Increased stability and diversified investment is keeping independent law firms in the CEE region busy
Despite the impact of recent political tension in western Europe triggered by Brexit and several high-stakes leadership elections, according to management at some of the strongest firms in the CEE region, there are patches of growth and they are there for the long haul.
‘If people are not feeling good about Europe as a whole, that does cause a reduction in appetite for investment in eastern Europe too, even if it’s not directly related,’ says Jason Mogg, managing partner of Kinstellar.
Kinstellar operates in nine countries across the CEE region and Mogg cites the Czech Republic, Slovakia and Romania as the three strongest-performing jurisdictions. ‘Romania is tackling corruption gradually and that has been very interesting for investors. Our office in Bucharest did very well last year and that did not change with the new government.’
‘The CEE region remains a competitive and diverse legal market, but we do not expect significant changes or further consolidation,’ comments the newly-elected managing partner of Schoenherr, Michael Lagler.
The second-strongest regional player after fellow Austria-based giant Wolf Theiss, Schoenherr operates in 14 countries. Lagler gives a similar country list to Mogg, including the Czech Republic, Slovakia and its home market Austria among this year’s top performers.
‘We have also noticed strong growth in Romania, Serbia, Poland and Slovenia, which has translated into increased transactional work; we will continue to invest in these markets,’ Lagler adds.
Poland in particular has seen some independent domestic firms break the dominance of global firms active in the country, with Wardyński & Partners becoming the first Polish firm to enter The Euro Elite this year. And the only independent Romanian firm in the 100, Nestor Nestor Diculescu Kingston Petersen (NNDKP), has also been growing at a fast pace since it opened as a home-run family business in 1990.
‘During the past two decades, Romania has been an attention-grabber in terms of its legal business community, in a group of CEE countries where local independent firms continue to play a key role in the overall structure of the market,’ says NNDKP’s co-managing partner Ion Nestor.
While Kinstellar’s model of focusing on more difficult markets has seen the firm grow particularly in Romania, Schoenherr continues to see Poland and Hungary, among others, as mature markets and obvious locations for further expansion.
In terms of practice areas, litigation is the biggest mover as companies operating in the CEE grow confidence in the domestic legal process and the rule of law. Companies are more willing and prepared to settle their disputes by going to court now instead of using arbitration to avoid local courts.
After international law firms downsized their CEE operations post-financial crisis, the amplified fight against corruption and an increase in international investment means the market continues to create opportunities for local law firms to flourish.
‘Large international firms were reluctant to enter the Romanian market in the 1990s. This represented an advantage for our domestic market. Today, when we have at least five independent elite law firms that dominate, I am confident that progress will continue sustaining a healthy competitive legal market,’ Nestor says.
Wolf Theiss co-managing partner Erik Steger sums up the mercurial nature of the markets for those firms operating across the region: ‘The legal market in CEE follows pretty much the general economy and therefore you have a very diverse situation – one year, one of these markets is picking up rapidly, while another is lagging behind. It regularly depends on which countries we see elections in. About a year before elections, not much happens and it takes a while for a new government to be formed, for investment to be made in infrastructure etc. It takes a bit of time before the economy gains pace again.’
However, Lagler concludes: ‘We are definitely here to stay.’ LB
georgiana.tudor@legalease.co.uk
| Firm | Country | Total lawyers | Total partners | No. of offices |
| Wolf Theiss | Austria | 307 | 64 | 13 |
| Schoenherr | Austria | 290 | 40 | 14 |
| Kinstellar | CEE | 200 | 31 | 9 |
| Cerha Hempel Spiegelfeld Hlawati | Austria | 180 | 43 | 8 |
| Nestor Nestor Diculescu Kingston Petersen | Romania | 130 | 30 | 5 |
| Wardyński & Partners | Poland | 100 | 21 | 4 |
| Binder Grösswang | Austria | 100 | 22 | 2 |
| Dorda | Austria | 80 | 26 | 1 |