Page 11 - bne magazine March 2017 issue

bne March 2017 Companies & Markets I 11
As the Austrian firms had a decades-long head start over competitors from the formerly communist markets surround- ing them, the majority of leading regional firms come from Vienna, with well-known Austrian brands such as Wolf Theiss, Schoenherr, Cerha Hempel Spiegelfeld Hlawati (CHSH) and ENWC (now known as Taylor Wessing CEE) retracing the contours of the former Austro-Hungarian empire by opening offices across the region. Wolf Theiss and Schoenherr both have offices in 13 CEE countries, while CHSH and Taylor Wessing CEE both have offices in six. CMS Reich-Rohrwig Hainz – the Austrian member of global CMS – manages offices in six CEE countries as well, with shared management of three more.
Nonetheless, a number of firms based in the former Iron Cur- tain countries have begun expanding as well in recent years, led by Kinstellar and Peterka & Partners. Kinstellar began with Linklaters’ CEE offices, after that Magic Circle firm withdrew from its four CEE markets in 2008, and has since expanded into an additional four markets (plus one in Almaty). Peterka & Partners (which calls itself, presumably by excluding Austria from its definition of CEE, “the only one law firm from the CEE region operating on a regional level”) has grown organically since its launch in 2000 to cover eight markets. Both are based in Prague, as is bnt attorneys-at-law, which has offices in nine CEE markets – including, uniquely among the regional firms, all of the Baltic states.
As a related phenomenon, regional firms have emerged recently that focus on countries sharing a particular cultural and political history, which makes a multi-office offering particularly useful. The Serbian Karanovic & Nikolic and Slovenian ODI Law firms have spread effectively across the Balkans, for instance, joined by offices from Austrian CMS Reich-Rohrwig Hainz, Wolf Theiss, and Schoenherr.
“As the international firms slowly retreat to the north, a growing cadre of regional firms is expanding to take their place”
The growth of the multi-office model in the three Baltic states is similar, though instead of the strategic growth pursued by the pan-Balkan firms, the Estonian, Latvian, and Lithuanian markets are consolidating somewhat, with local firms tying-up with one another to increase their ability to compete with the traditional Big Four of Sorainen, Tark Grunte Sutkiene, Ellex, and Cobalt (the latter two of which traded Estonian offices in 2015 and rebranded from Lawin and Raidla Lejins & Norcous).
Other firms with pan-Baltic presences such as Vilgerts and FORT were joined in 2016 by Primus, Derling and Leadell, and
additional alliances are likely to follow (even as previous alli- ances such as Baltic Legal Solutions, Borenius and Glimstedt dissolve, with constituent parts tying up with other brands). With the exception of Sorainen – the only truly integrated firm in the Baltics, with full profit-sharing among equity partners
– all the other firms are highly formalised alliances, though several claim to be in the process of moving towards the Sorainen model.
Similarly, a large number of Czech firms (including Havel Holasek & Partners, Glatzova & Partners, and Dvorak, Hager & Partners) have offices in Slovakia, and a number of firms based in Ukraine and Russia have offices in both countries, including Egorov Puginsky & Partners, Eterna Law (the former AstapovLawyers), Yust and Integrites.
Strangely, despite being the largest CEE economy and the home to a large number of extremely strong firms, both domestic and international, no Polish firms have yet expanded into other CEE markets.
Although a substantial number of domestic firms (ie. those without offices in other countries) in CEE have always compet- ed effectively with their international and regional competi- tors, a number of them have, in recent years, formed alliances – either loose or binding – to increase their visibility and, they claim, provide a “one-stop” service comparable to that offered by the regional firms. Most of these new alliances – including TLA, SELA and ADRIALA – focus on the former Yugoslavia.
It’s a bit early to predict the extent to which these alliances will succeed in taking business from the regional firms – the regional firms claim to be unconcerned – but, if they are suc- cessful, more should be expected.
Again and again over the past few years, partners at interna- tional, regional, and local law firms across CEE have insisted that there is room for everybody and all models in the region. Perhaps. But there’s little denying that the make-up of the region is changing, with international firms starting to abandon some of their footholds in this part of the world for greener pastures elsewhere, and regional and domestic firms increasingly able – in both structure and sophistication – to pick up the slack, generally offering lower fees in the process.
Nobody’s suggesting that the many world famous law firm brands present in CEE are unnecessary or over-priced; for the most challenging and cross-border deals, those firms continue to provide clients with the benefit of decades (or, sometimes, centuries) of top-level experience, knowledge and competence. But local and regional firms are increasing- ly nipping at their heels here in CEE, and businesses looking to do deals in this part of the world would do well to familia- rise themselves with possible alternatives before signing on the dotted line.
CEE Legal Matters is a print and online publication providing coverage of the 24 legal markets in Central and Eastern Europe.
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