UK and US firms are battling for supremacy in Europe’s most promising markets after Saturday’s (1 May) expansion of the EU.
A survey by The Lawyer has found that, across the key Eastern European markets of the Czech Republic, Hungary and Poland, a handful of international firms are best placed to profit from the anticipated upswing in foreign investment following accession.
Linklaters, with 113 lawyers throughout Budapest, Prague and Warsaw, has invested heavily in the region in recent years, and now boasts the largest presence across the three cities.
Fellow UK firms CMS Cameron McKenna and Clifford Chance have 106 and 58 lawyers respectively.
White & Case blazed a trail in 1990 and now has 102 lawyers across its three major Eastern European offices, while Weil Gotshal & Manges – widely regarded as the premier firm in Prague – has 66 lawyers in the region.
The optimism across Eastern Europe legal markets is a counterpoint to the bleak picture in Asia, where firms including Camerons, Denton Wilde Sapte and Freshfields Bruckhaus Deringer are scaling down or axing their practices entirely.
While privatisation work is largely completed, international firms in Budapest, Prague and Warsaw are now advising on accession-related law, such as state aid and competition, as well as capital markets, private equity and M&A deals. Karel Drivenek of Weil Gotshal says: “Even without accession, there’s a wealth of private equity and M&A transactions with no element of government participation.”
Weil Gotshal last year advised Cesky Telecom on its $1.2bn (£679.2m) purchase of the remaining 49 per cent interest in Eurotel, while Allen & Overy acted on Cezky’s $675m (£382.1m) domestic bond programme, which was the largest Czech capital markets deal last year.
Consolidation in the Czech electricity sector has also ensured a steady stream of work for international firms, with White & Case advising CEZ, the dominant Czech electricity generator, on its $1.6bn (£905.6m) acquisition of six regional electricity distribution companies. Weil Gotshal advised the Czech government as vendor.
The picture is distinctly different from that of two years ago, when Clifford Chance, Freshfields and Lovells were all reviewing their Eastern European offices. However, Clifford Chance this year announced plans to consolidate its Prague office and is negotiating a lease on new premises.
Accession has also prompted a rush of cooperation agreements between indigenous law firms across Eastern Europe.
Partners across firms in new EU member states agree that accession will promote more competition among lawyers. But Tomasz Wardynski of Poland’s Wardynski & Partners welcomes the move. “I’m thankful for the competition,” he says. “It’s forcing us to develop and to think about strategy. Competition brings life into the legal market.”
Cyprus’s largest firm, Andreas Neocleous & Co, has almost 40 lawyers and four international offices in addition to its three Cypriot operations.
Other key local players include Chrysses Demetriades & Co, best known for its ship finance practice, and Antis Triantafyllides & Sons, whose clients include British American Tobacco and PepsiCo.
Malta is a tiny island with a large number of lawyers – although no UK or US firms have yet established a presence there. In recent years their numbers have spiralled because of the island’s ambitious aims: to become a clean, well-regulated financial centre, maintaining its position as one of Europe’s shipping capitals, and preparing the way for European accession.
The most significant firm is Ganado & Associates, which has advised the Malta government on all its major legislation in recent years, and often receives maritime referrals from City of London lawyers. It was also responsible for setting up Parmalat’s entities on the island. Other key firms are Camilleri Preziosi, AVMT Advocates and Fenech & Fenech Advocates.
Small, stable and prosperous, Slovenia is the only new EU member state from the former Yugoslavia and is still largely untapped by foreign investors and international law firms.
Jadek & Pensa is the premier firm in the market, boasting two of Slovenia’s leading names in Sreco Jadek and Pavle Pensa. The firm has advised on the few key foreign investment deals in the market, including the e880m (£592m) takeover of Slovenian pharmaceutical company Lek by Novartis, as well as Interbrew on its acquisition of a stake in Slovenian brewery Pivovarna Union.
Meanwhile, rival firm Colja Rojs & Parthnerji op dno last year became the first Slovenian firm to open an office in Belgrade.
The Baltic States: Latvia, Lithuania and Estonia
International firms have yet to establish their own outposts in the Baltic States, but several domestic firms have already established cross-border alliances.
Lithuania’s Lideika Petrauskas Valiunas & Partners, the most renowned Baltic firm, last month joined the Central and Eastern Europe Cooperation Agreement with Latvia’s Klavins & Slaidins and Estonian firm Lepik & Luhaaar.
Lithuanian corporate outfit Bernotas & Dominas Glimstedt already has an association with Swedish lawyers Glimstedt, while Latvia’s Lauris Liepa is linked with Finnish firm Borenius & Kemppinen. Firms in the market remain small. Lideika, the largest in the region, has just 32 lawyers.
Slovakia has flourished in recent years, becoming a vibrant younger sister to the big Eastern European centres of Budapest, Prague and Warsaw.
Bratislava, on the Danube, is home to a cabal of international firms that now dominate their indigenous rivals. Foreign firms have taken the pick of the privatisation work, but are increasingly advising on capital markets, derivatives and real estate transactions.
Linklaters, with three partners and around 20 associates, has the largest presence in the market.
Allen & Overy, with one partner and six associates, advises all the major local banks on capital markets and derivatives, as well as advising the Slovak government on legislative reform.
White & Case celebrated a key role in one of the few Slovakian projects deals of late, advising Skanska on the construction of a motorway in Bratislava.
Squire Sanders & Dempsey, Freshfields Bruckhaus Deringer and CMS also have operations in Bratislava, while DLA made an entry into the market last year through its merger with Weiss-Tessbach.
|Baker & McKenzie||12||33|
|Chadbourne & Parke||12||35|
|Wardynski & Partners||7||57|
|Weil Gotshal & Manges||6||41|
|Allen & Overy||5||24|
|Hogan & Hartson||5||17|
|White & Case||5||44|
|Baker & McKenzie||6||22|
|Allen & Overy||3||9|
|White & Case||2||21|
|Prague, Czech Republic|
|Allen & Overy||4||11|
|Weil Gotshal & Manges||4||25|
|Baker & McKenzie||3||19|
|White & Case||3||37|