Demand for lawyers is increasing across the central and eastern European region as the economies continue to develop, resulting in a growing need for international legal services. This is particularly the case in Poland. For example, Linklaters & Alliance has recently expanded its office in Warsaw, Norton Rose is opening in Warsaw and the Freshfields/Bruckhaus merged firm is expected to do something in the Polish market in the near future.

Poland is the largest country in the region and will be among the first wave of countries to join the European Union, most of the remainder having already commenced EU accession talks. The Czech Republic, Hungary, Estonia and Slovenia are expected to join in either 2004 or 2005.

Poland is a young country – it is only 10-years post-communism – and the legal system is relatively new. The qualification rules for UK lawyers are quite tight – you can practise as a UK lawyer but not as a Polish one. To practise Polish law you have to be registered as a local law firm.

Allen & Overy, Clifford Chance, Linklaters & Alliance, Weil Gotshal & Manges and White & Case are non-domestic firms based in Poland and the central and eastern European markets that crop up the most frequently. In Poland, there are two very strong local firms, Soltysinski Kawecki & Szlezak and Wardynski & Partners, which are independent. While they are currently very strong Polish practices, whether they will survive the next five years as independent firms is still unknown.

There is a lot of inward investment coming into Poland which is driving dynamic change. Because of its location and economic power, Germany is the biggest investor. The UK, Italy, France, The Netherlands and the US are the other big investors. The US in particular has been investing since the early 1990s and US investment is one of the biggest sources of work in the country.

All central and eastern European countries are undergoing privatisation programmes and there is a lot of project finance being done in these countries as well as capital markets and syndicated lending.

Poland has nearly 300 companies listed on the Warsaw Stock Exchange and these businesses are increasingly looking to increase their global standing. Because of this internationalisation more Polish companies need international legal advice. This is where the international, non-Polish lawyers can really make their mark. Many Polish lawyers do not have much experience in transactional work. They are reactive and often advise in a very academic way, providing a long discourse on the law but not really dealing with commercial and practical issues. Clients, of course, require legal problems to be not only identified but also solved.

With reference to modernisation, central and eastern European countries are economically now moving towards the western model. There is, though, a clear distinction between the former Soviet Bloc and the old Soviet Union. The Soviet Bloc countries, having previously had a little more economic and political independence, are more advanced than the new countries formerly inside the Soviet Union which, with the exception of the three Baltic States, are a long way behind the main central European economies (CEE). The pace of development is also a lot quicker in some CEE countries than in others. Romania, for example, is probably 10 years behind Poland, although it is moving in the right direction.

A lot of the CEE legal work is London-generated but there is no doubt that increasingly more of it is generated in the region. Multinational clients are, understandably, more impressed with a law firm that shows a commitment to the region as a whole, rather than one or two countries. In this context the entire regional network for a law firm in central and eastern Europe can create a presence that is greater than the sum of the parts.

Western Europe is moving east and eastern Europe is moving west, part of a trend towards a larger, more integrated Europe, an economic powerhouse to rival the US. Any firm with pan-European aspirations is going to have to look at the region and the need to service its clients in these countries if it is going to convincingly claim to service the whole of Europe.

Nick Eastwell is Linklaters’ central and eastern European region managing partner and Marek Wierzbowski is co-head of Linklaters’ Warsaw office.