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14 April 2014
The only people in Brussels who are busier than top competition la-wyers are headhunters trying to poach top competition lawyers. The European Commission (EC) has gone into overdrive since the GE-Honeywell decision, blocking mergers and acquisitions at an unprecedented rate and keeping Brussels' lawyers busy.
It is an open secret that a new wave of US law firms, mesmerised by the regulatory frenzy, wants to move into the city on the back of high-profile lateral hires. A sharp drop in M&A activity raises questions over the timing of such ventures, but the most innovative developments are coming not from across the Atlantic, but from the East.
Polish firm Wardynski & Partners last month became the first law firm from the EU candidate countries to open a Brussels competition practice. Wardynski is one of Poland's two largest domestic firms that have survived in the face of a foreign invasion. In anticipation of EU enlargement, the firm now finds itself in exactly the same position as US firms considering a Brussels move - its clients are demanding representation in the EU's legal capital.
Foreign direct investors are drawn to Poland primarily by price - cheap land, cheap labour and cheap, abundant minerals. Despite the price advantage, though, they are not drawn to Polish law firms. With the country's post-communist legal system still in its infancy, most foreign investors plump for the likes of Clifford Chance Pünder or Weil Gotshal & Manges - firms that can back up quality Polish legal advice with broader European expertise.
What Wardynski does have is an excellent stable of domestic relationships. The firm has crucial government contacts and many clients are former state-owned monopolies or companies in the privatisation process. Economic factors dictate that there may be little call for transactional competition advice because M&A activity by Polish firms will not excite much interest from the EC. Wardynski's clients, though, certainly need help on state aid and sector-specific competition rules, particularly high-profile sectors such as telecoms. In the run-up to enlargement, these clients want immediate assistance on how to structure their businesses to comply with EU law. They also need someone to lobby on their behalf as the government negotiates the accession treaty.
A glittering Brussels office on Avenue Louise was not an option for Wardynski. An obvious route to expansion was a tie-up with a law firm with EU expertise, but such a move might risk a partner that would love to swallow a domestic Polish firm whole.
So into the breach stepped magic circle set Brick Court Chambers, which has been established in Brussels for more than 10 years.
David Vaughan QC met Tomasz Wardynski a couple of years ago and the two networked through the Lord Slynn Foundation, a UK charity. The organisation arranges for judges and lawyers in the candidate countries to get an EU law education from UK barristers. Brick Court will provide Wardynski with a Brussels home and its tenants will arrange educational programmes for Poland-based Wardynski lawyers. An immediate reward for all this philanthropy is that the set will get referrals from Wardynski, but there is a more attractive long-term prize: both Wardynski and Brick Court are looking for tie-ups with lawyers from other candidate countries; these could give the barristers EU law referrals from new members and Wardynski the type of links more attractive to pan-Eastern European investors, which may need advice about more than one jurisdiction.
Success of the Wardynski venture is contingent upon the powers that be in the EU actually letting Poland in. Despite progress on issues such as the environmental chapter, Poland is still at the back of the first wave, far behind stars like Hungary and Slovenia. Wardynski, however, is tooling up for EU expansion in an innovative, low-key, low-risk manner. Furthermore, the Polish government has tied its own colours to the EU mast - should Poland not accede in 2004, it will not be Wardynski that will be the most high-profile casualty.