aker & McKenzie opened an office in Kyiv in October of 1992, the first international law firm to open in Ukraine after independence. James Hitch, after 22 years in Chicago and nearly five years in St. Petersburg, became managing partner for the Kyiv office at the start of 2002.

Soon to retire and depart Kyiv, Hitch is reflecting on his sojourn through the legal alleys of the country, and on what his experiences there indicate of Ukraine’s trajectory and of what most people in Ukraine are counting on for their future.

When Hitch came to Kyiv, the firm had 18 lawyers. By the second half of 2008, the number peaked at 92. Then came the economic crisis, which took a toll on law firms at least commensurate with the setback to business. By late 2008, the firm was down to 52 lawyers, and its competitors were hit even harder. The lawyer count is now rising, up to 60, which may indicate improvements in the economy.

“In 2005-2008, we were in the busiest and best capital markets, with six Ukrainian IPO’s, and dozens of Eurobonds, with plenty of involvement in banking and finance, and with real estate,” says Hitch.

“Now much of that has slipped off, though there is some banking activity. What’s coming back strong is mergers and acquisitions with private equity investors, and dispute resolution. The terminations of directors bring employment work. Tax work – including civil and criminal tax litigation – and corporate liquidations of subsidiaries and representative offices are going strong.”

The global recession was not merciful, but the legal slip-and-slide, particularly the increase in mergers and acquisitions, shows business repositioning to move forward.

What would speed the recovery along and allow Ukraine to best fulfill its economic promise? Hitch’s observations are not unique in this assessment, but are typical of those from a number of observers. A strong effort to level out the playing field is essential.

Increasing the ability to rely upon the rule of law will have a tremendous impact. That applies to the implementation of law across all aspects of government, from the construction permit process throughout the courts.

Another milestone will be reached when foreign companies can freely acquire profitable Ukrainian companies without worrying if those target companies might bring along legal liability under US, UK or international law because of participation in corrupt government transactions.

US companies and, increasingly, companies from many other countries, are generally very strong in their due diligence to avoid this. When this concern abates due to government reform efforts, the country and its business community will slip into high gear. Most people observing the economic scene believe that companies positioned for these improvements in governance will have a big leg up when they come about.

But despite the need to address such matters, “Ukraine nonetheless is still attracting foreign entrepreneurs and multinational corporations because of the country’s tremendous assets and even greater potential,” says Hitch. “Ukrainians want to succeed – a major test for the Ukrainian business community and government is the 2012 Euro Cup (football matches) and all the infrastructure – roads, airline terminals, stadiums, hotels, restaurants – that still need to be built, improved, and finalized on time.”

Hitch believes the country is up to the task, which itself provides a new range of opportunity. “I am betting that all Ukrainians – including Ukrainian politicians in the Cabinet of Ministers, the Parliament, and the courts – will want Ukraine to look its best when the football spotlights are shining brightly in two years, so that there is transparency in all aspects of Ukraine’s political, economic, and social systems, and that, having passed this first relatively simple test, all in Ukraine will clamor for more of the same and will keep Ukraine on track.”