A View from Brussels

Traditionally, law firms in Brussels concentrate on EU competition law work. Much of this work has been the filing of merger notifications as support to major corporate departments in countries such as the UK, the USA, Germany etc. There have also been a number of successful EU boutique firms which have carved out niche practices in Brussels, in areas such as anti-dumping law.

Over the past few years the environment has started to change. Despite the large number of mergers and acquisitions taking place, the market for competition law work has become saturated. This coupled with the fact that more and more legislation emanating from the EU has led to diversification of a number of law firms into an increasing amount of regulatory work.

Much of this is in regulated sectors such as environment, energy and telecoms. It is also a recognition that in order to have any influence in the Brussels law making process, law firms need to couple their traditional activities with a public affairs role in imitation of Washington firms.

The proactive approach taken by Brussels lawyers in legislative process has been effective in developing areas of law such as e-commerce. This is because law firms can provide much more clout and intellectual fire power than the traditional small public affairs shops. Why? The EU is fundamentally an order based on a legal act, ie the Treaty of Rome, so while there is a major political dimension, having a mastery of the law provides a strong base for effective lobbying and a proactive approach to draft legislation.

Brussels itself is only half the story. For law firms to mount effective EU public affairs and regulatory practices they also need to be active in national capitals. As law firms continue to concentrate in alliances throughout Europe, they will become involved in regulatory and lobbying work, not only in Brussels but throughout the 15 national capitals. This will add a new dimension to the law making process. Also, once clients begin to see the effectiveness of law firms in this area it will be lucrative in terms of fees, partly because public affairs is perceived as a positive activity within companies.

The expanding role of the European institutions and particularly the more proactive role being taken by the European Parliaments, along with the creation of global institutions such as WTO, is leading to a growing amount of international regulatory work for Brussels' offices. They are able to provide a vital hub for their colleagues in the same way as offices in Washington provide regulatory and public services to their colleagues in other US cities.

The Brussels offices best placed to offer these services are those which form part of law firms with international networks. This is due to the fact that Brussels' offices should be used to lead concerted public affairs lobbying campaigns on draft legislation both there and in other European capitals.

It is clear that firms which choose to adapt their traditional methods of working to their new political/legal environment will have very lucrative practices. However, what is also clear is that law firms which fail to grasp the nettle will find they are losing major multinational clients who are demanding that their lawyers be proactive rather than reactive. In short the outlook for Brussels' offices able to respond to the dynamic challenges set by the movement towards further political integration in Brussels are excellent. However, those which fail to respond to the challenge will find themselves falling by the wayside.

What is evident is that civil servants in EU or national institutions do not understand the commercial realities of the law. Many civil servants tend to have an anti-business attitude and will ally themselves with consumer groups who want ridiculously high levels of legislation. Another frightening dimension is the fact that academics are given the same say in EU hearings and debates as representatives of major sectors of business. In the past, business has been reactive rather than proactive in these circumstances.

However, as more and more firms adopt a public affairs role the business lobby finds it gains greater intellectual fire power and then is able to sweep away many of the arguments put forward by civil servants and other interest groups by using practical examples as to why they will not work.

Mike Pullen is a partner in DLA's Brussels office.