While some countries such as the Czech Republic have progressed rapidly since abandoning communism and adopting market economies, Romania has experienced a more difficult transition. Yet several foreign law firms, taking a long-term view of the Romanian market's potential, have established themselves in the country.
Political and economic independence is a relatively new experience for Romanians. For many years the country was controlled by the repressive Ceausescu regime which was overthrown in December 1989. The establishment of democracy and restructuring of the economy has been slow and only in the past few years has the international community gained confidence in the improvements being made.
Several foreign law firms with historical links to the country or a real commitment to creating strong practices in emerging markets have established themselves in Romania and more are planning to do so. UK firms Sinclair Roche & Temperley and Taylor Joynson Garrett have offices in the capital, Bucharest, as have some US practices, including Hall Dickier and Kingston & Peterson. Canadian firm Burns Schwartz and Paris-based practice Jeantet & Associates also have a presence in the country.
Sinclairs, a medium-sized firm with a strong shipping and commercial practice, has had a practice in Romania for 35 years, says London-based partner Campbell Steedman.
Requests from Romanian clients to service their joint venture projects came after the fall of communism and Sinclairs was involved in the state's first public offer privatisation project in 1991.
Its Bucharest office opened in 1992 and the firm now handles a mixture of corporate, finance, shipping and privatisation work, together with projects for international agencies such as the European Bank for Reconstruction and Development. Steedman says commercial property work is also thriving.
London firm Taylor Joynson Garrett also had links with Eastern Europe before taking over the Bucharest practice of Nicholas Hammond in 1993. Hammond opened his office in 1990 and is now TJG's local partner. He confirms that the firm acts for a wide range of international investors. “There's a small number of Western firms here, so clients don't stick to national firms,” he says.
Under Romanian Bar regulations, the practice of local law is restricted to Romanian lawyers. However, the Romanian government is discussing with the Bar associations of several countries the question of reciprocal practising rights.
Meanwhile, laws are being developed to accommodate the new market economy.
“Legally, there's good progress in the likes of company law and bankruptcy law,” says Steedman. “The country has had an associate membership agreement with the EU since February 1995 and is looking for EU integration in due course so they are developing laws to take account of EU directives.”
Hammond adds: “The bureaucracy is still weighty and the Romanians don't like to talk on the telephone or write letters but like to deal face to face.” But both men agree that their practices are building.
Romania is attracting law firms with strategies aimed at new markets. Sinclairs has two offices in Vietnam and others in Shanghai, Hong Kong and Singapore. Chicago firm Altheimer & Gray, which plans to establish an office in Romania, has offices in Prague, Warsaw, Kiev, Istanbul, Bratislava and Shanghai.
Altheimer & Gray partner Jeffrey Smith says: “We're already doing some assignments for clients in Bucharest with a local law firm.”
He says an office in the city would support the firm's strategy of having a broad regional presence in Central and Eastern Europe. “Romania is at the stage the Czech Republic and Poland were at some years ago as far as the development of market economies are concerned, the progress of privatisations and development of their laws. But clearly there's more interest now.”
Foreign firms already established in Romania are expecting newcomers. “There are rumours of new entrants to the market daily,” says Steedman.
“We're looking for a long-term future here and would like to have a fully integrated office staffed with Romanians.”
Hammond is similarly committed. “I think there's a great future in Eastern Europe and in about 15 years' time we'll have a fairly uniform legal environment throughout Europe.”