Doing business with Russians

Ian Ivory offers his tips for success when doing business in Russia, where stakes can be high and powerful influences can wade in and change the dynamic...

by Ian Ivory
Last Updated: 09 Oct 2013
  1. Big boss or sidekick: Many Russian businesses are dominated by a few all-powerful personalities and they love to send a middleman to handle face-to-face negotiations. Make sure you know just how much authority the person you’re negotiating with actually has – don’t expect to agree everything with the person across the table.
  2. Avoid cheese-slicing: often you will win a series of early concessions from your middle-man only to find he’ll back-track on them once he’s spoken to the real power-broker. Make clear that these points are part of a package and re-opening them re-opens the rest of the deal too.
  3. Good cop, bad cop: when you’re dealing with lots of different parties at the same time, it can be common for one person to appear very friendly and reasonable but argue that the other players will never agree to your suggestions however much he would like to. This is most common when the other players are not present and is a ploy to try to extract concessions from you. Stick to your position.
  4. In your face: most Russian businessmen don’t spend time on niceties, particularly when it comes to high-stakes deals. Don’t be intimidated by their overly aggressive approach, or take it personally. Keep your cool and make sure you’ve a good local adviser who can take the flak on your behalf and steer you in the right direction. 
  5. Brinksmanship: Russian businessmen are chess-players and like to apply pressure on their negotiating partners by letting the clock run down with issues still unresolved. Deliberately delaying paperwork is a common tactic. Don’t be afraid to get tough with them to resolve key issues and even call their bluff when necessary.
  6. Know the competition: you can often be one of several parties all bidding for the same business. Make sure you can’t be played off against your rivals by doing your research and understanding the relative strengths and weaknesses of your position.
  7. Last minute revelations: you can think a deal is done then suddenly your negotiation partner will reveal a new piece of information at the 11th hour. Don’t be shy about changing the terms of the deal to reflect this new information – you must protect your interests and not let these last minute surprises go unchallenged.
  8. Home advantage: the Russian government wants more international business deals conducted under Russian law – but the legislation is still not as comprehensive as English law, which is widely used internationally, in part because of the fairness and reputation of British justice.  Stick to English law where appropriate - you don’t want a dispute heard in a Siberian backwater. 
  9. Paper rules OK: five years ago when deals were being done at the drop of a hat in Russia, contracts were often pre-signed and emailed to people once contracts were ready to be exchanged. This left lots of room for error with the wrong contracts being used or loopholes left open. Now, insist on a ‘wet ink’ paper copy and read and sign every page.
  10. Cultural mores: face-to-face meetings and getting to know potential business partners personally is an important part of Russian culture, as it is across Asia. Sometimes this can lead to lengthy dinners and entertainment. Never be tempted to re-open business negotiations – save it for the boardroom and a clear head. 
Negotiation is an art not a science so there’s never a ‘right way’ to do it. While these points won’t guarantee you the best deal possible, they’ll give you a good start. And always remember the words of Michael Corleone in The Godfather: "It’s not personal, it’s strictly business."

Ian Ivory is a partner with Goltsblat BLP, the Russian practice of law firm Berwin Leighton Paisner. He has extensive experience negotiating in Russia.

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