Category: Interviews

The Deal:  On December 8, 2016, CEE Legal Matters reported that Wolf Theiss had advised the EBRD on its issuance of RSD 2.5 trillion Floating Rate Bonds due December 2019. AP Legal advised Raiffeisen Banka A.D., Beograd, acting as underwriter for the issuance, and Harrisons advised marketing agent Citigroup Global Markets Limited. 

The issuance – which was denominated in Serbian dinar, listed on the Belgrade Stock Exchange (BELEX), and governed by Serbian law – was the first by an international financial institution in Serbia.

We reached out to several of the individuals involved in the deal for information.

The Players:

• Wolf Theiss: Milos Andjelkovic, Senior Associate
• AP Legal: Aleksandar Preradovic, Managing Partner
• Raiffeisen Banka A.D., Beograd: Dusan Mitrovic, Head of Legal 
• Harrisons: Ines Matijevic, Consultant, Head of Finance and Capital Markets Group

CEELM: How did you each become involved in this matter? Why and when were you selected as external counsel initially by your clients, and Dusan, why did Raiffeisen reach out to AP Legal?

Wolf Theiss: Our firm had worked with the EBRD in the past. We successfully pitched for this particular mandate and so were involved in the bond issuance process from the very beginning.

AP Legal: We have a long history of working with Raiffeisen Banka Beograd on various types of transactions. I believe that our successful cooperation in the past as well as our previous experience with IFIs and knowledge of IFI expectations when it comes to the form and content of transaction documentation and transaction management were the key factors why Raiffeisen Banka Beograd decided to instruct us in this matter. 

Raiffeisen: Raiffeisen bank chose AP Legal based on its track records; i.e., Mr. Preradovic’s experience and knowledge in banking and finance. We have cooperated in the past and we as a bank respect his work very much. The quality of his work and the price for it are more than favorable. Our working relationship was excellent. 

Harrisons: Citigroup is a long-standing client of Harrisons – Harrisons actually helped Citibank NA set up its operations in Serbia by establishing a representative office in Belgrade. We regularly advise Citi concerning various aspects of the Serbian legal regime, from purely banking and financing-related matters to day-to-day operational issues like employment-related issues. So it was natural that when Citi needed assistance from local lawyers on this project they approached Harrisons.

CEELM: What, exactly, was the initial mandate when you were retained for this project (as compared to the final result)?

Wolf Theiss: As issuer`s counsel, we were mainly responsible for the drafting of the prospectus for the public offer and listing of the bond and the handling of the proceeding for the approval of the prospectus by the Serbian competent authority.

AP Legal: Our initial mandate was provision of customary capacity and enforceability legal opinion on transaction documentation for the benefit of Raiffiesen a.d. Beograd. 

Harrisons: At the beginning, Citi was contemplating acting as Marketing Agent both in Serbia and abroad, and it was exploring the possibility of acting as a co-underwriter as well (although this idea was abandoned at a very early stage of the process). 

CEELM: Who was on your teams, and what were their individual responsibilities?

Wolf Theiss: The Wolf Theiss team consisted of me and Associate Nevena Skocic, from Serbia, and Partner Alexander Haas and Associate Nikolaus Dinhof in Austria. 

The Serbian team was responsible for providing feedback on Serbian law requirements, communicating with the regulatory bodies on the ground, and getting all the necessary documents through, while the Austrian team provided much-needed insight into international practice for this type of transaction and practical suggestions for possible solutions for many administrative hurdles that inevitably show up on a milestone transaction such as this. 

AP Legal: The AP Legal team consisted of myself and Ms. Aleksandra Jovic. My primary responsibility was drafting the transaction agreements governed by Serbian law and coordinating with our client and the legal teams of the other participants in the process. Aleksandra’s responsibility was reviewing and input on the drafting of transaction documentation (including the prospectus and listing application) and providing ongoing regulatory legal advice on certain aspects of the transaction. 

Raiffeisen: Raiffeisen’s Treasury department was in charge of the commercial part of the business. I was in charge of legal issues and coordinated with AP legal.

Harrisons: Harrisons was represented by Jovan Cirkovic and me. We followed the process from the initial structuring phase to the finalization of the bond issuance.

CEELM: How was the issuance structured, why was it structured that way, and what was your role in helping it get there?

Wolf Theiss: The EBRD is the first multilateral lender to raise funds on the local market in dinars. This first bond from the EBRD in the Serbian currency is a three-year floating-rate issue that pays interest at the three-month Belgrade Interbank Offered Rate (Belibor) plus 0.4 percent. The bonds are governed by Serbian legislation and will be traded on the Belgrade Stock Exchange.

We are proud that our team was leading counsel on a transaction of this magnitude and that it was our team’s legal advice and effort that helped get this deal through.

AP Legal: In addition to the role of underwriter (in Serbian pokrovitelj emisije) in the sense of Serbia’s Capital Markets Act, Raiffeisen’s role in this transaction was calculation and paying agent of the issuer. In that capacity Raiffeisen was responsible for: (a) settlement and registration of the bonds with the Central Registry of Securities on the issue date; and (b) calculating and making payments relating to the bonds. Finally, Raiffeisen also acted as the listing agent of the issuer responsible for making the application for admission to trading of the bonds on the prime market of the BELEX. The scope of Raiffeisen’s role in the transaction was agreed with the issuer prior to the commencement of our engagement. 

Harrisons: Citigroup Global Markets Limited acted as Marketing Agent in the transaction. 

CEELM: What was the most challenging or frustrating part of the process? 

Wolf Theiss: Since this was the very first supranational bond issuance in Serbia, the most challenging part of it was to implement international standards that the market expects the EBRD to meet. Lack of any previous practice in Serbia that could be used as a guideline was at times challenging. However, since our Vienna team has had ample international experience in similar transactions, they were able to provide suggestions on how to deal with every issue we encountered in the process. 

AP Legal: Taking into consideration the special status of the issuer as an international financial institution and its specific requirements when it comes to the form and content of the contracts and other documentation related to the bond issuance (including those related to disclosure) the most challenging part of the process was to get to the point when the entire set of transaction documents was fully aligned among all participants in the process. This line of work required a lot of interaction with competent local authorities and institutions. I would like to emphasize the very pro-active and constructive role of the Securities Commission, Central Registry, and BELEX, which significantly contributed to successful realization of this precedent transaction on the local market. 

Raiffeisen: Dealing with the State Authorities (the Tax Authorities, Security and Exchange Commission, etc.). Due to the strict regulations relating to the deal and specific wishes of the EBRD, the most frustrating part was fulfilling legal requirements and the EBRD’s wishes at the same time. The EBRD has its own internal rules, which were not 100% aligned with Serbian legislation. The EBRD did not want to drop its internal regulations, which is normal. So, it was an issue for us to fulfill both EBRD’s wish not to break its internal regulations and that everything be in line with the Serbian legislation at the same time. This was a challenge for us as well as for the EBRD’s legal counselors. 

Harrisons: We believe that Wolf Theiss and AP Legal are better positioned to answer this and the following question bearing in mind our (and Citibank’s) to some extent limited involvement in the process, but we would say that being the debut issue of debt securities by a supranational in dinars on the Serbian market, the issue had to set the path/precedent for many aspects of the transaction. As Serbian regulations are not always crystal clear there were a number of ambiguities that had to be resolved during the process. This required close collaboration from all participants in the process, from the EBRD and Raiffeisen bank and their advisors on one side to the Serbian Commission for Securities and other regulators on the other side. This process was not always easy and smooth and faced hiccups from time to time. 

CEELM: Was there any part of the process that was unusually or unexpectedly easy?

Wolf Theiss: Serbian administration is known to be, at times, conservative. However, due to the exceptional importance of this transaction for the Serbian market, we encountered nothing but support, cooperation, and openness from the administrative bodies involved, starting with the Securities Commission.

AP Legal: Generally, for the reasons stated above the transaction was quite complex and challenging. In my opinion agreeing on the contractual documentation related to the issuance with the client and other counterparties was probably the easiest part in the process.

Raiffeisen: Preparation of the documentation in cooperation with AP Legal was the easiest part of the job. 

Harrisons: No.

CEELM: Did the final result match your initial mandate, or did it change/transform somehow from what was initially anticipated?

Wolf Theiss: In comparison to the initial mandate, the final scope of our work included much more administrative work than initially expected. The difference arose due to the fact that the draft of prospectus that we prepared and that was approved by the EBRD and Raiffeisen significantly differed from the documentation that was deemed as “standard” in the Serbian market so far. Consequently, certain points of the EBRD’s prospectus had to be explained to the authorities, which required somewhat extensive communication. This communication was helmed by Raiffeisen, as was understood from the beginning, but together with them we soon came to realize it would be more efficient if we were to be involved, since we had the most comprehensive understanding of the documentation. This is where our mandate went out of the original scope.

AP Legal: As the overall transaction structure turned out to be more complex than initially anticipated by the client our mandate evolved to drafting key transaction agreements governed by Serbian law (the subscription agreement, calculation and paying agency agreement, mandate letters, and powers of attorney), assistance with the drafting of other transaction documents (e.g., the prospectus and applications for listing of the bonds on BELEX, etc.) and providing ongoing legal advice as to various legal aspects of the transaction. 

Harrisons: As a result of restrictions imposed by Serbian capital markets regulations and after discussions both with the EBRD as issuer and its advisors and with the Serbian Securities Commission, it was decided that Citigroup Global Markets Limited would act as Marketing Agent only outside of Serbia, in a limited number of countries which were of interest to the issuer. 

CEELM: What individuals at your clients instructed each of you, and how would you describe your working relationship with them? 

Wolf Theiss: We were directed by Ajay Sud and Joan Grogan, both Senior Counsels at the EBRD, and Isabelle Laurent, the EBRD’s Head of Funding, who are exceptional professionals with vast experience in this type of transaction. They were involved in every step of the process and their support was crucial in getting the deal through. The preparation of the transaction lasted for months (and even that was only made possible by Ms. Laurent’s work of many years to model the Serbian legislative framework). During this time we were in daily communication, which was the only way to reach the successful closing.

AP Legal: Our primary point of contact was Mr. Dusan Mitrovic, Head of Legal Division at Raiffeisen Banka Beograd. We also worked closely with Mr. Milan Milekic and Mr. Joko Lolo Tomic from Raiffeisen’s investment banking and treasury division. All members of our client’s team showed great dedication to the project. I would describe our overall working relationship with Raiffeisen’s team as excellent. 

Harrisons: As is usually the case when working with Citigroup, with whom we have a longstanding and strong relationship based on mutual trust, we had an excellent relationship with the Citigroup team working on this deal, involving smooth correspondence, precise instructions, and openly sharing ideas regarding the project.

CEELM: How would you describe the working relationship with your counterparts on the deal?

Wolf Theiss: During the process we had very little direct communication with Harrison Solicitors and AP Legal. Harrison Solicitors mostly dealt with the marketing aspect of the transaction, which did not significantly overlap with our scope of work. We had a lot of communication with Raiffeisen Banka Beograd, including quite a few meetings; although we are aware that they received significant support from AP Legal, we did not have many chances to interact with them directly.

AP Legal: The legal teams of Wolf Theiss and Harrison Solicitors involved in the transaction showed great dedication and a high level of professionalism. I would describe our overall working relationship with them as excellent. 

Raiffeisen: Excellent, especially with the client’s legal counselors – both internal and external. We understand each other very easily.

Harrisons: Bearing in mind the limited role Citibank took in this transaction as Marketing Agent, our work on this transaction was also to some extent limited in scope. This being said, we had great cooperation with both Wolf Theiss and AP Legal on all aspects of the transaction to the extent relevant for the role Citigroup was taking in this transaction. They, and in particular the Wolf Theiss team who had the most difficult task of bringing together the requirements and needs of EBRD as the issuer and boundaries imposed by Serbian regulations seemed very knowledgeable and focused on the transaction. They acted proactively on all matters involving Citigroup.

CEELM: How would you describe the significance of the deal?

Wolf Theiss: As mentioned, this deal was very important for Serbia: with more than 70 percent of its borrowing in foreign currencies, mostly in the euro, Serbia has one of the highest levels of foreign currency borrowing among all of the countries the EBRD works with. This exposes unhedged borrowers to significant exchange rate risks. The dinar bond, which will allow the EBRD to lend in dinars to domestic borrowers, is in line with the efforts of the National Bank of Serbia to tackle the high levels of euro-ization and increase the availability of dinar financing (dinarization).

The EBRD will be able to lend the proceeds from the 2.5 billion-dinar bond to domestic borrowers who can take on the debt without fear of foreign exchange risk. This was an important step aimed at strengthening the Serbian capital market with the first issue of a supranational bond in Serbian dinars and will also increase the EBRD’s ability to lend to the Serbian economy in the local currency and thus contribute to the dinarization of Serbian finance.

AP Legal: Notwithstanding the relatively small volume of the issuance, this precedent-setting transaction represents a significant achievement for all participants in the process. I believe that this deal will further enhance the position of Raiffeisen Banka Beograd as one of very few banks on the local market which are capable of providing underwriting, agency, and other related services to other IFIs and DFIs which are contemplating issuing RSD-denominated debts securities on the Serbian market. The deal is also significant to the Serbian economy, as it will provide Serbian companies and municipalities with access to new sources of funding in local currency. 

Harrisons: As the first issuance of its kind in Serbia, the issue of a supranational bond in Serbian dinars will hopefully assist in the development of Serbian capital markets and help, at least to some extent, dinarization of the Serbian financing market. There are also hopes that it will foster development of the Serbian debts securities market in general as the bond is admitted to trading on the Belgrade Stock Exchange. As for Citigroup, it underlines their continued commitment to Serbia.

This Article was originally published in Issue 4.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Anthony O’Connor came to Europe from his native Australia in 2006. As a Partner at Kinstellar in Budapest, he is both head of Kinstellar’s Hungarian Corporate/M&A practice and Co-Head of its firm-wide Private Equity practice. 

CEELM: Run us through your background, and how an Australian lawyer became head of Kinstellar’s Corporate/M&A practice in Hungary.

A.O.: I moved to Hungary in 2006 to join White & Case’s regional private equity and M&A team. At the time, while I wasn’t actively looking for work in Hungary, the opportunity to live in a location so different from that I had grown up in, together with the assurance of continuing to work on large and challenging transactions, was too attractive to pass up. When I was approached last year with the opportunity to join Kinstellar and head their Corporate/M&A practice, it really felt like a very natural fit – a premier law firm operating in markets that I was very familiar with, the DNA of a London-market firm (approach to quality, client service, and a keen awareness of regional and international market trends), and the ability to drive strategy and leverage over ten years of experience in CEE. I am now handling a much more diverse mix of things in addition to my core areas of M&A and private equity, and I’m really enjoying that!

CEELM: Was it always your goal to work abroad?

A.O.: From early on, I have made decisions specifically with a view to being able to travel and not only work but pursue a career. This led me to focus on transactional practices and, in the beginning, move to Sydney for a few years and work with the private equity team at Baker McKenzie. I always envisaged working somewhere in Europe, but rather than follow the well-trodden track of Australians moving to London, I was determined to end up somewhere out of my comfort zone – that said, Budapest is home for me now, and very much a place of comfort

CEELM: Tell us briefly about your practice, and how you built it up over the years. 

A.O.: I specialize in M&A and private equity and cover most of CEE, including Turkey and Kazakhstan. It’s quite a mixture in reality, from large M&A auction processes for international PE and corporate clients throughout the region, inbound investment into Hungary for what are often more small to mid-market M&A deals, to quite a bit of transactional real estate work with the recent activity in the local market here. Knowing these markets very well, in addition to having seen transactions throughout the entire spectrum of size and complexity, has meant I’ve built up a nice amount of experience. The practice has really grown off the back of clients needing a seasoned transactional lawyer who can guide them through the process and whose judgment they can trust, sometimes irrespective of the jurisdiction or governing law.  

CEELM: What do your clients appreciate most about you?

A.O.: You might have to ask them that! What I can say is that quality, experience, and a firm but calm manner is what I try to bring to the table. I also don’t like playing games or wasting clients’ money, and instead prefer an open and commercial approach where we focus on what’s really important to the client.

CEELM: Do you find Hungarian clients enthusiastic about working with foreign lawyers, or – all things considered – do they prefer working with local lawyers?

A.O.: I’ve found myself doing quite a bit more work for Hungarian clients lately, particularly as a result of more outbound investment over the last 12 months. It really comes down to whether you can resonate with those Hungarian clients that place a high value on working with a lawyer who will do more than just carry out instructions but instead partner with them on a transaction and deliver on documentation, negotiation, and deal management. It’s never a binary choice, however: in Hungary and indeed the region, we have the ability to offer this, together with exceptional local law advice – it’s really an integrated approach, which results in a stronger offering overall.

CEELM: There are obviously many differences between the Hungarian and Australian judicial systems and legal markets. What idiosyncrasies or differences stand out the most?

A.O.: I was having a conversation about this with a Hungarian-law-qualified colleague recently – Australia derives much of its law from English law, and in that sense there is a huge amount of precedent to look at and interpret. This allows you to form a pretty comfortable view of the proper interpretation in a given situation. I don’t envy my Hungarian colleagues most of the time, as it seems there is much more uncertainty around legislative intent and interpretation in the Hungarian legal system. I keep telling them how things would play out under English law. I suspect they’re sick of hearing that from me.

CEELM: How about the cultures? What differences strike you as most resonant and significant?

A.O.: Hungarians have incredibly analytical minds, and that tends to bleed into all aspects of life, while Australians tend to be a little more laid back in decision making, generally taking a punt that it will all work out well in the end. My wife is Hungarian, and we have a two-year-old son – I put it down to his Hungarian side whenever he spends ten minutes staring at a box of Kinder Eggs trying to ensure he’s chosen the most perfect egg (or perhaps not the wrong one)! 

CEELM: What particular value do you think a senior expatriate lawyer in your role adds – both to a firm and to its clients?

A.O.: I’m conscious that I’m head of the practice but not Hungarian-law qualified – with a top-quality team around me, it actually allows me to think more like a client, and very often question whether a particular approach or interpretation needs to be reconsidered.  Additionally, having Australian and English law qualifications allows the team to leverage off my experience across the table from large London and New York law firms, ensuring that we have a practice at the cutting edge of the international market.

CEELM: Outside of Hungary, which CEE country do you enjoy visiting the most, and why?

A.O.: I’m going to stretch the definition of CEE, and say Turkey.  My wife and I lived in Istanbul for two and a half years, and we both have some of the fondest memories from our time there.  First and foremost, the people are incredibly warm and hospitable, but also the food is spectacular, the beaches are beautiful and we had the luxury of stepping outside our apartment into a world-class historical city.

CEELM: What’s your favorite place in Budapest?

A.O.: Budapest has an eclectic mixture of truly stunning architecture, often in the most unexpected places, like an apartment building covered with gothic statues in a small street of a residential inner-city neighborhood. It’s the striking beauty in everyday places that still amazes me about the city. I also do love a run up to Janos-hegy in the morning or late afternoon. To have such tranquility and natural beauty in a location so close to the city again reminds me of how unique this city is and how lucky I am to live here.  

This Article was originally published in Issue 4.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

 

The Deal: In July of 2016, CEE Legal Matters reported that Oppenheim had advised the Messer Group GmbH, a German supplier of industrial gases, on its acquisition of the Hungarian subsidiary of France’s Air Liquide. CHSH Dezso es Tarsai advised Air Liquide on the deal.

Oppenheim Partner Ivan Bartal agreed to share insight into the deal with us.

CEELM: How did Oppenheim become involved with the Messer Group on this matter? Why and when were you selected as external counsel initially?

I.B.: Oppenheim’s antitrust group was approached by Messer in late 2014 to provide them with an initial antitrust/merger control assessment of an envisaged transaction on the Hungarian market.

CEELM: What, exactly, was the initial mandate when you were retained for this project (as compared to the final result)?

I.B.: Initially, it was Oppenheim’s antitrust practice group which acted as the “gatekeeper” for the matter. The reason for this is that we were entrusted with assisting Messer in the evaluation of the (then merely envisaged!) transaction from a competition law perspective: A key issue was whether we saw an opportunity to get the transaction cleared by the Hungarian Competition Authority (HCA). Given the special features of the Hungarian industrial gas markets (with more than 14 (!) separate product markets reviewed by the HCA) this appeared indeed a challenging task. After several rounds of discussions with Messer we gained a much deeper insight into the way these markets worked and – together with a renowned competition-economist team – we were convinced that it was possible to meet this challenge.

CEELM: Who were the members of your team, and what were their individual responsibilities?

I.B.: Our antitrust team – consisting of Partners Gabor Fejes and Zoltan Marosi and Senior Associate Lia Scheuer-Szabo – was involved initially. Then our corporate team (headed by me, along with fellow Partner Jozsef Fenyvesi, and including Senior Associate Barna Fazekas) did the due diligence part and assisted Messer in various rounds of negotiations.

CEELM: How was the agreement structured?

I.B.: The agreement was structured as a share sale and purchase for all the shares of the target company in Hungary.

CEELM: What was the most challenging or frustrating part of the process? 

I.B.: Closing required the fulfilment of various conditions precedent, including the approval by the HCA. Our competition lawyers led Messer through a complex, two-phase process, which lasted for almost ten months and entailed various rounds of discussions and the submission of volumes of economic and legal argumentation for the merger. Although the process went very smoothly, the duration of the HCA’s investigation meant a challenge for both the legal and the business teams, especially on the side of Messer, which was eager to see their merger agreement finally come into life. A further challenge was that in addition to approval by the HCA, further competition approvals from additional countries (such as Serbia and Albania) were also required and also had to be dealt with. With these approvals obtained, the transaction met its successful closing in June 2016.

CEELM: Was there any part of the process that was unusually or unexpectedly smooth or easy?

I.B.: Although (as we mentioned) the merger control process before the HCA indeed required considerable time, the discussions with the HCA officials were always conducted in a smooth, cooperative, and professional manner.

CEELM: Did the final result match your initial mandate, or did it change or transform somehow from what was initially anticipated?

I.B.: The final result was very much in line with the initial mandate.

CEELM: What individuals at the Messer Group directed you – and how would you describe your working relationship with them?

I.B.: We were particularly impressed by Messer Hungary’s extremely open and friendly CEO, Zsolt Bohner, as well as Messer HQ’s excellent in-house legal team, including Tobias Dietrich and Carsten Knecht.

CEELM: How would you describe the working relationship with your counterparts at CHSH on the deal?

I.B.: CHSH had a very capable and cooperative team, which was very good to work with.

CEELM: And how would you describe the significance of the deal to your clients, to Hungary, and/or to CEE?

I.B.: The deal was one of Oppenheim’s key deals for 2015/2016 – as an antitrust lawyer, it was especially remarkable that we were able to work closely together with our friends in the CEE region on merger notifications (and thus provide an easy one-stop shop for our client).

This Article was originally published in Issue 4.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Laszlo Reti, now mid-way through his third term as President of the Budapest Bar Association, takes pride in the ease with which he’s managed both the Bar and his long career as the Managing Partner of the Reti, Antall and Partners Law Firm in Budapest. Both the Bar Association and his law firm, he says, change with the times. In his words, he’s “swimming with the current.”

Reti, whose firm associated with PwC, was first admitted to the Budapest Bar in 1985, well before the end of communism and the subsequent re-privatization of the legal industry. In 1995 his firm tied up with Stikeman Elliot. That relationship ended when the Canadian firm withdrew from Hungary in 1999, and a year later Reti’s firm tied up with PwC, and has been in “close cooperation” with the Big Four stalwart since.

Reti notes that despite being a member of the PwC network, he and his partners retain full ownership of the firm. Indeed, he says, “I’ve never been as free as I have the past 17 years. My independence and integrity is absolute,” he says, “because PwC wouldn’t even think of taking it away or hindering.” He emphasizes the point: “I have never been instructed to do anything. The only thing is, we can’t work for PWC-audited clients, for conflict reasons.”

Despite starting with the Bar association in 1982 as Santa Claus in its Christmas celebrations, Reti says, he wasn’t particularly active until 2006. “And then I became the President,” he laughs, reporting that he was elected “as a kind of third party candidate as I was not a member of the leadership at the time.” He smiles at the memory, reminiscing that he was “elected off the streets.”

With 53% of the over 13,000 members of the Hungarian Bar Association (“and maybe even more of the financial strength,” Reti notes), the Budapest Bar Association is by far the largest of the 20 county-based local bar associations that make up the national Bar. 

 “We are the first instance body for registration and first instance for disciplinary procedures.” The Budapest Bar is, Reti explains, the primary service body for lawyers. The Hungarian Bar, by contrast, “is the main regulatory body. But there aren’t many regulations.”

Indeed, Reti says confidently, the Budapest and Hungarian Bars suffer from few of the conflicts and controversies that sometimes plague neighboring countries. “It’s very boring here – things run pretty smoothly.” Instead, he says the main issues he faces are the same as everywhere else: “Digitalization. The future of generalists and solo practitioners. How will we react to commoditization and robotization? How will the state react? How can we serve our clients?”

When asked if the Bar is experiencing any conflicts with the State in these controversial times, Reti rolls his eyes. “We are not so important. Of course there are individual lawyers who are involved in challenges against the State for one reason or another, and we will of course protect our members if they are arrested.” He pauses. “If they are arrested,” he repeats, smiling at the concept. “We are not Turkey. If you want to be arrested, you have to work very hard here.” He later clarifies out of a concern that even his joke might be misleading: “We cannot imagine that a lawyer might be arrested for political reasons here.”

The Budapest Bar, Reti insists, has traditionally not been a very stringent or demanding organization, and he notes that “direct political control over the legal profession faded away in the 1980s, and the Ministry of Justice since then has been more focused on protecting the interests of the profession than controlling them.” The regime since the change “has reflected the approach of the pre-Communist regulatory regime: there are no artificial bars to joining the Bar, and both the Hungarian Bar Association and the regional associations, such as the Budapest Bar Association, enjoy a great degree of regulatory freedom.”

The future may be different, however, and Reti says the current system may not last long. “It’s sort of the dying light of day, as things are changing,” he says. “A traditional bar association has two basic functions: issuing licenses to practice law (registration) and taking away licenses, as a disciplinary measure. I believe that now we must give more to our membership in the form of technical support, bulk procurements, as we are in a better position to negotiate with suppliers, etc. In this sense, we must change the 19th century approach of how a bar association works and adapt to the changing times.”

And Reti notes with a sigh the increasing demands the state makes of its lawyers to share kinds of information once considered absolutely confidential. “Anti-money laundering requirements was the first time we were obliged to report things that had previously been privileged,” Reti says, saying that when that demand first came, “it was unbelievable.” Such  demands are increasing. “Now tax information. And the ‘curious’ state wants ever-more information from us. We have to change or we will lose our clients.” Reti says, “so we are at the border now.”

Although some forms of law firm advertising and marketing are certainly allowed under the Budapest Bar, it has what he calls “a conservative approach with respect to the approval of advertisements.” Reti, who calls himself “the first instance of discipline” of offending advertisements, defends that conservatism. “A minimum of dignity is expected. And it must be fair according to the advertising principles.” 

Unsurprisingly, the definition of “dignity” and “fairness” in the law firm advertising context can be subjective. In explaining that the Bar Association precludes firms from identifying clients in any public statement or announcement, Reti notes that 90% of the members are sole practitioners. On the other hand, he claims to be less conservative than some regarding other advertising questions: “I have no problems with billboards,” he says, as an example. “Some of my colleagues and deputies do, but I don’t.”

Finally, Reti turns to the subject of the highly anticipated new Hungarian Act on the Legal Profession, which is currently being prepared for submission to Parliament in draft form for enactment and entry into force on January 1, 2018. He’s looking forward to the Act, which he says reflects a “very amicable cooperation with the Hungarian Ministry of Justice,” following its invitation to the Bar Association to participate in its creation. The big change, according to Reti, will be the integration of in-house counsel into the Bar for the first time. He is aware that many in-house counsel worry that they’ll be overwhelmed by the lawyers in private practice and see their concerns ignored or minimized, but he dismisses the possibility. “They don’t know us,” he says, smiling.

Reti emphasizes that the idea for the integration was initiated by the Ministry of Justice and not the Bar Association.  “This is very important: this was not our idea. We never initiated this. The government would like to see a simple, transparent organization where everyone is registered. They would like to see some quality control.” Still, he says, “I am very happy about this. I am absolutely happy. I don’t want to work with an unhappy group. I want to see a win-win. If this is a step forward for everybody, then yes. If this is torture for anybody, then no thank you. We could even do just registration with no disciplinary power. Or in-house counsel could get a self-governance body within the Bar Association. Whatever they want, the Budapest Bar is happy.”

Happy he may be, but Reti, who’s turning 60 this year, may not be around much longer to evaluate the ultimate success of the integration, as he says he doesn’t know yet whether he’ll run for a fourth term. He smiles one last time. “We’ll have to see.”

This Article was originally published in Issue 4.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Wolf Theiss Budapest Partner Janos Toth Interviews Gabor Orosz, Associate General Counsel and Legal Director EMEIA of National Instruments Corporation.

J.T.: As the Associate General Counsel of National Instruments Corporation you are in charge of legal affairs for Europe, Middle East, Africa, and India. How would you define your role, what are the main challenges posed by your role, and what do you enjoy the most?

G.O.: For the last 15 years, it has been a remarkable experience to serve National Instruments (NI), starting as an outside counsel for Hungary, then quickly joining the in-house team in Austin, Texas, to work closely with our General Counsel, David Hugley as my mentor, and prepare for a broader role of overseeing our legal matters for all of Europe. After two years in the US and in the UK, I was able to return to Hungary as European Legal Director and start building the legal team that is currently in charge of supporting over 40 NI entities in the EMEIA region as well looking after legal affairs in countries where we work with resellers. There was about a year-long period where I was asked to manage our legal issues for Japan, Korea, and Hong Kong as well, which was quite an experience.

We manage the full range of practice areas, from commercial and licensing matters through M&A, all the way to various aspects of legal compliance, with many topics in between.

I feel truly fortunate to have a world-class in-house team to work with in Hungary, which is certainly not a standard setup for a US public company. Most of the senior colleagues have around a decade of NI tenure, so we have a solid and highly engaged department, with significant knowledge and understanding in terms of the business and strategy of the company.

I wouldn’t particularly call out any specific challenge and will say that as long as you view this job as an exciting framework for being able to attend to matters in so many cultures and work with people from a variety of backgrounds, every day will carry its own unique learning opportunities.

J.T.: I understand that you have a competent legal team of three lawyers at your Hungarian headquarters. What kind of legal work do you tend to carry out in-house and what matters do you prefer to hand out to external counsel?

G.O.: We would be nowhere without a highly capable network of outside counsels in the countries we cover, most of whom have been working with NI for between 10 and 15 years, with several of them for over two decades. We are often subject to jokes suggesting we should be bringing in more litigation work, but the reality is that we tend to have a good track record of avoiding litigation to the extent possible. The in-house team primarily supports the vast majority of our commercial activities, and we will mostly turn to outside counsel when local legal knowledge and/or a license I,s required. Typical areas include regulatory matters, labor and employment, and real estate transactions, and we always involve external counsel for M&A type work.

J.T.: Who is the decision-maker in selecting an external counsel and what are the criteria in selecting the firms you will be working with? What tools do you use to learn more about their capabilities?

G.O.: For the region, I am usually in the position of making the decision on the choice of outside counsel. We always try to carry out a fair amount of research before staring an interviewing process in a given country and we identify a short list. The criteria really depend on whether we are looking for a firm to support us with a full range of day-to-day matters or whether we have a specific assignment and will look for some niche expertise. In the first case, a key consideration is that we gain confidence in the firm’s ability to provide us with everything needed at a high quality level, with proper attention and turnaround times and at a competitive price, of course, with a partner and a senior associate dedicated to the NI account who familiarize themselves with our business and products. In the second case, we will go for the strongest firm we can find for a certain topical area. In any case, we are one of those “old school” clients where personal impressions still matter more than simply looking at the brand name of the firm.

In terms of assessing a firm’s capabilities, we will reach out to existing external counsels and see if they can give us any referrals. We will also look at rankings from the usual sources and will check out the websites of the firms we would interview. In almost all cases we would travel to the specific country and carry out a thorough interview process before coming to a decision. You can probably tell that outside counsel selection is something not taken lightly at National Instruments, which has always been a matter of principle for our GC and also one of the first things I had learned from him when he first hired me as an outside counsel.

J.T.: When you rely on external counsel, do you have a panel of law firms you work with or do you pick them on a case-by-case basis? Do you prefer to use the same law firm in different jurisdictions and/or different mandates?

G.O.: Once we have picked a firm, we tend to be very loyal clients on the long run. Unless there is a matter that clearly requires unique expertise, we would largely stick with a “one-stop-shop” concept. What has proven to be the case several times is that our general firm would actually refer us to the appropriate expert even outside their offices, should we face a situation where we need some additional knowledge and experience.

There are some exceptions, primarily in countries where NI has more sizeable operations, where we would by default work with a panel of firms due to higher complexity levels. We also have a couple of firms that we would work with for EU scale regulatory projects in areas such as data protection, customs and export compliance, etc.

I can only think of one example, where for several years now, we have been using one firm, very successfully by the way, for multiple jurisdictions in South-East Europe.

J.T.: What do you expect from a law firm? Beyond those elementary requirements that it “understands your business and the sector needs,” are there specific criteria a potential law firm should prove to meet your expectations?

G.O.: Obviously, expertise and experience will matter the most as well as having an interest in attracting NI as a high-tech client. We are a company with an employee-friendly culture regularly ranked among the best places to work in multiple countries based on various survey formats. It is therefore also important for us to find a firm whose values tie in nicely with ours, primarily around respecting the individual. Very often, even in the first interview, I would ask the partners giving us their pitch if it was possible to have a tour of the offices where the lawyers work and also have the opportunity to meet the associates who would be assigned to our account.

We also place an emphasis on the fee structure and, as many other companies, are looking at ways to keep legal spend at rational levels, without compromising on quality. 

J.T.: How can a law firm make the cooperation with NI more efficient and effective?

G.O.: I would put a little twist on the answer for this question in that we strongly believe that, as clients, we shouldn’t only set expectations to the firms we work with in terms of alignment and always meeting our requirements, but prefer to actively work together, taking the time to explain business rationales behind decisions and putting assignments in strategic perspective. This really helps with building a trust-based and more personal relationship. 

Seven years ago we launched an initiative where every other year we would invite the in-charge partners from all the firms we work with in Europe to Budapest and spend two and a half days together in a conference setting discussing NI-specific legal topics, but also invite a couple of our executives to talk about the business, new product offerings, and application use cases. We also arrange some cultural and team building activities that are always a lot of fun. That firms commit their partner time to this event is always a positive for us – and we always receive exceptional feedback on how valuable these occasions are for outside counsels as well, not only from a client=relations perspective but also in terms of NI facilitating a valuable networking event for these colleagues from different parts of Europe. Next time we plan to invite external counsels from the Middle East, Africa, and India as well, which promises to be an even more interesting mix of colleagues from various legal backgrounds.

J.T.: What source/media do you prefer regarding the receipt of updates on legal issues, legislative changes, regulatory developments etc.? Do you prefer face-to-face meetings (business breakfast/conferences/tailor-made in-house trainings) or electronic sources (newsletters, webinars, etc.)?

G.O.: I really value all of the above and, if done at the right quality level, find these methods the most credible marketing tools for any serious firm. I wish I had more time to attend face-to-face events, but the reality is that it is more likely that I will read through a newsletter. I also encourage my colleagues to attend webinars falling within their areas of practice.

J.T.: What kind of legal/regulatory challenges does a US-based company face in our CEE region? 

G.O.: I would say we probably need to be proactive and vigilant around topics that are similar to any other company in the B2B technology sector, namely environmental compliance, data privacy, labor law requirements, competition, and anti-bribery legislation, just to call out a few. I would not say that the CEE region is any more challenging for us than any other region of Europe.

J.T.: And finally allow me a personal one: if you had the opportunity tomorrow to start life afresh, would you pick the profession of lawyer again?

G.O.: Good question. Let me start with saying that my wife, who is also a lawyer, and I already encourage our children (ages seven and ten) to keep an open mind about becoming engineers, doctors, teachers, or even musicians, and not necessarily lawyers. At the same time, if I were to decide again, I would likely become a lawyer again in a heartbeat … it is a rewarding profession to have if you feel you can make a small positive difference around yourself day-by-day. 

This Article was originally published in Issue 4.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

What one part of your job do you enjoy most, and why?

Marietta Vidali, Corporate Communications Manager, Drakopoulos, Athens

The most satisfying part of my job is the ability to co-decide on certain issues, thus impacting the firm in a positive way. Our flat organizational structure enhances my role’s involvement in the decision-making process, allowing for faster response times to business challenges and an open, collaborative environment that promotes brainstorming and innovation. As a marketer, I really enjoy working for a firm that relies on ideas, innovation, and employee engagement to keep up with a quickly changing business landscape.

Marta Albrecht-Niedzialek, Marketing Communications and Operations Manager, 

Wolf Theiss, Warsaw

Genuine and effective communication with lawyers and co-workers is a key. For me, it is all about having the proper attitude for a situation. I’m a devoted marketing communicator. I really enjoy helping our lawyers become marketing communicators, too. I feel a deep satisfaction when working with colleagues who are eager for knowledge. It’s so nice to see the positive effects multiply as every new lawyer becomes an ambassador of Wolf Theiss.

Alexandra Yoshida, Business Development and Marketing Director, Karanovic & Nikolic, Belgrade

Learning what is going on in the market and working with my partners to find strategic ways to be a part of it is interesting because it requires a certain framework of thinking that pushes us to understand and take advantage of that which we see as opportunities in the market, to help further our role in protecting and advancing our clients’ businesses and professions. Being able to foresee potential outcomes and guide our team towards those opportunities is fundamental to the development of the business.

Katalin Kovacs, Head of Business Development, CMS, Budapest

What I enjoy the most in my work is interacting with clients and colleagues and learning more about what the real important things for them are. These informal discussions and their everyday challenges, successes or concerns can show us a whole different perspective and help us stay focused when planning our BD activities or marketing campaigns. Also, I have the luck to work with some great minds of the legal world; that is very inspiring and leads to no dull existence.

David Clark, Chief Operating Officer, Akol Ozok Namli Attorney Partnership, Istanbul

Being a top tier law firm capable of the most challenging domestic and international projects is essential but not enough for us; doing this by developing a group of people who are strongly motivated to work for each other and reflecting that into a team that clients can really enjoy working with, now that is a challenge that I love.

Connecting with people, both internally and clients, to create something great for everyone involved is what gets me up each morning with a smile. This is a human business after all.

Agnes Hargitai, Business Development & Marketing, Wolf Theiss, Budapest

This is not an easy question especially with such a complex job that requires multiple personalities aligned to 20+ lawyers at the same time, not to mention the need to be constantly creative, agile, and persistent as well as always up to date with the latest economic matters. This is very challenging, and I think this is the part of my job I enjoy the most. I also enjoy providing direct and valuable support to our lawyers in a way that really makes a difference, providing the background and a stable base for their work. I love the freedom in my work and also my role as a member of a great and supportive international team that provides me opportunity to brainstorm, to think outside the box and come up with unusual solutions in order to put new ideas into motion. 

Petra Svoboda, Head of Communications CEE, Taylor Wessing, Vienna

Many people – including Communications experts – might think that law firm PR/marketing is somewhat unvaried. The opposite is the case. I truly enjoy the multifacetness of our job. It’s all about different practice areas (and different topics even within these practice areas), different industries and – being an international law firm – different countries and local particularities. No two days are the same!

Hristo Deliolanov, Marketing Manager, Schoenherr, Sofia

I really enjoy organizing our corporate events – both internal and external. My first really serious professional challenge in Schoenherr, back in 2007, was organizing a teambuilding in the Bulgarian mountains for more than 100 people from all our offices. It was really successful in general and made a good start with a consecution of different events. The thrill of event organization doesn’t disappear, because each project starts all over again, and no matter how successful your last event was you face the same challenges each time. And the biggest challenge is to make it memorable. To make people remember and even talk about your event is more or less mastery in our age of distraction and profusion of information and experiences. And this depends mostly on the idea and creativity and then on the budget. 

Olivia Popescu, Marketing & PR Consultant, Maravela | Asociatii, Bucharest

Whether it be the particularities of legal marketing, clearness of the outgoing news, the numerous professional events, the wide international exposure and the fast-paced working environment, everything leads to a varied and fulfilling job, suited for a dynamic individual. And the one part I enjoy most about my job is its complexity. Activity-wise, the continuous international liaising and interaction is one of my favorite job-spec components.

Tanja Arnegger, Head of Marketing Strategy & Developments, Schoenherr, Vienna

I love analytics, so the digital part of marketing is definitely my favorite. Everything is quantifiable and measurable, and no realistic planning can be done without data. You can learn a lot from your website’s traffic, as well as the entire spectrum of analytics available nowadays. Data is such a great basis for any Web, Content, SEO and Social Media Strategy.

Iva Vosolova, Marketing Manager, bpv Braun Partners, Prague

Marketing for an attorney´s office is challenging for me every day. Sometimes it can be very hard to convince the team that we also have to focus on long-lasting goals. Therefore, I really enjoy when my colleagues put aside their focus on just billable hours for a while and are able to contribute with their great input. Such knowledge exchange and their contributions with new issues and topics is something that I really appreciate in my job. When I feel that my colleagues share the goal of being well presented on the market and succeed I am happy. I feel very content after organizing a special event or seminar to experience directly the feedback from our clients and business partners. Obtaining a positive reaction to our just-implemented marketing activity, I know that my work is really worth it.

Kalina Dimitrova, Marketing Expert, Dimitrov, Petrov & Co., Sofia

What I most enjoy about my work is the chance to make the others’ work more visible so that their dedication and professionalism do not go unnoticed. Though I was put in charge of marketing only recently, I have been with Dimitrov, Petrov & Co. for over eight years now. I have seen the law firm grow and change offices, people come and go, grow up, get married, have children. What remains the same, however, is the immense energy, time, and zeal my colleagues put into their work. I had not seen anyone work so hard before I joined the law firm, neither have I seen it elsewhere since. My job is to help my colleagues obtain the acknowledgement I do believe they deserve, and every little step in this direction makes me really happy.

Larysa Syvak-Anina, Marketing and PR Manager, Baker McKenzie, Kyiv

I enjoy the act of communicating itself, with entirely different people every day – from lawyers to journalists, designers, and, of course, clients. Each individual shares his or her ideas and thoughts, inspiring me to be more creative and effective in my work. As a Marketing and PR expert within a global firm, it’s fantastic to be able to communicate with my colleagues around the globe.

Tatyana Brezhneva, Head of Marketing, CMS Moscow

While marketing services is a very interesting sphere in general, it has a lot of routine work. That’s why I am particularly excited about getting tangible results. Winning a new client, getting a higher rank in legal directories, feeling the smell of freshly printed brochures, or seeing happy faces after a client event make the efforts – at times very big – worthy and rewarded.

Erik Uszkiewicz, PR and Marketing Manager, Schoenherr, Budapest

I have always loved meeting people and getting to know them. One of the key parts of this job is to design and maintain a great deal of personal contact with a lot of people and to find a common harmony with them. Whether meetings with clients, organizing events, or brainstorming with lawyers, personally for me the most exciting part of my job is to get to know their stories, think together, use our creativity, and learn much more about the situations in which we may help each other. This is an amazing part of this work and is beyond the realm of law. Conducting all of this in an international environment can even be more fun where languages, cultures, and customs meet as an added value not only for me personally, but for the organization as well. No wonder that the marketers’ room is the loudest.

Jana Stevanovic, Corporate Communications Manager, Moravcevic Vonovic and Partners in cooperation with Schoenherr, Belgrade

My favorite part of my job is creating, influencing, and sustaining the intangible culture that makes the firm so special and unique. I love spending time with lawyers and clients, soaking up their experiences and feelings connected to the firm. Transforming these experiences into stories enables me to coach and guide the lawyers of all levels of seniority through uncharted waters of marketing and business development in a law firm.

Natalia Blotskaya, Marketing and Business Development Manager, Avellum, Kyiv 

I enjoy planning our marketing activities and budgeting for months ahead. Most of all, I like to follow plans and enjoy the results of our marketing work. I prefer to have all activities under control – it helps to avoid any unwelcome surprises. I have aimed at paying maximum attention to our planning for the last 18 months, during which time Avellum was launching a number of complex and strategic projects, including the updating of our corporate visual identity, launching a new website, and developing of digital strategies targeted at our clients and potential employees. Naturally, sometimes initial plans are revised, since our fast-paced world is changing so quickly, and the deadlines might be really tight. However, I enjoy proper planning and analysis, which make it halfway to success and start to be rewarding.

Biliana Tzvetkova, Business Development and Marketing Manager, Djingov, Gouginski, Kyutchukov & Velichkov, Sofia

I guess the one thing that most motivates me being a BDM is that I’ve managed to acquire valuable practical knowledge of the Bulgarian economic and legal framework. 

This Article was originally published in Issue 4.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On February 2, 2017, CEE Legal Matters reported that David Shasha, a well-known figure for several decades in CEE’s emerging legal markets, had agreed to come out of retirement to join Poland’s Domanski Zakrzewski Palinka law firm as Counsel. Shasha, who will be working in London, will co-ordinate DZP’s relationships with law firms, financial institutions, and companies located in the United Kingdom, as well as supporting DZP’s lawyers advising international and Polish clients.

We spoke with Shasha and DZP Partner Krzysztof Zakrzewski to learn more about the arrangement, and spoke with Partners from two other CEE-based law firms with representatives in London – Sayenko Kharenko and Integrites – to see how their English strategies and operations compare.

David Shasha Spreads the DZP Gospel 

DZP Partner Krzysztof Zakrzewski says that “an important part of [DZP’s] business has been ‘London related’ for many years,” and thus the firm’s decision to put someone on the ground in the UK “is not a new idea – we were contemplating ‘opening’ in London for quite a while.” Zakrzewski says he and his colleagues considered various options as to what form that presence would take, “including opening a full office, opening a representative office, or forming a joint venture of some kind with another firm from continental Europe.”

Eventually, they decided to reach out to an old friend. 

David Shasha has worked with international law firms for over 30 years. From 1978 to 2001, before joining DZP, he worked at Clifford Chance (where, among other things, he founded the firm’s Warsaw, Prague, and Budapest offices), Simmons & Simmons, Gowlings (now Gowling WLG) and Watson Farley & Williams. He retired from Watson Farley & Williams in December 2015, taking a full year off before agreeing to work with DZP.

The opportunity to join DZP came unexpectedly. “I hadn’t been looking for a job,” Shasha laughs. “I promised myself when I retired that I would spend a year not doing any work – I would spend a year living (as opposed to working) in London, taking advantage of the chance to visit many of the places I have never previously had time to see.” Still, when old friend Zakrzewski reached out to him to discuss options, Shasha was game. “We met up initially early last year, and had a number of conversations during the year about what I might be able to do for DZP. We discussed several ideas and plans and reached an agreement at the end of the year.”

And in joining DZP Shasha capitalizes on a long relationship with Poland. He says, in describing his history with the country, “I was the partner who was responsible for opening the Clifford Chance office in Warsaw in 1992. I spent long periods of time in Poland from 1991 to 1995; I had a flat I lived in here, and I attempted to learn Polish (unsuccessfully). But I did get a Polish girlfriend, who subsequently became my wife; we’ll be celebrating our twentieth wedding anniversary this year!”

Still, in his new role, Shasha will remain in his native England. “I’m going to be based in London. That’s home. I will occasionally visit Warsaw to show my face to people, but it’s a London-based role. It’s arranging introductions to contacts in London and elsewhere, for the purposes of business development for the firm. It’s supporting the firm’s marketing and business development initiatives generally, and helping to raise the firm’s profile.”

Shasha’s target list is broad. “The principal targets are law firms,” he says, “but also includes some corporates and other institutions – private equity houses, funds, and other financial institutions – who are interested in and active in what’s going on in Poland.”

Shasha emphasizes that DZP is not opening an office in the UK, nor currently planning to do so. Nor will it be relocating any Polish lawyers to London as part of this initiative, though DZP lawyers will of course continue to make regular visits to the city. Still, neither Shasha nor Zakrzewski will close the door on the possibility of opening a formal office down the road. “Of course we do not exclude such option should a need for further development occur,” says Zakrzewski. “At this point, however, we decided that a formal representation by David is sufficient.”

Ultimately, it appears that DZP’s decision to hire Shasha for this new role was a matter of the right person being available at the right time. Zakrzewski says, “as our business in London was growing and as we were seeing even more opportunities – the need for a London presence became more and more urgent. No mystery. We started when we felt we were ready. We did not plan to do it on this given date a long time ago. We also did not plan this move in relation to any development or political situation, like Brexit. It all developed quite naturally.”

Contact Office: Integrites’ Office is a Bridge to CEE/CIS

In September, 2016, Integrites announced the appointment of Ivanna Dorichenko as new Head of the firm’s London office and leader of the firm’s newly established London-based International Trade & Commodities practice. Prior to joining Integrites, Dorichenko worked for four years in the London offices of Clyde & Co and another two with Hammonds, which later rebranded as Squire Patton Boggs. She was the first Ukrainian barrister ever called to the bar by the Inner Temple.

In a statement at the time, Integrites Senior Partner Vyacheslav Korchev said, of Dorichenko’s decision to join the firm, that: “Given her skills, experience, and well established reputation on the London legal market she will undoubtedly add the exquisite London touch to our international operations, which will place us in a unique position on Ukrainian and regional legal markets.”

Integrites itself only opened its doors at the end of 2005. According to Dorichenko, it opened its London office less than five years later, in 2010, “because of the increasing volume [of] work both ways, the need to be here, the need to work as a main point of contacts for our clients who needed something in England, and then obviously to grow the client base, grow the relationship base, and increase the general visibility and workload, et cetera.

And unlike DZP, Integrites has chosen to operate an actual office in the English capital, though at the moment it’s staffed by only two lawyers. Dorichenko explains that “we are of course not a full-service office but rather a permanent contact office from which we do our niche commodities work (my practice) and advise/represent a small number of international clients in trading matters, including our clients from the CIS/Black Sea trading area.”

Dorichenko insists that Integrites – which also has offices in Ukraine, Russia, Kazakhstan, China, and the Netherlands – understands the expectations of clients in London. “Our founding partner’s ideas for opening the office in London were. we wanted to make sure we were up to the standard, and we would be able to compare ourselves to the local standard, and we would be able to help our clients as much as we can.”

Dorichenko is skeptical that an English presence, if focused only on business generation and marketing, will be enough for the most demanding clients. “I don’t believe that a pure sales person can do the job,” she says. “Because you should be someone who understands how the work is done, you should do the work, because that is how people will perceive you as their equal, because here in London people are very robust, people are very evidence-based. They don’t want to talk to sales people. Cold calls don’t really work here.”

Thus, Integrites’ London office serves as a conduit between the London-based firms who are sources of referral work to the firm’s Ukraine and CIS presence, and the firm’s own clients coming from that part of the world who may need English assistance. According to Dorichenko, “we really function as a bridge.”

Sayenko Kharenko’s “Value Added” Representative Office 

“Our story is simple,” says Sayenko Kharenko Founding Partner Vladimir Sayenko. “We noticed that London has by far the largest concentration of our international clients and decided that we want to be closer to them, as well as to law firms that often refer business to us. The office also helps us a lot when partners and clients of the firm travel to London.”

Sayenko Kharenko’s office in London opened its doors in 2013, led at the time by Andy Hunder, who had earlier launched the London office of Magisters (before that firm’s merger with Egorov Puginsky Afanasiev & Partners). According to Sayenko, in addition to coordinating Sayenko Kharenko’s business development efforts in London, “Andy’s task was to launch a government relations practice. The challenge back in 2013 was to convince our typical multinational clients that GR services could be provided in Ukraine without raising typical compliance issues that [such] lobbying services used to raise in Ukraine. Coordination of this practice from London by a UK expert who used to work for several multinationals helped us position our firm properly in this new segment.” 

Currently, the firm’s London office is run by Eugenia Rebotunova, a Ukrainian, Russian, and New York-qualified lawyer with a background involving time spent at both Altheimer & Gray in Kyiv and White & Case in Moscow. According to Sayenko, “while Eugenia primarily develops and maintains relationships with our London-based clients and friendly law firms, we also rotate several Ukrainian lawyers in the London office to advise clients who are interested in doing business in Ukraine and prefer to have face-to-face contact with their legal counsel. Ukrainian clients also often require support choosing lawyers and other providers for their business needs, arranging meetings and sometimes they even need help with basic logistic support during their trips to London. Finally, our firm actively participates in the activities of various professional organizations, such as the British-Ukrainian Law Association, and in the life of the Ukrainian diaspora in the UK. All of these activities keep our team in London busy and we are think that our London team will grow in the near future.”

Sayenko emphasizes that the firm’s London office is a “pure representative office with auxiliary functions,” and that “we do not handle any matters through the London office at the moment, although the model might change in the future.” He points out that “English clients asking for English-law advice would not be the target client for a Ukrainian law firm in any case,” and that “even when it comes to Ukrainian law advice, these matters are handled by the Kyiv office.”

Still, the firm’s representatives in London do more than business development. “There are matters where clients appreciate personal meetings with their trusted advisors who will hold their hand in a difficult transaction or a complex dispute matter,” Sayenko says. “That is why senior Ukrainian lawyers rotate on a regular basis in London, essentially coming on lengthy business trips.”

Clients appreciate the service, Sayenko says. “When it comes to Ukrainian clients, the assistance they require is not legal advice, but ‘value added’ practical advice, which comes at no cost to the client. We also have some clients who schedule important meetings on sensitive matters outside of Ukraine for confidentiality reason and London serves that purpose perfectly well.”

Be that as it may, BD is hardly a secondary consideration. Sayenko concedes that “the main function of our London office is clearly the promotion of the firm’s capabilities in Ukraine to potential clients and major international law firms and cooperation with international legal publications and directories, as well as other BD activities.”

By Graham Conlon, Partner, CMS

This Article was originally published in Issue 4.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Dan Cocker is a Partner in Allen & Overy’s Global Projects, Energy, and Infrastructure Group. He covers the Central and Eastern Europe region and has been based in Warsaw since 2011, after previous stints in the firm’s London, Frankfurt, and New York offices. 

CEELM: Run us through your background, and how you got to your current role. 

D.C.: I started out in Allen & Overy’s London office and spent time on secondments to our Frankfurt and New York offices, specializing in projects, energy, and infrastructure. When I began focusing from London on transactions in CEE and SEE, it made sense to move to the region and become more embedded in the regional market. We already had – and still have – English-qualified lawyers in our Prague, Bratislava, and Budapest offices. We didn’t then have English-qualified lawyers in our Warsaw office. Since Poland is the biggest economy in the region, Warsaw was an excellent choice as a hub for our CEE and SEE regional English law banking practice. I’ve been here for almost six years.

CEELM: Was it always your goal to work abroad? 

D.C.: At school I developed a great enthusiasm for foreign languages, so I always had the idea in the back of my mind. One of the reasons I joined A&O was its global presence and the opportunity to work in offices outside London. Moving to the CEE/SEE region was particularly attractive to me, having an energy and infrastructure background, since the region offers great opportunities for development of new projects in this sector.

CEELM: Tell us briefly about your practice, and how you built it up over the years. 

D.C.: My practice covers the whole of English law banking work and I focus particularly on projects, energy, and infrastructure, including more commercial aspects such as construction contracts, public-private partnership contracts, power purchase agreements, and vessel charter parties. 

Our regional team acts for sponsors, borrowers, lenders, export credit agencies, and governments, so we get to see transactions from all angles and at all stages. We have worked on transactions throughout the region, from Estonia in the north to Turkey in the south, from Austria in the west to Azerbaijan in the east and more or less everywhere in between.

Many of the more challenging projects we have worked on have happened thanks to the involvement of international financial institutions, with whom we often work closely alongside all of the other parties mentioned.

CEELM: Do you find Polish clients enthusiastic about working with foreign lawyers or, all things considered, do they prefer working with local lawyers? 

D.C.: The Polish legal market is a sophisticated one, and many of the transactions have a cross-border element, so clients require both, working closely together as a team and offering local depth combined with global breadth. 

CEELM: There are obviously many differences between the Polish and English judicial systems and legal markets. What idiosyncrasies or differences stand out the most? 

D.C.: For legal systems, the answer is that there are very few differences that should stop transactions from being done in the way the commercial parties want. Clearly, there are many inherent differences between Polish law and English law arising from the civil law versus common law development of the two legal systems. But our task as lawyers is to create as much legal certainty around a transaction as possible. For example, the concept of the trust is not recognized in Poland, but we can almost invariably put in place Polish law structures that achieve the same effect.

As to legal markets, the concept of the Magic Circle [of law firms] is not as widely recognized in Poland as in, for example, the London market. We have to make the extra effort to distinguish ourselves on quality of advice and service.

CEELM: How about the cultures? What differences strike you as most resonant and significant? 

D.C.: Immediately before moving to Poland I was working on a Latin American oil and gas transaction that involved meetings of about 15-20 people. Held in Texas, these meetings were very lively and often loud, with everyone having lots to say. My first transaction in Poland was a restructuring, which also involved meetings of about 15-20 people. The contrast between the meetings could not have been starker. The Polish meetings were much calmer and the participants more measured in their contributions. Both deals were completed successfully, but the two journeys to reach that point felt very different.

CEELM: What particular value do you think an expatriate lawyer adds – both to a firm and to its clients? 

D.C.: Bringing global experience into the region as an expat has been valuable in at least three ways. Part of my practice is about helping A&O’s global clients who want to do English law transactions in the CEE/SEE region by providing a team of globally experienced advisers who know and understand the local market. Another part is about offering clients based in the region the benefit of A&O’s global expertise for transactions in their domestic markets. A third dimension involves supporting regional clients on transactions beyond the region, which has, for example, led to our regional team working on projects in Egypt and Iraq.

CEELM: Outside of Poland, which CEE country do you enjoy visiting the most? 

D.C.: For work, the Czech Republic, since I’ll often work from our Prague office, and my colleagues there have done a great job of showing me their fantastic city. For pleasure, Slovakia, to spend time in the mountains. For the last five years my regional colleagues and I have organized a mountain walking trip. We’ve visited the Slovak Tatras, the Polish Tatras, the Rax Alps in Austria, Jeseniky in the Czech Republic, and Mala Fatra in Slovakia. Of those places the scenery of the Slovak mountains is the most stunning. I’m keen to climb many more mountains in the wider region, including in Georgia, where we’re working on a hydropower project. When I go there for meetings I’m often the only person on the flight carrying a laptop bag, while everyone else has a rucksack and walking boots, which makes me a bit jealous.

CEELM: What’s your favorite place in Warsaw? 

D.C.: The Old Town. My wife and I can be seen through all seasons of the year taking a Cavalier King Charles Spaniel named Baltazar on a late evening walk through the Ogrod Saski (the Saxon Gardens) and along the Krakowskie Przedmiescie (the main street through the Old Town). Baltazar tries to go take us into every bar and restaurant along the way, and sometimes we let him have his way. The area through which we walk provides a good reminder of how Warsaw rebuilt itself and – what I most like about living in Warsaw – that the city is constantly developing. Warsaw is a city on the rise. I believe that Warsaw’s best days are ahead of it.  

This Article was originally published in Issue 3.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

The Deal:

In November 2016, CEE Legal Matters reported that Kochanski Zieba & Partners had advised Echo Polska Properties N.V. on its EUR 265 million acquisition of seven office buildings in Krakow, Gdansk, Katowice, and Lodz from Echo Investment S.A. The sellers were advised by Weil Gotshal & Manges. 

We reached out to Kamil Osinski, the Partner at Kochanski Zieba & Partners (KZP) who led the firm’s team on the acquisition, for more information.

CEELM: How did you and Kochanski Zieba & Partners become involved with Echo Polska Properties on this matter? 

K.O.: At the beginning of the year we represented Redefine Properties, a South African real estate fund, on their acquisition of 70% shares in Echo Polska Properties (at that time called Echo Prime Properties), a Dutch company holding 18 commercial real estate assets throughout Poland. The transaction continues to be the largest commercial real estate transaction ever in the Polish market. In view of the success of the transaction and the fact that Echo Polska Properties’ largest shareholder is Redefine Properties (our original client), we have been retained to act on many of Echo Polska Properties’ continuing and future real estate transactions. Moreover, in the original transaction, a mechanism was agreed whereby Echo Polska Properties (EPP) would have the “right of first offer” on 10 commercial (office and retail) real estate properties. It is seven of these properties that the current transaction relates to – therefore, we had first-hand knowledge of the properties and the terms agreed regarding the “right of first offer” (ROFO).

CEELM: What was your initial mandate when you were retained for this project?

K.O.: We were appointed as legal advisers at a very early stage and were involved in term sheet negotiations, which allowed us to highlight any commercial or legal issues from the outset. This proved highly beneficial, and we were able to manage the project effectively knowing our client’s intentions. On occasion we have been instructed to represent a client at a later stage in the transaction, which can prove problematic (but certainly not impossible), as you are forced to try to get up to speed with a transaction quickly.

CEELM: Who were the members of your team, and what were their individual responsibilities?

K.O.: Due to the structure of the transaction, our legal assistance covered not only real estate issues but also transaction structuring and financial issues. For that reason the team dedicated to this transaction included lawyers from the Real Estate Department and the Banking and Finance Department. The whole team was led by myself as the Partner of the Real Estate Department and Senior Associate Andrzej Zajac. We were responsible for deal management, preparation of the structure of the transaction, and negotiation of the transaction documents. We were supported by Associates Marcin Rzysko, Katarzyna Krolikiewicz, and Malwina Stajniak, who were generally responsible for complex due diligence of each of the acquisitions. The Banking and Finance team led by Partner Szymon Galkowski and Senior Associate Klaudia Szymannska-Rutkowska was responsible for all financing aspects of the transaction.

CEELM: How was the agreement structured?

K.O.: As we are currently in the middle of the interim period between conclusion of the preliminary sale agreement and final sale agreement, not all details of the transaction may be provided. However, in general Echo Investment indirectly holds the shares in the special-purpose vehicle that is the direct holder of the real property on which the relevant office projects are being developed. EPP indirectly invested some amount of the equity required by the SPV to complete the development of the office projects. In consequence, Echo Investment agreed to grant EPP a right of first offer for those office projects. At the time that EPP exercised that right, the transaction regarding the purchase of seven real properties in Poland was envisioned to be structured as follows: (i) each SPV, as the purchaser, would enter into a preliminary sale agreement with the relevant seller and commit to purchasing each property upon the completion of the construction and commercialization process; and (ii) where the total leasable area on a particular property was not fully commercialized, the seller of that property would provide the SPV with a rental guarantee for an agreed period.

CEELM: What was the most challenging or frustrating part of the process?

K.O.: In our opinion there were no frustrating moments during the negotiation. To the contrary, we found the whole process to be exciting and challenging – and as a team we rise to a challenge. This was mainly caused by the fact that seven separate agreements concerning seven buildings located in four cities in Poland were to be concluded simultaneously – which meant that a vast number of documents needed to be reviewed, revised, and signed. The operation required the full involvement of the parties, lawyers, other advisors, and supporting staff. In the end, good cooperation and the experience and understanding of both parties made an almost impossible task (considering the tight time frame) possible.

CEELM: Was there any part of the process that was unusually or unexpectedly smooth/easy?

K.O.: In such transactions, there tend to be no easy parts. Full dedication to the task at hand allowed us to overcome all the difficult aspects associated with the transaction. Perhaps from the outside looking in, the transaction seemed an easy process, but that’s the art of a lawyer. We were very much helped by the professional attitude of the other party and the lawyers representing Echo Investment. That allowed us to overcome any difficulties and to come up with win-win solutions for both parties of the transaction.

CEELM: Did the final result match your initial mandate, or did it change/transform somehow from what was initially anticipated?

K.O.: The final result did not differ significantly from the initial mandate; however, as you can see from my answers above, the transaction referred to seven instead of 10 projects covered by the right of first offer.

CEELM: What individuals at Echo Polska Properties directed you, and how would you describe your working relationship with them? 

K.O.: We worked on a daily basis directly with Chief Executive Officer Hadley Dean, Chief Financial Officer Maciej Drozd, and Chief Operations Officer Rafal Kwiatkowski. The complex structure of the transaction, the number of office projects to be acquired simultaneously, and the timing of the transaction required close cooperation between the client from a commercial perspective and KZP from a legal perspective. In consequence, many conference calls, internal meetings, and negotiations took place, and in our opinion this not only facilitated the process of formalizing various transaction documents but also accelerated it. We really appreciate working with EPP’s representatives as their everyday experience and wide and detailed knowledge regarding commercial aspects of particular projects provided us with a better understanding of the deal, which allowed us to provide them with tailor-made legal advice. It should also be noted that EPP was at the time of instruction a completely new company, and new individuals were joining the company throughout the project. While there were pre-existing relationships in place, the project proved to be quite a bonding experience for all involved, and I believe the team came together very well.

CEELM: How would you describe the working relationship with your counterparts at Weil Gotshal & Manges on the deal?

K.O.: Every transaction proceeds much more smoothly where there are professionals on the other side of the table. Both Echo Investment and Weil represented such a professional standard, thus our cooperation went pretty smoothly. Moreover, the fact that this wasn’t the first transaction that we performed together – and the same parties were involved in the earlier transaction – meant that we already knew each other and understood our mutual expectations. This had a major positive impact on our ability to close the transaction within the timelines provided by our clients.

CEELM: How would you describe the significance of the deal to your client, to Poland, and/or to CEE? 

K.O.: The deal is very significant to our client as it allows EPP to further its goal of having Poland’s leading cash-generating platform of well performing office, retail, and industrial assets. The transaction is also very important to Poland because it’s considered to be one of the highest-profile commercial real estate portfolio transactions this year, and yet none of the properties involved are located in Warsaw. We believe this will help set the tone for greater real estate investment in Polish cities other than Warsaw. In terms of the wider CEE region, the transaction is yet another example of how there is growth in investment in real estate from investors originating from regions other than Western Europe and the US – in this case Redefine Properties from South Africa.

This Article was originally published in Issue 3.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

CEE Legal Matters reported in November that a team of 11 lawyers from Polish firm DJBW will join Noerr’s Warsaw office effective January 1, 2017. Of the five Partners in DJBW, four – Witold Danilowicz, Witold Jurcewicz, Radoslaw Biedecki, and Ludomir Biedecki – will move to Noerr. CEE Legal Matters reached out to both Joerg Menzer, Regional Managing Partner of Noerr’s CEE offices in Bratislava, Bucharest, Budapest, Prague, and Warsaw, and Radoslaw Biedecki, who will become the new Office Head of Noerr in Warsaw, to learn more about the move and what led to it. 

CEELM: The natural question is why this onboarding made sense for both Noerr and DJBW.

J.M.: The main idea for us is that we’ve always aimed to be a strong player in the region. We feel we’ve achieved that in CEE as a whole and to some extent within each national market individually – but I think, in many ways, we are somewhat seen as a hidden champion. We work with many major clients – including Daimler and Kaufland, among others – who don’t really allow us to talk about the deals we work on. Maybe we just take such client requests more seriously than others, or maybe it’s the nature of the clients we work with, but, at the end of the day, it means that we are not as visible at times as we would like to be.

Looking at Poland specifically, while we felt we were well positioned there, we also felt that we were not embedded enough in the national market, and therefore we were keen to build ourselves up into genuine local champions. Because we’ve been heavily transactional-focused, the size of the team was limited, which generally is fine – we never wanted to build a huge team – but it was obvious to us that the market was moving and that we needed to move with it. We hired strategic consultants who analyzed the legal market with us. Initially, the DJBW team was presented to us on an anonymous basis following their research and we felt it was a great match.

CEELM: Which consultancy did you use for the project?

J.M.: We used Venturis Consulting Group International – a team that I was already familiar with as they are also members of the Law Firm Management Committee within the IBA. We preferred to work with them over an executive search firm because we felt we needed people who truly understood the business environment and the legal sector as well as practice management challenges when it comes to such a move – it was clear to us this was not going to be a simple recruitment exercise. 

CEELM: What about DJBW? What were the main reasons for your move?

R.B.: We had been thinking for a while now that a firm of 30-40 lawyers is exactly what the market needed – that size would allow for both day-to-day work and some big-ticket-deal executions. Growing to that size organically would have taken a long time. We weren’t necessarily thinking of tying up with a German firm, simply because they tend to have a low profile in the country – indeed, German firms are known more for leaving the market than for coming in. (Laughs) 

Considering the economy of Poland, this makes sense, though. We have a lot of connections in the German market and we have received some nice referrals over time. Joining forces with Noerr in this setting simply made a lot of sense.

CEELM: Was losing potential referral work a concern?

R.B.: Naturally, that was part of the consideration. The pipeline was openly discussed among us, and of course we were aware that we will probably lose the connections with other firms in Germany. But on balance, we hope to be able to compensate with work from Germany, and indeed from across the region, within Noerr.

J.M.: It is also worth pointing out that some of our best-friends’ relationships also overlapped. 

But looking at the business case beyond that, we knew that we needed to cater to the Polish champions and blue chips, and we were realistic in recognizing that we did not have a lot of exposure to them. The DJBW team would offer that exposure, while growing in size to be able to cater to them better. At the same time, economic ties between Poland and Germany, as already mentioned, are significant by any measure and seem to grow every year. Being fully embedded into the local market would allow us to tap into that potential even more. 

CEELM: How large is the team now?

J.M.: Together we are 40 people now. From a practice group perspective, we had little overlap, which is great because it means little friction while allowing us to add a number of complementary practices. We’re keen to be able to look at Venture Capitalists, IPOs, Private Equity, Mergers & Acquisitions, and Fintech, along with some capabilities in litigation, which we’ll likely expand, along with Pharma and IT. 

From a seniority perspective things worked out great as well. We were Partner-driven with a higher leverage and good Junior Associates. The new team comes in with a lot of strong Senior Associates.

CEELM: Blending mentalities and organizational cultures are usually the big challenges when it comes to team mergers. How do you expect these to play out for you? 

R.B.: That’s certainly a challenge, as it is in most such instances, but I think that played a much smaller part for us. We’re not your typical Polish firm. We are more internationally focused, and we ran our firm in a different way. The fact that we were able to communicate differently, openly, and straight to the point helped in bringing the teams together. 

J.M.: Another important aspect is that we don’t buy into the common narrative in CEE: “We are international, therefore I can advise better by default.” We are also not really a German firm – we have 5 offices in Germany, all around CEE, and in Brussels, London, Alicante, and New York, so over one third of our lawyers are not in Germany. This openness is important to us because we are a European firm – we share the same values: excellence, trust, team spirit, and passion for the work we do.

CEELM: Can we expect to see similar moves by Noerr in other CEE markets in the near future?

J.M.: If the appropriate opportunity arises, we will certainly consider it. We always look to strengthen, pending market circumstances. We’re generally conservative enough to say we need to take our time and do these things right. We are not the Dentons type – while we agree at times that pure organic growth is not enough; in many ways, because of the fit between the two firms in this case, it feels organic, as the cultures are very much alike. 

At the end of the day we’re not in the numbers game. We aim primarily to grow in efficiency and in terms of the place and position we hold in the market. I could easily say, “Let’s bring in 50 more people,” but we really want to remain focused as a transactional firm. The approach has worked well for us so far and I bet it will continue to do so.

This article was originally published in Issue 3.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.