Actually, when the text of the relevant draft law appeared, we received an unexpected surprise: the extractive industry was excluded from those potential areas that could count on state support.
We are accompanying a number of major investment projects in this area, and during the finalization of the draft law in the parliament to the second reading we have managed to break the stereotypes that it is only oligarchs who make money in the extractive industry in Ukraine; and convey to parliamentarians the position that, in fact, new greenfield projects in the field of extraction, which will bring modern and environmentally friendly production technologies to Ukraine, require state support.
– Is it necessary for a lawyer who specializes in the GR practice to have work experience in government agencies?
If we talk about the formation of a full-fledged GR practice, in my personal conviction, the team must have a specialist with work experience in governmental agencies, then we can assume how the other side thinks, what arguments it accepts, and which expertise it expects.
We try to implement projects in such a way that a certain synergy occurs, so that the product with which we apply (represent) satisfies not only business, but also the state and society. One of my colleagues joined us from the American Chamber of Commerce in Ukraine, where she headed the legal policy department, but never worked in government agencies. Of course, the experience she got at ACC is very useful for the whole team.
– A successful lawyer in GR practice is…..
This is someone who is able to go beyond the templates and conventional understanding of the classic legal business. Lawyers mainly work with the current legislation, and in GR practice, we work more with the promising one, that is, with the shortcomings of the current one, transforming it into a perfect one.
Quite often, lawyers, accustomed to delving into the problems of the current legislation, find it difficult to go beyond it. Moreover, a successful GR lawyer must be able to work simultaneously with several diverse projects and be constantly aware of what is happening in a particular industry. And, of course, the lawyer must be stress-resistant, because many processes depend not only on a specialist who can do his/her job with high quality, for example, prepare a high-quality draft law and convey its goal to parliamentarians, but as a result no one can guarantee its adoption.
– What motivates you personally in your work? What are you like in your daily work?
I can talk about two things without any pathos. First and foremost, I really love the work I do, because its outcome is future-oriented. Now our team is directly involved in the process of improving the legislation of the country in which we will live tomorrow.
Second, I do not just believe, but I know from personal experience that by joint efforts business and the state are able to change for the better the imperfect “firmware” of the local legal and reputational landscape. Despite the low-level trust from business and society, there are talented and motivated professionals in the public sector who are ready to produce decent solutions to national regulation with professional enthusiasm. It is a real pleasure to work with them, to combine experience, to deliver wise products.
In my daily work, according to colleagues, I am concentrated and persistent, excessively attentive to details and wording. At the same time, I like witty precise jokes and subtle irony. I divide the day and energy between inspired negotiations and formal meetings; I work with risks and opportunities, giving meaning to the letters in important documents. Strong coffee is an integral attribute of my morning monitoring of the information and regulatory environment of Ukraine and the world, but family, love of books and sports switch perfectly after a busy day.
– Do you have any professional taboos?
Yes. I have zero tolerance for corruption. We are constantly working with many multinational corporations that have introduced their own strict compliance policy and anti-corruption practices.
Each of our contracts, which provides for such a component as advocacy for the promotion of changes in legislation, contains a clause that we cannot guarantee the achievement of a positive result, since its adoption lies in the plane of making political decisions that we cannot influence.
We do our best to communicate our position to government agencies and prepare perfect legislative proposals, but we can never guarantee that politicians will make a positive decision that will meet the interests of business.
In this sense, I have the identical position with the law firm Hillmont Partners, where we are developing our strategic communications practice. The knowledge that the company does not tolerate unprofessional practices and does not base its work with clients on unethical actions led to the beginning of our cooperation in 2019. The position of the company remains unchanged today; we actively generate work and produce products in the system of common values and taboo.