As Legal System Blossoms, Russians Belly Up to the Bar : Law: After decades of a totalitarian system, fledgling attorneys are capitalizing on confusing new statutes.

Viktor Zhdanovich, 30, green-eyed and dapper in a rust-color flowered tie, is already holding a phone to each ear when the third one rings.

Before him on the semicircle of his desk lies a leather-bound calendar showing the entire day penciled in with nonstop meetings and calls. He has to put together a loan agreement, do a bit of real estate, counsel some foreign clients on business deals, confer with a publisher . . .

“We work 24 hours a day,” Zhdanovich says. “This is the time to get off the ground, and a lazy person . . .” Another phone interrupts him and he grabs it. “Hello?”

In the United States, Zhdanovich would be just another garden-variety attorney busy racking up billable hours, one among legions expected to total 1 million by the year 2000, the kind inspiring lawyer-bashing jokes.

In Russia, he is a rare and promising new phenomenon: a real, problem-solving, Western-style lawyer in a country that never needed many lawyers because it had few laws and paid little attention to them anyway.

During the Soviet era, “the system was largely totalitarian, and lawyers tended to be a mere formality pretending to defend citizens’ rights,” says Alexander Olefirenko, chief of foreign cooperation at Russia’s Justice Ministry.

Now, as Russia builds its post-Communist society, the country is racing to construct a legal system sturdy enough to support democracy and a market-based economy, the “law-based state” that former Soviet President Mikhail S. Gorbachev preached as the alternative to dictatorship.

Its progress is patchy as it struggles with the holes in its old laws, with a flood of new laws that sometimes conflict, with a shortage of high-powered lawyers and with a general mishmash of new and old rules that looks highly uninviting to the investors whom Russia so desperately needs.

“We have to create the legal system for the market on the run,” says Veniamin Yakovlev, chief justice of Russia’s new Supreme Arbitration Court. “In the West, you had centuries to create it. Here, we moved to the market first and then started to create it.”

The legal chaos that has ensued would daunt many a Western member of the bar.

For a simple swear-and-stamp visit to a notary public, Russians often have to wait for weeks, showing up at the notary’s office every morning to retain their place in line. Courts are so badly backed up and so unfamiliar with capitalist-style business disputes that the government is urgently drafting 2,000 judges for its new arbitration court system.

And the Supreme Soviet passes major laws with such speed and fury that one legislator had a slogan: “Not a day without a law.”

Brand-new laws on bankruptcy, property ownership, foreign investment, taxes, mortgages and trademarks, all of them monumental projects, whiz onto the books. A new Russian constitution is expected this spring, and work is continuing on a new criminal code. Yakovlev says the need is urgent for a new civil code as well.

Before the Gorbachev era, the country relied so little on laws that in 1989, when the current elected Legislature took office, Olefirenko counted only 150 broad laws in force--otherwise, the Soviet Union was being run by 45,000 government directives, many of them kept secret from the very citizens they affected.

These days, for lawyers like Zhdanovich, the problem is no longer lack of respect for the law. It is simply keeping up with what the law is.

“It’s very complex in Russia to find needed laws,” Zhdanovich says. “The Parliament turns out so many and publishes so few that it’s probably not like this anywhere else in the world.”

At the firm that Zhdanovich heads, De Jure Counselors at Law, two full-time workers do nothing but compile the firm’s own database of recent important laws.

Even when they have managed to get the basic texts of the laws, Russian attorneys must also deal with legal tangles of dueling provisions.

“It’s terrible,” says Alla Zhivina, a lawyer and deputy director of Moscow’s collegium, the rough equivalent of a bar association. “They often pass laws that not only contradict each other but contain contradictions within one law.”

Along with the political battles that produce faulty laws, Zhivina blames the lack of legal training among the lawmakers of the Supreme Soviet. In sharp contrast to the U.S. Congress, only a few of the 252 deputies are lawyers. “It’s a problem when there are no lawyers among lawmakers,” she says.

The legal swamp gets exceedingly deep at times.

Alexander Papachristou, an attorney for the international law firm White & Case and probably the most senior U.S. lawyer in Moscow, recalls the classic moment a couple of years ago when the Russian Federation declared that all its laws were supreme on its territory. Suddenly it was unclear which laws--Russian or Soviet--held sway across the land.

Zhivina has run head-on into conflicts between two laws on land ownership. Property regulations seem to reside in perpetual murk as billions of dollars’ worth of state assets shift to private ownership.

“Moscow is unique in real estate,” Zhdanovich says, “because the property all belongs to nobody. And so lots of arguments arise, because when something is nobody’s, a lot of owners suddenly appear.”

Yakovlev says his arbitration judges are accustomed to disputes about contracts but that much of what they face is “absolutely new: arguments about property or the definition of property or unfair taxes or passing titles.”

With about 70% of the rules that his judges used to depend on in Communist-era economic disputes now obsolete, he says, “there’s often just nothing to lean on.”

As a Western-trained lawyer, Papachristou finds that Russian laws also suffer from a tendency to be brief and vague, leaving broad latitude for arbitrary decisions by the bureaucrats who enforce them.

Rooted deep in Russian tradition, the habit of relying on power and bribery rather than the written law spawned an old saying frequently quoted by Russian legal scholars: “The law is like a harness: Wherever you want, that’s the way you can turn it.”

“What’s most needed here,” Papachristou says, is “a sense of regularity and predictability. That’s what Russia needs if business is going to boom. They have to get officials out of it so things can happen quickly.”

As the law stands, Russia offers little comfort for lawyers who want to be sure of their ground. But even so, the legal profession itself is enjoying a new boom in popularity.

Zhivina estimates that Russia already had about 100,000 lawyers--except that most of them are not actually lawyers but “jurisconsultants,” in-house counsels to big factories and companies who bear little resemblance to their Western counterparts.

In all of Russia, she says, fewer than 20,000 lawyers are members of a collegium. And in major Siberian cities like Krasnoyarsk, there is often only one lawyer for every 10,000 people. Underpaid and in danger of following their clients to jail if they took a wrong ideological step, Soviet lawyers remained a small, defensive lot.

“There’s been a low legal culture here,” Zhivina says. “In America, everyone knows that before you undertake certain deals, you consult a lawyer. Here, everyone thinks they can be their own doctor and their own lawyer.”

Olefirenko says that appreciation for lawyers was so low that “businessmen think you should pay them about as much as you pay a good, pretty secretary.”

But all that is changing. New law schools are springing up across Russia, Olefirenko says; some of them are even con jobs that offer invalid diplomas.

Criminal law, somewhat liberalized but much the same as in Soviet days, has little new drawing power. Commercial law, however, is sizzling, he says, with up to 90% of graduates now going directly into business or independent firms instead of the district attorney offices and state-owned enterprises that used to be their mainstay.

At De Jure, the oldest of the nine senior lawyers is 33, and Zhdanovich commands an hourly fee of $100 from foreign clients--the equivalent of about six months’ salary for an average worker.

The firm now services 80 or 90 clients, Zhdanovich says, acting not only as consultants but as “managers and economists” for clients who might otherwise prove dangerously clueless about life in a market economy.

The phone rings again. Zhdanovich listens, humming understanding, and then explains: “So they want to buy 200 meters from you, and you’re a state organization and they’re a state organization. So to sell them that space you have to either get permission from the State Property Committee or hold an auction and see who wins. If you like, in general, we can propose the best procedure for you under current legislation.”

De Jure would prefer to have only a few, major companies as clients, Zhdanovich says, “but it takes 50 or 100 years to develop a reputation. Still, we hope that if things keep developing as they are in Russia . . . .” He breaks off again, this time interrupted by his own thought.

“Paulina,” he calls to a secretary. “Could you put me through to Sergei Trofimovich?”