Russia's standing on the world stage was given a considerable fillip in its hosting of the G8 meeting this year. Having overcome the turbulence of the 1990s and the trauma of the 1998 crisis, Russia now finds itself a much more stable country, both economically and politically. With this stability comes the inevitable growth in investment – deals increase, and a rise in the need for law firms with Russian expertise follows.

The last few years in particular have seen Russia experience continuous and steady growth, and its participation in the globalisation of the world economy is deepening. Its role as a global energy supplier is set to grow significantly (world demand is currently predicted to double by 2030), its companies are increasingly borrowing on international capital markets as well as investing substantial sums abroad, and foreign direct investment is still growing. All in all, this has meant that close trade relations with Russia are proving attractive to its neighbours – in particular, Norway, Sweden and Finland. Increasingly more and more Scandinavian law firms are opening offices in Moscow and St Petersburg to take advantage of these developments.

Scandinavian-Russian relations have a long and eventful history, and both parties have huge vested interests in the Baltic and Barents Sea areas. These relations have warmed considerably over the past 15 years. Trade and business between the two blocs experienced a huge growth spurt in the mid-1990s, and the presence of foreign investors and, subsequently, law firms has been of structural importance for the Russian economy and business. This is something that the Russian Government is still keen to develop, and in July this year it passed a law on Special Economic Zones (SEZs). The SEZs will be developed under the guidance of Singapore, whose trade and industry minister Lim Hng Kiang signed the deal with Russia's minister of economic development and trade, German Gref, in August this year.

Although the initial growth spurt has since stabilised, stagnation seems unlikely as certain sectors, such as energy and real estate, continue to grow – the recent revelation that Moscow is now one of the world's most expensive cities to live in is surely a sign of this.

Russia's economic growth has played out differently for each Scandinavian country and its respective law firms. On the whole, Scandinavian-Russian relationships have favoured the international firms that have the capacity to handle cross-border deals, especially on big-ticket M&A deals; Russian firms tend to have a stronger local presence, coming into their own in areas such as litigation and tax, where local law dominates.

Thomas Michelet, partner at Norwegian firm Selmer, points out that even when international firms have their own Russian offices, there are still instances when they use local counsel at independent firms.

Selmer has a group of specialist lawyers who deal with Russia-related business, of which Michelet is a member. The firm is also one of the official sponsors of the Norwegian-Russian Chamber of Commerce; there is clearly much to gain.

This is especially true of the energy sector. Despite the fact it is seeking to develop its economy and gradually steer it away from an overdependence on oil and gas, Russia still feels there is much scope for development and growth in this area.

It is increasingly looking to develop its offshore capabilities in crude oil production, especially in the Arctic, and this has led to its increasing cooperation in the Barents Sea with Norwegian companies and the Norwegian Government. Russian president Vladimir Putin signed a joint declaration between Norway and Russia when he visited Oslo in 2002, and several co-operation programmes have followed.

Such ties are bound to bring with them major advantages for law firms with offices in both countries, such as DLA Nordic, part of the global DLA Piper brand, and Selmer. According to DLA Nordic's Eli Folkestadaas, DLA Piper initially took over Ernst & Young's operations in Russia in order "to cope with the quantity of work" coming their way resulting from the "large trade growth" that Scandinavia was experiencing in its relations with Russia. It is proving, however, that this was just the beginning.

For example, the Russian Government has recently decided on a new Barents Sea project and has set up an open contract race for international oil companies. The results are as yet unknown, but Norway's two largest oil companies, Statoil and Norsk Hydro, have both applied. Folkestadaas adds, this is "absolutely huge" in terms of the amount of business it could generate in Norway, "as successful companies will ultimately bring in other suppliers". In terms of promotion of the venture, "it goes to the highest political level".

The famed Russian business class is also providing opportunities for law firms. With Russian business in general having evolved and matured, foreign direct investment has become more of a bilateral affair; there is an unprecedented amount of liquidity in the market, thanks in part to sky-high energy prices – investors are inevitably looking outside Russia to further increase their capital.

Per Magnusson, managing partner of Magnusson, a Swedish-based international law firm with an office in Moscow, points out that Swedish firms are seeing an increasing tendency among Russian clients looking to invest in Swedish real estate, in particular commercial real estate, and even Swedish technology companies. This, Magnusson says, is still very much in its infancy, and "it is difficult to predict" how this might pan out, but "logically speaking, it would seem likely to grow".

As Russia's economy becomes more sophisticated and integrated with the rest of the world, the need for a strong local presence is a major issue for international law firms, especially as Russia's homegrown firms are rapidly gaining relevant international experience and knowledge, and are looking to harness some of this business. Only recently, Pepeliaev Goltsblat & Partners, for example, relocated its offices from Moscow to St Petersburg in order to take advantage of the massive growth and expansion of business between Russia and its immediate neighbours, especially Finland.

With the exception of litigation advice, Russian clients are generally attracted to established European and international brands, which they trust, and which have a strong presence beyond Russia's borders. London's magic circle firms, notably Clifford Chance, have recently been investing in London-based Russia desks, to advise Russian clients based in London and also to deal with the instructions to be won from the large volume of foreign direct investment coming through Russian clients.

The IT and telecoms sector is also enjoying a period of rapid growth in Russia. This features heavily in Russia's relations with Finland, which is its most important trade partner within the European Union. While Russian exports to Finland constitute oil, gas and raw materials – in fact, Russia is Finland's only source of gas – Finnish exports to Russia tend to constitute more information- intensive products, such as electronic and basic manufactured goods. Helsinki's law firms have, like the London firms, invested in Russian practices that are able to advise Finnish clients on investing in Russia. Under-standably, a lot of the advice required is shipping-related – an area in which Finland's law firms already boast considerable expertise.

However, in his article on Finnish- Russian economic relations, Markku Kotilainen of the Finnish Economic Research Institute points out that despite the fact that Russia is "a more important export and import country for Finland than for the other EU countries", Finland needs to diversify its foreign trade and investment with other countries while continuing to develop its relation-ship with Russia.

This refocusing may be a general trend for, while there is still a lot of potential for more trade and more business to develop between Scandinavia and Russia, China is increasingly gaining the limelight. Magnusson says the Chinese business community as a whole has proved to be "far more fast-paced and aggressive with their investment within Europe than the Russians". Consequently, Magnusson has now opened a China desk in Sweden, headed by Wenpeng Niu.

Scandinavian-Russian relations are set to continue to be productive and mutually advantageous in the foreseeable future. Some countries have more in the pipeline than others, but as Russia continues to grow and mature as a market economy, new opportunities are certain to arise.