EU accession has meant a legal overhaul for new EU members. And they are slowly but surely integrating themselves, says Kevin Connor
The accession of 10 new members to the EU in 2004 – Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia – has had a significant impact on law firms. How to approach the market; what types of law to practise; how to develop young lawyers and many other issues have become crucial for firms in new member states.
In addition to being lawyers in their home jurisdictions, lawyers in these countries now must also practice EU law as it may apply to any given matter. Accordingly, firms devote significant resources to developing broader EU expertise and train their lawyers in many areas of EU law.
Some firms have developed programmes to train lawyers in new member states by placing them in their Brussels offices for various periods to gain experience practising EU law. These lawyers return to their home newly able to provide advice to domestic companies in areas such as competition, state aid and energy regulation.
The need to disperse EU legal talent across Western, Central and Eastern Europe is such that law firms now staff matters with professionals from across the EU regardless of where the work originates. No longer is it unusual for an EU client matter originating in, say, Slovakia to be staffed by lawyers from that country and also Hungary, Poland, Brussels or the UK.
Unification of the practice of law across jurisdictions, instead of practice within separate nations with laws unto their own, also means that lawyers need to know local laws across the EU as well. Firms must be able to put legal teams together so that the right expertise is available exactly where it is needed, without regard to national borders or geography. This development in the legal profession represents one of the basic objectives of the EU itself – achieving the true movement of services across the EU.
EU accession has also resulted in more work in diverse areas of industry as the overall risk profile of the region has changed. With the certainty of the rule of law that EU membership brings, more risk-adverse money has entered the market – from private equity players to real estate developers, mutual funds, consumer service providers and just about everything in between.
Law firms need to respond to these changes in the market and ensure that new industries are served by lawyers not only familiar not only EU law, but also possessing knowledge and know-how specific to the relevant sector. What’s more, emergence of EU-trained law firms on the edge of Europe is motivating firms in new accession countries to export their skill sets to South Central Europe, including not only Romania and Bulgaria, but also Macedonia, Albania, Serbia, Montenegro and Croatia.
Firms that have been able to adapt and have been truly committed to the new accession markets have done well. Other firms, such as those that have been relying on big-ticket privatisation work as the basis for their business in the region, have struggled. Many have left these markets or have significantly reduced their presence.
EU membership has altered forever the expectations of professionals as both rate and salary convergence accelerates and moves ever closer to EU norms. Alhough not yet approaching the levels seen in the UK, for example, billing rates and compensation levels are approaching complete convergence – a similar phenomenon affecting the broader accession markets.
Kevin Connor is a partner at Squire Sanders & Dempsey