||As the Russian experience of transition to a market economy shows, law can be applied as a spearhead of reforms. However, formal law, which changes too quickly and does not correspond to informal rules of society, may not be applied in practice. Transition is not the last huge challenge for developing Russian law, since there are now additional challenges, which all the national legal systems in the Arctic are struggling with. These challenges are globalization, climate change, multi-level governance and implementing the ecosystem approach to law. The Law, however is an inflexible system by nature. As system theory explains, law is a closed subsystem of the state and lawyers function as its efficient gatekeepers. The closed nature should keep law coherent benefit legal certainty, but it can also form a serious obstacle in creating modern law, which could protect the vulnerable Arctic and enable solving problems, which do not recognize borderlines of national states. Since attempts to modernize law and make it more evolutionary and responding to modern challenges have failed, national law is loosing at least parts of its earlier self-evident role in regulating to private governance. The growing amount of global standards and agreements with global and local stakeholder groups is an example of the strength of private governance. Companies as drivers of economic activities should proactively navigate in the pluralistic environment of different private and public sets of regulation and multi-level governance. They can avoid conflicts and settle disputes with skillful choices of application of different sets of regulations in cooperation with stakeholders.