Compared to previous uncertainty faced across the CEE region at the start of the pandemic, countries have started to recover well with transactions regaining speed. For independent and regional law firms, market conditions are favourable, and firms with office networks that span the region are well placed to handle increasingly cross-border transactional work. As US firms continue to gradually scale down their operations in jurisdictions across the region, many lawyers have become wary of working for the big international players, which is a boon for more localised firms.
In Poland, where the legal market has remained strong and withstood the effects of the pandemic considerably well, law firms are benefiting from continued growth in the economy. Poland also continues to see international inward investment and its geographical position places it at the crossroads of numerous transport routes across Europe, both of which are factors enabling its continued economic success.
‘Manufacturers are trying to change and adapt to the EU’s Green Deal economic policy, to get rid of some of the non-green businesses and lines.’
Martin Kubánek, Schoenherr
As a result of this, independent firms are still thriving despite the global impacts of Covid-19, although newer firms are thought to be struggling more compared to those that are already established in the region. Managing partner of Wolf Theiss’ Warsaw office, Tomasz Stasiak, notes: ‘It was a rather difficult time for newcomers to the market.’
Consequently, countries across the CEE are not seeing much of an increase in the number of new independent firms, and instead are witnessing the advancement of well-established practices that already have a reliable client base which saw them safely through the pandemic. Therefore, ‘the top firms have remained at the top’, according to Stasiak, and over the course of the next year he expects that they will remain busy.
Positive trends are replicated across the Visegrád Group countries. In the Czech Republic, there was an appreciable uptick of activity in the TMT and real estate sectors in 2021, while hospitality and tourism remained slow due to the continuation of Covid restrictions. However, the most interesting trend is happening in the Czech automotive industry. Schoenherr’s managing partner in Prague, Martin Kubánek, observes: ‘We’ve seen many transactions in the automotive industry because it’s mostly related to the restructuring of the whole industry in terms of electric cars. It may be the traditional companies have to get rid of some of the production lines because of this. In the Czech Republic and Slovakia, it’s crucial because they are two countries with a very high density of automotive suppliers.’
This is a microcosm of the challenges and opportunities facing markets across the CEE region over the next few years. Kubánek says that ‘manufacturers are trying to change and adapt to the EU’s Green Deal economic policy, to get rid of some of the non-green businesses and lines. On the other hand, they should also adapt because one third of these spare parts will not be needed for electric cars.’
While lawyers are confident of the overall robustness of the CEE economies, Vienna-based Andrea Gritsch, who sits on the Wolf Theiss management board, cites several potential issues to be aware of. ‘We already see on the horizon that interest rates might change.
‘International investors might perceive Europe as more risky than they used to.’ Andrea Gritsch, Wolf Theiss
Money might not stay as cheap as it was and currently is. And the second factor is, of course, looking towards our region, the question of stability and the conflict between Ukraine and Russia on the one hand, but also the endeavours to gain independence by Republika Srpska in Bosnia. And of course, you now look towards Hungary and the various nationalist forces at play. International investors might perceive Europe as more risky than they used to.’
Despite this, Gritsch notes that venture capital is flowing into the region at record levels and that infrastructure, digital and telecoms investments have picked up; trends that have converged to produce considerable interest in digital road and motorway projects. The other big issue for CEE law firms, according to Gritsch, is how they will manage the expectations of their staff in a post-pandemic environment. ‘It’s not only flexible working or agile working, but the concept of work itself.
It’s going to be an employee’s market and not an employer’s market. We are just in the middle of this shift. And in that sense, we’ll see, I believe, a lot of change in law firm management, in law firm structuring and in law firm operations.’ LB
| Rank (by L500 ranking) | Firm | Region | Total lawyers | Total partners | Promotions | Offices | Partner hires |
|---|---|---|---|---|---|---|---|
| 2 | Wolf Theiss | CEE | 342 | 71 | 3 | 13 | 2 |
| 3 | Schoenherr | CEE | 330 | 50 | 5 | 15 | 2 |
| 4 | Kinstellar | CEE | 350 | 50 | 1 | 12 | 18 |
| 19 | Cerha Hempel | CEE | 200 | 45 | 0 | 7 | 0 |
| 34 | Dorda | CEE | 91 | 22 | 3 | 1 | 0 |
| 58 | Binder Grösswang | CEE | 100 | 25 | 1 | 2 | 0 |
| 60 | Karanovic & Partners | CEE | 100 | 23 | 2 | 7 | 0 |
| 81 | Rymarz Zdort | CEE | 95 | 22 | 0 | 1 | 0 |
| 100 | Knoetzl | CEE | 22 | 9 | 0 | 1 | 0 |