Category: Interviews

CEE Legal Matters sat down with Go2 Law owner Hugh Owen to talk about career choices, training others, and his newest project, Go2 Law Training.

CEELM: Why did you decide to leave Allen & Overy four years ago?

Hugh: Allen & Overy is a great firm. I had an amazing experience working there for over 23 years and I met many wonderful colleagues along the way. In fact, we have continued to co-operate on a number of projects right up till the present day. However, working for Allen & Overy, for me personally, was also a high-intensity job that required a lot of traveling. Every time a client says, for instance – can you be in Amsterdam tomorrow morning? – that causes a disruption in your work, in your family life, and so on.

My goal was to continue doing interesting deals, but to have more time for my family. Taking off on my own four years ago and establishing Go2 Law seemed like the way to achieve that goal. So, even though this decision was a big risk, I decided to go through with it. My leaving was very amicable and I remain close friends with many people at A&O.

CEELM: What have you been focusing on, following your departure from Allen & Overy?

Hugh: I advise on the English law aspects of M&A transactions, but I like to focus on trying to share my 25 years of experience on deals. I am not necessarily chasing after the most prestigious and largest deals (though they are always nice to have). Instead, I want to actually help people who need good, steady, experienced advice. I felt that my expertise would prove invaluable to entrepreneurs and businesspeople who, although experts in their own field, may not be as well-versed in M&A transactions, or other lawyers who just like to have a helping hand in the background. For entrepreneurs, the deals that they are doing may be extremely significant milestones for them, and I like to help them navigate through the process safely.

CEELM: Why did you decide to launch the Go2 Law Training platform?

Hugh: A big part of my work, even during my time at Allen & Overy, has been training other lawyers. I have always enjoyed the enthusiasm of the people I was training, and I love sharing my knowledge and experience with others. Unfortunately, the COVID-19 pandemic shut down that part of my work, so I just continued to focus on deals.

However, a few months into the lockdown, I was inspired by my wife to consider setting up an online training platform. She had decided to move her own (Pilates) business online and it was going well. She thought I could do the same with my training. I learned a lot from her about how something like this could work really well.

CEELM: Could you tell our readers a bit about the format of the courses?

Hugh: We have six courses at the moment – SPA: Clause by Clause, Drafting Skills, Negotiation Skills (SPA Case Study), Negotiation Skills (Soft Skills), Finance for Lawyers, and Presentation Skills. I will be teaching the first three courses, while the remaining three will be taught by former Deloitte Partner John Nicholson. Depending on the size of the group, John and I can also assist on each other’s Negotiations courses.

I am not a big fan of the webinar format, because it seems a bit restrictive, and (for me) something always comes up just as it gets started. Instead, I opted to record and upload videos on our platform and couple them with live follow-up Q&A sessions. The courses vary in length and include practical exercises for people to do at home. For instance, the SPA: Clause by Clause course has around six and a half hours of content. From my previous experience, the Q&A sessions can last for several hours.

As lawyers are typically very busy, I do not expect them to watch the whole six-and-a-half-hour video in one sitting. That is why, once a participant subscribes to the courses, they will have access to the content for a whole year. The beauty of this is that it enables the viewer to watch whatever content they want, whenever they want. They can pause and come back to it. They can view it several times if they want to understand a particular issue more clearly. The live Q&A session allows participants to clear up any things that they are not sure about. I am also available if anyone has any questions or queries about things that they may not understand fully. Also, the courses are modular, so each of them can be taken on its own, or can be done in a linear way, for example, doing SPA: Clause by Clause, then doing the Drafting course (where you can draft an MOU, for example), and then the Negotiations workshop, where that MOU gets converted into an SPA and teams can learn how to negotiate the SPA with each other.

CEELM: What will John Nicholson’s courses look like?

Hugh: Both his Negotiation and Presentation Skills courses are soft skills oriented, so John prefers to do them in person or live online.

With Negotiation Skills, it is very much addressing the psychology of negotiations and some specific techniques you can recognize and learn to use, whether it is preparation, body language, how to listen, how to ask the right questions, or more to do with tactics and how to influence the other side and get the best out of negotiations. It also addresses the different dynamics of online negotiations as opposed to face-to-face negotiations, where different skills may be used.

With Presentation Skills, it is about maximizing the whole process and experience of giving presentations, in terms of understanding what you are trying to achieve, different types and styles of presentations, and working out what works best for you and for your audience. Also, how to work with the venue, how to connect with your audience and deliver more for them, as well as designing better slides and improving one’s delivery.

The third course John teaches is Finance for Lawyers. There are many financial aspects to a transaction, which some people struggle with. There is sometimes an assumption that we should leave it to the professionals, the accountants and the bankers. Of course, at some level that is true, but as lawyers, we can much better serve our clients if we better understand the commercial imperatives behind the deal, and how the numbers work, and the role of the accounts in valuations and apportioning risk and liability. Our goal is to help people better understand finance, so that they can, in turn, provide a more comprehensive service to their clients.

CEELM: Where do you see your platform in the future?

Hugh: There are six courses at the moment, but we have several others in the pipeline – such as a course on Shareholders’ Agreements, and a course on how a law firm can position itself in the market, win work and price it effectively, as well as techniques for managing budgets on-deal and working with clients to ensure better communication and satisfaction on fees, which can lead to better recovery.

We are also exploring the possibility that the website can actually become a platform through which other people can offer their courses. We have a number of interested parties right now who are keen to offer their courses through the website as well, and we are working with them to get some additional content ready in the future.

Originally, I intended to launch this project earlier, while people were, sadly, still more firmly under lockdown. Naturally, I was focused more on developing the online version of the courses. However, with COVID-19 measures relaxing (on and off) in Europe, I would be happy to continue doing either online courses or face-to-face training. Prior to the pandemic, I had been training lawyers from many regional and international firms. Usually, those firms would fly and drive a select number of their lawyers to, say, Budapest, Belgrade, or Ljubljana, where the training would be held physically. That method implies a smaller number of people being trained and higher costs, in terms of travel and accommodation, but it offers advantages too for the firms, in terms of personal contact, socializing, and cross-marketing internally. The idea is that in the post-COVID-19 era (if/when that comes) we can offer people the choice of video and online training, perhaps reaching a wider audience in a more cost-effective manner, or go back to the traditional model of face-to-face training. I am very happy with either alternative.

Editorial Note: As of September 1, 2021, Hugh Owen joined PwC as Of Counsel, M&A.

This Article was originally published in Issue 8.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Few global industries have been as strongly affected by the COVID-19 pandemic as the hotel industry. All over the world, chains and bespoke hoteliers have had to face the impact of travel restrictions on bookings, in most cases leading to dire falls in occupancy rates and, subsequently, income. Now that the pandemic has been wreaking havoc for over a year, how is the hotel industry in CEE coping, and what options do hoteliers have? We spoke with three CMS Partners – Ana Radnev, Gregor Famira, and Lukas Hejduk – to get their opinions on the current situation and outlook on the future of the sector.

A Rough Year

“In the region’s largest cities, Prague, Warsaw, Budapest, and Bucharest, occupancy sharply declined and revenues plunged”, explained Lukas Hejduk, CMS Partner and Head of Real Estate – CEE. Particularly damaging was the fact that “most properties have incurred expensive stop and start costs,” Ana Radnev, CMS CEE/CIS Finance Partner and a finance restructuring lawyer, noted on the severity of the problems hotel operators face. “Uncertainty is the key problem here: if a hotel operator wants to restart operations in a city or country, it must first ask itself what the future holds. The cost of the restart will be wasted if the pandemic resurges in that territory and the hotel has to shut down again.”

Gregor Famira, CMS Partner and Head of Real Estate for Austria & SEE, highlights an unevenness of support in the region to meet such challenges: “The effects varied depending on how much each government offered. Some countries gave bigger subsidies than others, which led to a lot of frustration. In Austria, hoteliers received huge grants and now, with occupancy rates having crashed, they are more bored than bankrupt.”

Ultimately, Famira makes a clear distinction between locations: “While city hotels rely more on business travelers, and have thus suffered badly, countryside hotels have weathered the storm slightly better. This is because they tend to have local owners and have been able to benefit from native populations vacationing in their own countries. In the cities, the large international chains are now relying on new ‘show-stopper’ hotels to generate publicity and get people looking forward to a return to business travel.” When considering the current options for hotel chains, Radnev echoes Famira’s sentiments: “With uncertainty being the biggest problem, the primary objective is to try and preserve the markets. This has seen hotels reorientate themselves to appeal to a more urban customer base, for example, local populations restricted to ‘staycations’.”

Buyer’s Market?

“Everyone was expecting to see distressed sales and pick up bargains, but that hasn’t transpired to be the case,” comments Hejduk, but that seems inevitable according to the CMS Partners. “Financially, we can say that – unsurprisingly – healthy businesses have suffered while for those that were already saddled with debt, the outlook has worsened,” Radnev explains. “Banks and other debt providers are therefore concentrating on consolidation while also considering more pragmatic solutions such as offloading assets. Perhaps more than most other sectors, the hotel industry is slowly becoming a buyer’s market. Pressure on hotel operators to take mitigating steps is increasing. For investors, if assets are coming to market relatively cheaply, then it makes sense to invest in anticipation of the assets’ values increasing once the pandemic has passed.”

Famira adds: “The issue here is that some costs were not ultimately avoided, but only delayed. Those landlords who were unable or unwilling to reduce rents to almost zero often agreed on shifting rental payments into the future, and the future is… now! This adds financial stress at a time when businesses have barely picked up. As a result, we’d expect that some of the more challenged operators will have to give up, and so there could be quite an interesting playground for new operators on the market. On the property owners’ side, we expect that the difficulties in operations will lead to a gentle decrease in prices, but as there is a lot of money in the market, and some notable ‘investment pressure’, the effect on values will not be that material. We are expecting a boom in transactions in the near future.”

Hejduk also notes the relative attractiveness of the hotel sector to other property sectors. He says: “We see that investor appetite in the hospitality sector – among international and local investors alike – is increasing. A year ago, there was an element of doom surrounding the pandemic, and many were expecting to see distressed sales. Those forecasts have not been fulfilled, and now with high hopes of the pandemic coming under control, investors look at potential investments in the sector recovering. Compared to other real estate sectors like logistics, offices, residential, and health care, hotels will offer better returns. Generally, we expect to see a quick rebound in the sector with travel restrictions easing.”

Reasons for Optimism

According to Radnev, “banks have been supportive and want to continue to be. In many jurisdictions, the government introduced legal moratoria (either automatic or opt-in). These measures had the effect of ‘buying time’ while the pandemic played out. However, it’s now been over a year and despite the available vaccines, improvement in travel in the region – and thus prospects for the hotel industry – is progressing with agonizing slowness.” But, while progress is slow, Hejduk is optimistic: “While we have all adapted to working remotely, people want to be able to meet face to face again, and I expect a positive rebound in the hotel industry later this year. This applies both in business travel to the major CEE cities, and in broadening tourist travel.” Famira agrees, saying: “Although I would expect business travel to return ahead of tourism, in countries like Austria, Slovenia, and Croatia, people are anticipating the return of tourists this summer.”

Ultimately, Hejduk explains that “despite the current slump, it’s important to note that the fundamentals have not changed. What we are dealing with here is a health crisis, not an economic or structural crisis. People still want to travel, they just can’t right now. But the situation is temporary; both business and leisure travel will come back.”

The consensus between the three CMS Partners is that we seem to have turned a corner and the hotel and leisure industry in CEE can tentatively look forward to better days ahead.

This Article was originally published in Issue 8.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On March 5, 2020, CEE Legal Matters reported that Schoenherr had advised Fintur Holdings B.V. on its USD 31.5 million sale of its 100% holding of Moldcell S.A., to CG Cell Technologies DAC. Gladei & Partners advised CG Cell Technologies. We spoke to Vladimir Iurkovski at Schoenherr and Roger Gladei at Gladei & Partners for more information about the deal.

CEELM: Vladimir, let’s start with you. How did you and Schoenherr become involved in this matter?

Vladimir: This was a mandate which has been ongoing for quite some time. As you know, Moldcell was disposed of as part of the Telia Group’s strategy to exit from the Eurasian region (Azerbaijan, Georgia, Kazakhstan, and Moldova). Everything started back in May 2015, when the Telia Group – which included Fintur Holdings – approached us through its English-law counsel (at that time Davis Polk & Wardwell, London) requesting legal assistance under Moldovan law in preparing the seller’s legal due diligence of Moldcell, and consultancy on the Moldovan leg of the possible sales transaction. At that time, Schoenherr already had a serious local portfolio in telecom transactions (including assisting a Swedish investor on the possible purchase of the fourth Moldovan GSM operator, which ultimately went bankrupt resulting in the transaction not taking place, and advising Orange on its purchase of Sun Communications).

Although smaller telecoms transactions have taken place in Moldova over the years, the sale of Moldcell (as one of the biggest GSM operators in the country) was the first of this size to take place here.

Over time this mandate involved numerous steps (including updating the reports, addressing the risks, considerations related to structuring of the transaction, dealing with merger clearance, and transacting with Turkcell for the Telia Group to obtain sole control over Fintur Holdings) which ultimately led to its completion in spring 2020.

CEELM: Roger, how did you and your firm get involved in this matter?

Roger: it started quite ordinarily, back in November 2019, with an RfP, tender, and scrutiny by the potential buyer. Then a pause. Late in December someone pulled the trigger and it went full thrust: the data room opened on January 1st, a record-time due diligence, forget about Old Christmas holidays, get snowed under the work, contemplate the snow only through the office window.   

CEELM: What, exactly, were your mandates at the very beginning when you were first retained for this project?

Vladimir: Initially we were retained to perform a legal due diligence of Moldcell, to be presented on a non-reliance or reliance basis to bidders. The due diligence had to cover all fields of activity of Moldcell, with a focus on title to shares and historical transactions with shares, the regulatory field (including the possibility to prolong the core licenses held by Moldcell), the corporate structure and its compliance with Moldovan legislation, competition law implications, a review of material agreements, an analysis of labor arrangements, and a review of material disputes. Immediately thereafter we were solicited to advise on the possibility of effecting the transfer of shares in Moldcell and post-completion filings. Also, we were requested to provide advice on addressing certain issues addressed in our report and to conduct the legal review of Moldcell’s immovable property (i.e., real estate).

Roger: Target companies’ legal due diligence, including reviewing the vendor LDD Report.

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

Vladimir: I led the Schoenherr team advising Fintur Holdings (Telia Group) on this mandate in relation to the Moldovan law aspects of the transaction. When the transaction with CG Cell Technologies occurred, the seller’s counsel, Sullivan & Cromwell LLP, advised on English law. Throughout the mandate, I was supported by my Senior Associate Andrian Guzun and my Associate Denis Lefter (both from our Moldovan office). While I was in charge of direct contact with the client and the English-law counsel, and of negotiating with the other party, Andrian and Denis (and other colleagues from the office) supported me with all aspects of the transaction including the seller’s due diligence, drafting required transaction documents, merger clearance for the prior transaction with Turkcell, completion steps, and so on.

Roger: Dan Nicoara was the project leader, coordinating the due diligence and contract matters. Most of our associates were involved in the LDD exercise, with Irina Sugoneaco coordinating the financing transactions side.

CEELM: Please describe the deal in as much detail as possible, including your (and your firms’) roles in making it happen.

Roger: It was an extraordinary transaction from day one. Not only cross-border, but a truly multicultural deal, with Turkish leasing counsel and an Indian project manager, with Nepalese background experience. That’s on our side. There were strict and sober Swedish gentlemen and two international law firms on the other side. There were rounds and rounds of phone conversations, burning the midnight oil in reviewing and revising contractual documentation, and legal arm-wrestling on the key issues – we felt like we were playing in the Super League, but an infinite game.

It was our first deal with this client, so there was no previous chemistry, as we had never seen their faces before. But we spoke the same language: the language of dedication to make it through. The client was determined and contaminated our team with that. We repaid them by deploying all our resources and expertise, and my younger fellows demonstrated a terrific resilience and desire to see it done.

You see, there are not so many large-scale M&A transactions in Moldova. Quite often the foreign clients drop the deal because of internal or, more often, external constraints. Moldova is still perceived as a country with an unstable economy and unpredictable laws, and reputable investors are yet to put it on their maps.

This deal was different from this perspective too: a Nepalese businessman cannot become afraid of Moldovan uncertainty. Before pitching, I googled Chaudhary family and got really impressed: Binod Chaudhary is a self-made man, coming from a simple family and becoming the best-known and most acclaimed Nepalese investor in the whole world. CG Corp Global has over a hundred companies under its umbrella and an investment outlay of over USD 1 billion. You can imagine my emotions when back in March 2020, when the project manager texted me: Mr. Chaudhary will visit Chisinau and wants to see you.

He turned to be a very nice person: tough and agile in negotiations, while gentle and kind in personal conversations. Once talks in our office were completed, and points made, Mr. Chaudhary turning his eyes over the books on my shelf: “I know this guy, we had tea together.” Gosh, “this guy” is Sri Swami Rama, his book Living with Himalayan Masters had just landed on my shelf from Amazon. It turned out that Mr. Chaudhary and me share many passions.

After the deal was signed, Mr. Chaudhary took me to his company, for the first meeting with the people. You need to see how he knew to ignite people’s optimism and desire to succeed. And not because it was Valentine’s Day or the eve of my birthday.   

Vladimir: The mandate commenced back in spring 2015 with the preparation of the seller’s due diligence (which was updated at least four times until 2020), as well as other legal preparatory steps. This was followed by a lengthy process of identification of the purchaser, discussions, and meetings with and explanations to bidders. Before the transaction with CG Cell Technologies, in the beginning of 2019 the Telia Group obtained sole control over Fintur Holdings following a transaction with Turkcell. This part included obtaining merger clearance from the Moldovan Competition Council within a relatively short period of time. Negotiations with CG Cell Technologies commenced in the second half of 2019, including various topics, including findings from the due diligence, the necessity for merger clearance in Moldova, negotiations of the framework agreement, mechanics of the local transfer of shares, completion, and post-completion steps. The framework agreement was signed on February 14, 2020, while the completion happening shortly thereafter.

CEELM: What’s is the current status of the deal?

Roger: It closed in March 2020.

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

Roger: Definitely, the post-signing part. Early in March 2020, the Covid pandemic had reached Moldova and the authorities decreed a state of emergency, with an immediate shut-down of most public offices and insistent recommendations to stay home. We closed the deal with masks on the faces, literally. I clearly recall the closing day of March 24, as guerrilla partisans – the seller’s counsels and us – divided into two groups, with one driving to the notary and the other to the share registrar’s office. The deal was complex, and the different structures of Moldovan targets required different completion steps, but we managed it as a legal blitzkrieg. One after another, all the bureaucratic redoubts fell and we passed through with flying colors.        

Vladimir: There were two challenging situations during this transaction. The first was when the Moldovan authorities unexpectedly wanted to scrutinize the transaction in more detail, as the parties to the transaction were preparing to complete it. This was indeed challenging and unexpected. In my opinion this happened due to the size of the transaction and the importance of Moldcell to the Moldovan economy. In the end, all went well, and the parties continued with the transaction.

The second was that we had to conclude the transaction (including preparing the pre-completion steps, etc.) during the state of emergency that was declared in Moldova due to the COVID-19 pandemic. Until the last moment, it was unclear whether the register authorities and other entities (such as the notary, for instance) would be legally allowed to fulfil their duties and allow the transaction to be completed. The parties had to provide corresponding reasoning and succeeded in accomplishing the goal.

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

Roger: That was not the case. In fact, we managed to close in the last minute, and even one or two days of delay would have thrown the completion out to the unknown future, as the pandemic was on the rise.

Vladimir: In my opinion, the completion date. On the agreed-upon time and date, and in different locations, involving different registrars, and representatives from each side, it all went incredibly smoothly. On the same date, we managed to conclude the local transfer instruments, obtain the notary formalities, and pass the target shares to CG Cell Technologies.

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

Vladimir: Yes, it changed over time, since the sale of Moldcell was protracted, involving numerous negotiations with different parties, adjustments to the initial plan, preparatory steps (such as the acquisition by the Telia Group of sole controls over Fintur Holdings from Turkcell), and involved lengthy negotiations with CG Cell Technologies.

Roger: The mandate remained the same, and we fully completed it. After closing though, the company has retained us for various legal – including post-completion – matters. The chemistry has emerged.    

CEELM: Vladimir, what specific individuals at Fintur Holdings instructed you, and how did you interact with them?

Vladimir: Since the transaction was subject to English law, we received instructions from Telia’s M&A Division and from colleagues from Sullivan & Cromwell, the English-law counsel to the Telia Group. Colleagues from Sullivan & Cromwell were involved in the negotiations throughout the transaction.

CEELM: And Roger, what specific individuals at CG Cell Technologies instructed you, and how did you interact with them?

Roger: Amit Jhunjhunwala – a dedicated and sharp-minded professional, who was very pleasant and positive in communications. It was my first experience doing business with Indian people after my return from a Himalayan retreat. I saw many Indians there, but now had the chance to do business with them. Later on, I had the chance to interact with Nirvana Chaudhary – a respectable while humble person, loving his family and his job.   

CEELM: How would you describe the working relationship with Gladei & Partners on the deal, Vladimir?

Vladimir: I would call the working relationship and environment during the transaction as professional. Working with Gladei & Partners was occasionally difficult, but overall everything went well and resulted in a beautiful transaction. Most of the work was done via phone conferencing and e-mail. The parties signed the transaction agreement at our office in Chisinau in February 2020, and the completion took place in Chisinau too, with the parties being represented by the lawyers from Schoenherr (on the seller’s side) and Gladei & Partners (on purchaser’s side). Indeed, the final phase of the transaction was carried out during the pandemic, which inevitably brought a certain degree of uncertainty, but in the end the expectations of both parties were met.

CEELM: And Roger, how would you describe the working relationship with Schoenherr?

Roger: They had a strong team. Being on the different sides of the barricade, we each bent over backwards to defend our client’s interests. Always constructive and solution-driven though, and standing shoulder to shoulder when talking to the third parties, e.g., when visiting the capital market regulator to clear up uncertainties. There was one irreconcilable thing though: Vlad from Schoenherr was wearing black medical gloves upon executing the closing documents in the registrar’s office, while I was wearing white ones.      

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

Vladimir: The Moldovan economy is relatively small compared to neighboring countries, and the frequency of bigger transactions is lower. This deal is significant, as it is the first transaction in the history of the country in which full control over one of the biggest GSM operators of the country was passed on to the purchaser. It is to be noted that the transaction was carried out from a foreign shareholder to a [new] foreign shareholder.

For lawyers, this is a unique opportunity to prove their knowledge in a sector, show their skill in M&A transactions and the ability to properly approach everything from the perspective of Moldovan law. After all, a happy client makes its lawyer happy, too.

I look forward to more transactions of this kind in the country.

Roger: It was most significant for the people in Moldcell, probably. A bit tired from several years of shareholder uncertainty, when all they worked at extra speed to keep it up, the people inside have received a burst of energy. “The lazy competition on the telecom market is over,” as an industry public official put it upon completion. And our later interactions with the company have proved this – Moldcell’s business has gained momentum.

This Article was originally published in Issue 8.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On November 20, 2020, CEE Legal Matters reported that BDK Advokati, working alongside Sweden’s Gernandt & Danielsson Advokatbyra, had advised Embracer Group AB on its acquisition of all issued shares of Mad Head Games d.o.o., a game development studio from Novi Sad, Serbia. SunjkaLaw advised Mad Head Games shareholders Nenad Tomic, Uros Banjesevic, and Aleksa Todorovic on the deal.

The Players:

Counsel for Embracer Group AB: Vladimir Dasic, Senior Partner, BDK Advokati

Counsel for Mad Head Games: Tomislav Sunjka, Founder and Principal, SunjkaLaw

CEELM: Libor, Vladimir, how did you and BDK become involved in this matter? Why and when were you selected by the Embracer Group as external counsel initially?

Vladimir: As in most of international transactions, the clients leave the choice of the local law firms to their legal counsels. In this deal, Embracer Group worked along with Swedish law firm Gernandt & Danielsson Advokatbyra and this is where the instruction came, as G&D used to work on IP matters with our SEE Legal colleagues from Slovenia (Selih & Partners) and they rightfully trusted that we would be equally good. 

CEELM: What about you, Tomislav? How did you and SunjkaLaw become involved in this matter?

Tomislav: SunjkaLaw is a law office well known in Serbia and Novi Sad, as we are a specialized and focused law firm, and have been such for 21 years. The scope of our work, among other things, includes consulting and representing clients in the IT industry. This comes from our expertise in all matters connected with business, and from the fact that Novi Sad is considered the IT capital of Serbia. In light of our reputation for handling complex legal matters, and the brand we have built when counselling and representing clients in the IT industry, Mad Head Games chose us as their legal counsel for each stage of the representation in this project.

Vladimir: What, exactly, was the initial mandate when you were each retained for this project, at the very beginning?

Vladimir:  The initial request was to confirm that the deal could be closed within two weeks, since Embracer Group – in parallel with this deal – was negotiating 11 other game studios acquisitions and all of them were supposed to be executed and announced on Nasdaq Stockholm on November 17. Hence, we had to thoroughly discuss the process with the sellers and their lawyers and fix the timeline and step plan that would take us to the agreed signing date, as otherwise there would be no deal.   

Tomislav: We were hired to advise and represent the shareholders from day one until the fulfilment of all the obligations set out in the Sale Purchase Agreement – six years in all.

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

Vladimir: On the Corporate/Tax side our Counsel Tomislav Popovic had a lead role along with Associate Sanja Dedovic. Our IP Partner Bogdan Ivanisevic and his team were responsible for IP and Data Protection issues as this is most sensitive segment in the game studios business – along with HR issues, which were covered by Associate Marija Gligorevic. My main responsibility was to manage the overall process, assist in relation to local law inputs and due diligence findings in the SPA, and assist in the deal structuring, which was very complex, due to time constrains and various issues we had to resolve along the way. 

Tomislav: The members of the team on this project were Velibor Repaja, who was responsible for Corporate matters, Jelena Bajin, who was responsible for Corporate and IT, IP, and Data Protection matters, Ivan Strbac for Employment issues, Junior Associate Andrea Fluture, for technical execution support, and me, Tomislav Sunjka, the Principal of SunjkaLaw, as a case manager for the transaction and negotiator.

CEELM: Please describe the deal in as much detail as possible, including your (and your firms’) roles in helping make it happen.

Vladimir: The goal of our client was to acquire 100% of the equity in MHG and at the end this was agreed with the sellers. As G&D had a lead role on the SPA, one of our prime responsibilities was the due diligence of MHG, especially agreements with their main customers, games distributors, and suppliers, as well as the online platforms where their games can be downloaded. Game studios are very specific kinds of companies and the business environment they operate in is different from standard sectors we are seeing on other deals, and this was the biggest challenge for us: to understand their business and the commercial arrangements they have, and to spot any risks in those agreements. 

Tomislav: First, the project included the initial negotiation of the ground principles of the project and commercial issues. After these were determined and negotiated, the analyses and mark-ups of the Sale Purchase Agreement were fairly normal, and there were only a lot of mostly-technical issues to deal with – the transfer of shares, intellectual property issues, earn-out issues, manner of payments, and so on. The project also included the Sale Purchase Agreement itself. Everything was done successfully and smoothly, through the cooperation of each party and the cooperation of the advisors.  The difficulty was structuring the sale purchase price, followed by setting the time frame for fulfilling the obligations of the Sale Purchase Agreement, as well as the demand of the purchaser that the deal closing should be done at an exact moment.

CEELM: What is the current status of the deal?

Vladimir: The deal has successfully closed and MHG is now integrating successfully within Embracer Group.

Tomislav: The entire project successfully closed in December 2020 but parts of the mutual obligations set out in the Sale Purchase Agreement will need to be fulfilled over the next six years, and we will monitor and work on that.

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

Vladimir: The biggest challenge was the deadline of November 17, and being aware that you have a limited amount of time to complete a process that usually lasts at least three times longer. Luckily, we had closed another deal, at the beginning of 2020, in which our client, Logo, sold 60% of its shares to GetSwift, where we had one week from the day when we were instructed and when the term sheet was signed until the closing, so we knew it was doable, with the right team and a lot of strong coffee.     

Tomislav: I would not say there were any parts that were frustrating, since everything that the project included was part of my regular day-to-day work, which I still enjoy, and it is something that I have been doing successfully for over 20 years. It was somewhat challenging to define the “ground rules,” in the sense of negotiating the basic principles of the transaction each side would not back out from, but even that was done with good communication and with understanding by the other side, without much drama. It was very time-focused, including overnights and working over the weekend, but nothing unusual.

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

Vladimir: The cooperation with Gernandt & Danielsson Advokatbyra was very easy and enjoyable. Also, the main deal team at the Embracer Group was very direct, to the point, and ready to come up with pragmatic solutions. 

Tomislav: I can say that most of the project went fairly smoothly, from the negotiating part to the execution part. All the advisors who participated were highly professional and we understood each other very quickly.

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

Vladimir: Yes, it did.

Tomislav: Yes, as I mentioned above, the initial mandate never changed. There were some changes in the legal actions that were taken during the transaction, but the goal remained the same the entire time.

CEELM: Vladimir, what specific individuals at Embracer instructed you, and how did you interact with them?

Vladimir: Andrey Iones, the COO, headed the negotiations for Embracer. He is a great negotiator with a pragmatic deal approach and a focus on relevant aspects of the transaction. When Nasdaq Stockholm announced this deal and when we realised that, in addition to MHG, Embracer had also negotiated and agreed on 11 other acquisitions, I was stunned to find out that in addition to our long and complex discussions and the enthusiasm he had in getting this deal done, he was going through the same process on 11 other deals. Don’t tell me that AI will replace humans in M&A.        

CEELM: Tomislav, what about you? What specific individuals at Mad Head Games instructed you, and how did you interact with them?

Tomislav: There were four shareholders – Aleksa Todorovic, Uros Banjesevic, Ivan Zorkic, and Nenad Tomic – and we communicated with all of them regularly. Day-to-day communications mostly went through Nenad Tomic, as he was the CEO of the company.

CEELM: How would you describe the working relationship with each other on the deal?

Vladimir: The cooperation with the seller’s lawyer, Mr. Sunjka, was very smooth. We have known each other for several years but have never worked together. He was very cooperative, and although at the beginning we had quite opposite positions in reaching the deal closing, we managed to agree on a structure that was accepted and implemented successfully by our clients.

Although Novi Sad, where Mad Head Games is based, is just 40 minutes away from Belgrade, we had to have all meetings via Teams and Zoom due to the pandemic.

Tomislav: Working with BDK Advokati was, as it always is, a pleasure, since their level of professionalism is very high, and that is something that I personally take as a must in all legal communications, including this one. Also, we had great communication and dealt with all the issues that arose with understanding and efficiency. In light of the project’s time limits, the negotiations were effective and straight-forward, and the entire deal, including the procedures before the relevant authorities, did not last more than a month, in total. We usually communicated by phone, teams, zoom, or email, since at this time the COVID-19 pandemic was in full swing, and we all felt that we should be responsible and have meetings in person only when absolutely necessary.

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

Vladimir: For BDK Advokati the significance of this deal was in building our experience in games studios transactions, as there will be many more deals of this (and even greater) size. The business of games studios and development of new games is linked with the latest IT technologies and the growth of social networks and apps, and only when you have the opportunity to be involved in a deal like this can you understand the legal challenges and issues in the gaming industry and how to recognize the risks they might create for the transaction. Deals like this also give you a huge advantage in approaching other games studios and helping them build not only corporate and commercial departments, but also a compliance structures, as this is one of the biggest challenges in this industry, especially when you have reputable investors from US and EU.

Tomislav: The deal is significant as it is, to my knowledge, the first investment of the Embracer Group in this part of the world. It shows that a company from Novi Sad, Serbia – if it has talented and hard-working people – can achieve great things in the IT sector. It also shows the strength of the IT sector in Serbia – the fastest developing sector, full of highly educated and motivated young people, who, with a little support, can amount to world class IT companies.

This Article was originally published in Issue 8.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On September 22, 2020, CEE Legal Matters reported that Kinstellar’s Bratislava office had advised E.ON on its acquisition of a 49% stake in electric utility Vychodoslovenska Energetika Holding from the German electric utilities provider RWE. We reached out to Kinstellar Partner Viliam Mysicka for more information about the deal.

CEELM: Viliam, how did you and Kinstellar become involved in this matter? Why and when (and by whom) were you selected by E.On as external counsel initially?

Viliam: Kinstellar was retained by E.ON based on its work in a long-term cooperation project. We were mandated by Mr Sebastian Heidtkamp, Head of Legal M&A at E.ON, and were appointed alongside Linklaters, who advised on the German and international aspects of the deal (as the deal was part of a larger asset swap between E.ON and RWE).

CEELM: What, exactly, was the initial mandate when you were retained for this project, at the very beginning?

Viliam: The initial steps included deal structuring questions and analysis of applicable agreements (such as the shareholder agreement with the Slovak state).

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

Viliam: I and Adam Hodon, my Bratislava-based Partner, were the main contacts. We led all communication, as the transaction was complex and important for client. The team was further supported, on a case-by-case basis, by several specialists.

CEELM: Please describe the deal in as much detail as possible, including your (and Kinstellar’s) role in helping make it happen.

Viliam: The deal consisted of the purchase by E.ON of 49 percent of shares with managerial control in VSEH from RWE. Our role was complex, as we supported the client during the negotiation of terms with the seller – RWE – as well as the second shareholder, the Slovak State.

CEELM: What’s is the current status of the deal?

Viliam: It closed in summer 2020.

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

Viliam: The whole context of the deal was challenging, as it took place during the pandemic, which limited opportunities for people to meet for negotiations, etc. Also, a new government was introduced in Slovakia in March 2020, and their priority was to fight Covid rather than to deal with the economic situation, which resulted in a long period of deal-related discussions. 

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

Viliam: No, there was no substantial change.

CEELM: What specific individuals at E.On instructed you, and how did you interact with them?

Viliam: In addition to Mr Heidtkamp, also Mr Torsten

Decker. 

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

Viliam: We believe that the discussions with Freshfields were constructive. Given the Covid element, all discussions and negotiations took place over the phone. Negotiations were often challenging given the complexity of the deal and very sophisticated parties on both sides of the table.

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

Viliam: Apart from this deal being perhaps the largest on the Slovak market in 2020 by size and value, it is no less important from other angles as well. It re-confirmed confidence in deal making in these challenging Covid times. It also confirmed that Slovakia remains on the radar screen of major west European investors. Finally, it is a great value for the Slovak state to have a new partner in a strategic energy company in Slovakia.

This Article was originally published in Issue 8.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

As last year’s upheavals continue to influence finance markets in 2021, Erika Papp, CMS’s Head of Finance CEE/CIS, and CMS’s Regional Finance Partners Paul Stallebrass in Prague, Ana Radnev in Bucharest, and Elitsa Ivanova in Sofia offer their perspectives on what this year might hold for financing in CEE.

As last year’s upheavals continue to influence finance markets in 2021, Erika Papp, CMS’s Head of Finance CEE/CIS, and CMS’s Regional Finance Partners Paul Stallebrass in Prague, Ana Radnev in Bucharest, and Elitsa Ivanova in Sofia offer their perspectives on what this year might hold for financing in CEE.

CEELM: Last year was extraordinary in many ways. How has the pandemic shaped financial markets in Central and Eastern Europe so far – and what do you expect from 2021?

Erika: It’s been a remarkable story. At the start we were concerned there would be no new transactions. But all CEE countries enacted moratoria on loans and pumped cash into banks. Thus, the anticipated wave of bankruptcies did not materialize. Today we are much better placed to see how the CEE economies are coping. Poland, for instance, has weathered the storm better than most, while Hungary, by contrast, didn’t see as many new investments in 2020 as it had in previous years. Although much has depended on each country’s specific response to the pandemic, the CEE region as a whole has coped much better than we might have expected last spring.

This year promises many new deals in real estate and project financing, and the trends remain strong. Markets are busy in non-performing loans and banking M&A.

Paul: The most obvious impact of the pandemic was on the keenness to do transactions, especially in private equity, which suffered from the uncertainty. Some sectors did show resilience – for example e-retailers, who benefitted from the lockdowns, as well as the tech sector and pharma.

By the second quarter of this year, I expect the situation will be clearer and markets will pick up as a result of valuations stabilizing. It’s important to realize that right now people may be less inclined to sell due to poor numbers following a tough year.

CEELM: How are the current transactional trends in the region affecting acquisition finance and corporate lending in CEE?

Paul: There is plenty of liquidity in the market and substantial funds are available. On local markets, I expect a change in underwriting, with a shift away from syndication and more deals being done on a club basis, as they were after 2008. There is also potential for growth in IPOs instead of sales to PE or private buyers, and we have seen some successful examples of IPOs already over the last six months.”

CEELM: Has Brexit had any substantial impact on CEE finance transactions?

Paul: Brexit has not caused any significant problems among banks providing finance and has only had a minimal impact on the general financing market. The one consistent issue we’re seeing in CEE is questions regarding whether documentation should still be governed by English law. However, it’s misleading to think that Brexit is of any relevance here. English laws are arguably the best because of their flexibility and lack of statutory interference in commercial transactions – although that does not necessarily mean English courts are also best – and English remains the lingua franca of business in CEE. English law was used before CEE countries joined the EU and English laws govern contracts involving entities in jurisdictions outside the EU, like Singapore. In addition, English and EU courts will continue to recognize English law as the governing law of contracts, exactly as they did before Brexit.

Erika: As Paul notes, we’re getting a lot of inquiries about English law governing contracts in CEE. We still strongly recommend the use of English law. In addition, Brexit may cause a need for minor redrafting of specific clauses in certain deals, and of course there are alternative solutions if clients feel strongly about the governing-law issue. For example, parties completing a deal who are exclusively from one CEE country could agree to have that country’s laws govern. I do, however, always recommend that our clients keep using English law. For CEE, Brexit is no drama and actually offers new opportunities.

CEELM: Given the current climate, how do you think restructurings and NPLs will evolve in CEE this year?

Ana: Last year, governments helped businesses a great deal. Although each country took a different view, to a certain extent companies were able to postpone and defer payments. But that could not go on indefinitely, and today the plans that businesses have made are becoming more important. I expect we’ll see fewer restructurings this year. Things will be clearer by the second or third quarter of the year, after which I anticipate more disposals. However, I think these will be more medium-to-large, single-asset disposals.

Erika: One exciting development is the new EU Preventative Restructuring Directive, which is an entirely new way for struggling enterprises to stave off bankruptcy. This framework directive gives member states a great deal of latitude in implementing it and determining for themselves how their internal bodies will oversee restructurings. In addition, the framework offers vast flexibility, including allowing for the sale of the enterprise, and the swiftness it offers should really help troubled businesses.

CEELM: In your view, is CEE still an attractive destination for structured commodity and trade finance deals?

Elitsa: Yes certainly, and this will continue to be the case in 2021 as structured trade and commodity finance offers increasing opportunities. Ukraine is probably the most active market in CEE regarding structured commodity finance, especially for “soft” commodities: food and agriculture. There, we see investor confidence restored over recent years with tenors no longer restricted to one year or shorter, and some DCM activity particularly for large, vertically integrated argi-businesses. As Ukraine remains the grain house of Europe, the country offers a range of excellent opportunities. In the rest of CEE, companies are becoming more sophisticated, and while most of their financing is still based on straightforward bilateral revolving credit lines, we are starting to see larger and more complex structures as well, such as the occasional prepayment or borrowing base facility, as well as club and syndicated deals. The reason I do not mention Russia and CIS here is simply because I consider them in a category of their own, and not part of CEE; otherwise, there are also many opportunities there in terms of commodity finance work.

Risks in these types of investment do exist, of course. The pandemic caused a period of uncertainty and lessened demand from China for a period in 2020, especially in the metals and mining sectors. However, commodities resisted the pressure well, and the outlook for 2021 is positive.

CEELM: Are foreign banks particularly active in finance transactions in CEE?

Erika: Yes, foreign banks – especially Austrian and German banks – have traditionally been active in financing projects and transactions in our markets. Interestingly, we’re seeing more Asian banks arriving. To a degree this is a natural coda to the volume of investments coming from that part of the world. Chinese companies that enter CEE markets want to benefit from having their banks here to offer financing.

More importantly, we’re seeing new PE sponsors in the region. China’s GDP has enjoyed strong growth and PE investors are coming to this region to identify and partner with dynamic businesses.

CEELM: And what role do development banks in particular play in finance transactions in these markets?

Elitsa: International development banks have played an important role in providing resilience-based financing to businesses in CEE, supporting them through the pandemic. We saw a lot of that happening across a big part of our region and it was certainly encouraging to witness such a level of support across sectors.

Ana: Interestingly, the current situation itself is not stopping transactions from taking place – quite the opposite. Multi-lateral financing institutions such as EBRD are very active in the region. EBRD has already rolled out investments and disbursements to its clients and countries in CEE. It also acts as an anchor by encouraging others to get involved. Most importantly, the post-coronavirus recovery will be a sustainable recovery.

CEELM: Which areas or sectors do you see being on the rise with increasing opportunities, despite the pandemic?

Elitsa: Renewables are certainly on the rise across the region, including in terms of M&A activity and refinancing for existing projects. Regulation in that area is more stable as well, and as technology is much cheaper, projects can be financed from the market without the need for feed-in tariffs. Greenfield developments will almost certainly keep increasing because new capacities are required for governments to meet their green energy targets.

CEELM: On the subject of sustainable recovery and green energy targets, to what extent do sustainable investments resonate in CEE today?

Ana: It’s growing in importance all the time. We can see how investors insist on sustainability in investments. Typically, investors will include reporting obligations proving that green or other sustainability objectives are met by certain points in the lifetime of the investment. Large investors have their own in-house, specialized teams to ensure investments meet their sustainability targets. These targets can specify items in a broad range of issues, from environmental, social, governance responsibilities, to diversity in the workplace (such as promoting women).

Indeed, ESG issues have come under a new EU regulation called the Sustainable Finance Disclosure Regulation, which introduces several new concepts that businesses will need to understand when disclosing their ESG approach. At a high level, these include financial market participants, financial advisers, and financial products.

Each relevant entity needs to ask how it integrates sustainability risks into the investment decision-making process, how it takes into account the principal adverse impact of investment decisions on sustainability factors (on a comply or explain basis), and how its remuneration policies are consistent with the integration of sustainability risks.

It’s also important to remember that all products are captured – not only those related to ESG. All products will need to disclose the likely impact of sustainability risks on the returns of the product (or explain why such risks are not considered relevant). Product-level obligations for all financial products include the integration of sustainability risks, any principal adverse impacts, and marketing communications.

Finally, ESG-focused products that promote environmental or social factors, or which have a sustainability objective, are required to make additional disclosures, following the detailed frameworks set out in the Sustainable Finance Disclosure Regulation.

CEELM: Banks have been at the forefront of digitalization. What key developments and topics are keeping the financial markets busy in this space?

Erika: The digital transformation of the global economy is well underway, and the pandemic has only accelerated these changes. In a recent survey CMS conducted, 58% of businesses with CEE operations were already using AI solutions, while a significant majority – 83% – were planning AI-related investments. The banking sector is at the forefront of these developments, both globally and across CEE.

Digitalization is no longer the future but already the present, and several banks based in or present in CEE have been investing heavily in their digitalization projects for several years now. Digitalization brings a new way for banks established in CEE to regain market share and customers from fintech companies, which are now operating in more challenging market conditions. There are more than 600 fintech companies in the region, which presents an opportunity for banks to regain customers that had moved towards more digital-friendly alternatives.

A few examples include OTP Bank and its fintech company OTP Mobile; UniCredit, which recently completed significant digital projects; and Erste with its new digital platform. The future is promising for the banking sector in CEE.

CEELM: And finally, how much consolidation are you seeing on the banking market today?

Paul: Banking M&A is still moving forward despite the pandemic. For example, last year we saw some transactions in the Balkans. We are also likely to see an increase in transactions in the fintech sector and less-traditional banks, where CEE countries have tended to be quite successful. Of course, the coronavirus has caused some disruption, but the banking sector in CEE had enjoyed a fairly long period of stability before 2020. If the pandemic causes issues in their home countries for some of the international banks that are present to a limited extent in the region, they may seek to divest themselves of parts of their business that they view as non-core, which would in turn lead to an increase in banking M&A.

This Article was originally published in Issue 8.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

JPM Jankovic Popovic Mitic was launched in Belgrade 30 years ago, in 1991. CEE Legal Matters used the anniversary as an excuse to reach out to Senior Partners Nikola Jankovic, Nenad Popovic, Milos Mitic, and Jelena Gazivoda for a walk down memory lane.

CEELM: Congratulations on the anniversary! How are you planning to celebrate it?

Nenad: Thanks a lot. Yes, 30 years is something of an achievement, especially in Serbia. JPM is now the oldest commercial law firm in Serbia.

Our annual parties and especially anniversary parties are quite famous in Belgrade for their atmosphere, lots of people having fun, good music, and excellent food.

For this anniversary, we wanted to bring this to a completely new level, and we started planning before we were rudely interrupted by Covid in 2020. Depending on the situation we will decide how to proceed. Even the Olympic games got postponed for a year, so we can do that as well, if we have to.

CEELM: How did the firm first come to be? Who were the initial founders and how large was the team, at the beginning?

Nikola: Nenad, Milos, and I were young lawyers determined to start practicing law together. We knew each other personally and we considered ourselves a good match since we were about the same age, had similar interests, and shared the same ideas on the legal profession.

From today’s perspective, it is hard to tell if we were brave or just foolish to start on our own in 1991 when it was obvious that Yugoslavia was falling apart.

However, we started small – just the three of us, a secretary, and one young trainee (who now has had his own private practice for some 25 years –  in a small office in the center of Belgrade. But we had a lot of trust in ourselves and we managed, despite the circumstances.

CEELM: What do you recall from year one? What were the highlights that stuck with you over the years?

Milos: Usually, just fragments of some major things stick in memory, like moving into our first office, getting our first international clients, making the first additions to our legal team with younger colleagues, learning by doing, and being able to observe our overall progress in every aspect of our life and work.

CEELM: Looking back at your 30 years of operations, what would you identify as the three most important transactions for the firm?

Nenad: In the course of those 30 years, we participated in many landmark transactions. But the sale of Oil Industry of Serbia to Gazpromnjeft, and the sale of Maxi to Delhaize (still considered the largest private transaction in Serbia ever) would be my top choices.

Jelena: Our engagement in the South Stream gas pipeline and its now active sibling – the Balkan Stream – is one of the biggest deals ever performed in the region in terms of the sheer value and overall legal involvement.

CEELM: Similarly, what are the three deals you are most proud of having worked on?

Nenad: They say that the first cut is the deepest, so the Messer acquisition of Tehnogas in 1995 is something that comes first to my mind. Also, the acquisition of Knjaz Milos, the largest Serbian producer of mineral water and soft drinks – the first and so-far only hostile takeover in Serbia – is also a deal we are very proud of.

Milos: From my side, participating in the establishment of Raiffeisen and Unicredit in Serbia (Bank Austria Credit Anstalt at the time) – the first two foreign-owned banks in Serbia since 1939 – is something we are still proud of.  We took part in something entirely new and exciting from a legal standpoint. In a way, we were creating history.

CEELM: The firm never planted a flag outside of Serbia. Was that something you ever considered?

Nikola: That is not entirely true. In fact, we were the first firm to establish our presence outside of Serbia. In cooperation with our Austrian partners at that time, we established JPM in Sarajevo. It was at the beginning of 2002, if I remember correctly. It was really a big step for us, and the business was progressing well. Most of the initial major transactions in Bosnia were done by our office.

However, we always considered ourselves lawyers, not businessmen, and working in two jurisdictions proved to be little too much. We had problems with dividing our work/life between Belgrade and Sarajevo, as Serbia’s market was booming at that time and, frankly, we had too much on our plate. So, unfortunately, we decided to pull out in 2005.

We are quite satisfied with providing legal services in the jurisdictions of the former Yugoslavia via TLA, an association of top-tier law firms operating in the region, which we co-founded in 2014.

CEELM: What about the team? How has it evolved over the years, and how do you imagine it will continue to do so?

Jelena: Our team has at all times been our core asset, contributing to our growth both as professionals and as individuals. Each year brings new projects and new team members. We are now a strong and compound team of around 40 lawyers of different expertise, different approaches, and different energy, but a true team that shares the same values, same vision, and same attitude towards our clients and business. We believe the years to come will add new professional and personal gems to the JPM story and we trust in the power of the new generation’s synergy, ambition, inspiration, and motivation, as well as the accumulation of experience, knowledge, and new attitude reflected by the young members of our team.

CEELM: What is it about the past 30 years that you look back at with the most fondness?

Milos: After all these years, we remain true to our initial partners’ agreement, for better or for worse. We never really considered changing anything. Even more, we stayed friends and colleagues. With Jelena’s addition, we gained fresh blood, additional expertise, and some new and better perspectives. What’s more, all our major decisions proved to be right, both from a business and human/personal perspective.

CEELM: On the flip side, what is one thing you regret not yet having a chance to do?

Nenad: It is hard to tell. “What if” is not something that we usually do. Probably we missed some chances on occasion but that doesn’t mean that we were necessarily wrong in the long run. In hindsight, we probably needed to be more market aggressive at times and/or go regional before, but all in all, we are quite content with what we have achieved so far.

CEELM: Where do you imagine the firm 30 years from now?

Nikola: That would make us around 90 [laughs]. I believe that 30 years from now JPM will continue to be a prominent name in the Serbian legal market.

We are confident that our successors will remain true to JPM’s original ideas and spirit.

This Article was originally published in Issue 8.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

According to its website, “Amberlo takes care of your busy-day so you can focus on what matters most,” and the company is “on a mission to help law firms transform into high-performance digital organizations.” CEE Legal Matters spoke with Amberlo Co-Founder and CEO Aidas Kavaliauskas to learn more about how the company’s cloud-based case management software built for legal professionals does just that.

CEELM: Tell us a bit about Amberlo, its mission, and its products.

Aidas: Amberlo is an all-in-one cloud-based law practice management platform that automates business processes at law firms, from client acquisition to payment management. It was born with the mission to transform law firms into high-performance digital organizations. During the past few years, we have accomplished the transformation for hundreds of law firms.

CEELM: When was the company founded, who were its founders, and what was the source of inspiration in setting up the company?

Aidas: The Amberlo idea was born in 2015 between me and a few friends. We were involved with some legal projects and did not like the way they were organized. We thought that lawyers and their clients deserved better tools than Outlook and Excel. We checked the market and saw a gap. There was a lack of user-friendly and affordable law practice management software in the EU. The US had Clio, but it was not localized and did not support local billing and reporting requirements. Most European software providers either focused on top law firms or had quite basic products for small and medium-sized law firms. Cloud solutions were only starting to gain momentum, and we saw an opportunity. We used our 15+ years of experience in developing cloud solutions for top enterprises in Europe to create the legal software. Amberlo was launched in 2017.

CEELM: What did you find were the main reasons firms turned to Amberlo?

Aidas: At the very beginning, law firms were not rushing to use Amberlo. We had a dozen law firms who were participating in the pilot project. Then we started adding more law firms. During the pilot phase, which lasted another two years, we polished the product. We used all the feedback from our pilot customers and looked into the best of breed products from other business areas to create a seamless experience for lawyers. Law firms started using our solution at a certain point because it worked for them, not the other way around. Also, they saw other law firms using our software. And all of them stayed with us because, besides being easy to use, Amberlo created enormous value. Our clients were reporting a 20-30% increase in productivity after starting to use Amberlo.

CEELM: What were some of the main concerns from early adopters and how did you address them?

Aidas: Security, the business continuity of the company, value, and price were among top concerns from early adopters. Law firms were not sure if they could trust us, and if we could protect their data. Another concern was a value perception problem: lawyers were unsure if they needed Amberlo, if they could use it effectively, if their team members would accept it, and if the software was worth the price. But most of those who started are still with us. Over time, they all saw that (a) the software does the job, (b) we are still releasing new features every three weeks, and (c) we are still answering questions on the same day.

CEELM: What did year one look like? What were some of the main hurdles you had to overcome and what was the team’s first win?

Aidas: There is a joke about the difference between a German and an American startup: an American startup will have two sales guys, one marketing guy, and two engineers; the German startup will have five engineers. We were like a German startup. Instead of focusing on sales and marketing, we focused on product development and started seriously selling in 2020. The first big win came in the second year, when we on-boarded the first international law firm, successfully imported the historical data from the last 15 years, and launched in four countries.

CEELM: And how have the company and its products evolved since then?

Aidas: Today Amberlo is used by law firms from 23 countries. We have 19 team members in three countries, and Amberlo is among the most user-friendly legal software on the market. 

CEELM: Are those 19 team members still all engineers?

Aidas: Half of our team members are engineers, and the other half do sales and marketing.

CEELM: Last year, Amberlo raised EUR 1 million from four venture capital funds and several private investors. What do you believe made the company particularly attractive to these investors?

Aidas: Investors trust the product, the team, and the market opportunity. Lawyers like Amberlo because it does the job well. It is one of the few legal platforms that offers Open API, which provides access to all platform functions and data for third party apps. Our own web and mobile applications use the same API ,making it very easy and reliable to integrate with. We have unprecedented development speed and state-of-the-art security. Our billing workflow and Microsoft365 integrations are some of the best on the market. The team made this possible. Before Amberlo, we, as a team, spent 15+ years delivering cloud-based solutions to top enterprises in Europe and around the world. This year we see law firms massively moving to the cloud, and we are here with all the experience, happy customers, and state-of-the-art technology.

CEELM: And what is the capital raised intended for? What can we expect from the company next?

Aidas: With the new investments, we will enter Spain, Germany, and France. Next, we plan to introduce AI tools to assist lawyers in 24 languages.

This Article was originally published in Issue 8.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Interview with the Partners of the New NGL Symbio Alliance.

CEELM: Tell us about the NGL Symbio alliance, and when it will become fully operational.

Roman: NGL Symbio – in simple words – is an alliance of five legal practices: Rowan Legal in the Czech Republic, NGL Legal in Poland, Erdos Katona in Hungary, HKV in Slovakia, and Biris Goran in Romania. We will be officially operational starting January 2021, although the preparations and discussions concerning its creation have been going on for some time now.

Krzysztof: NGL Symbio is the answer to market needs, and, at the same time, an innovative organization. We see the great interest of clients operating in the CEE region in obtaining coordinated services at a uniformly high level. Both large multinational corporations and local companies considering expansion are looking for forms of legal support other than those that have been offered to them so far by different law firms (i.e., a country-by-country service), or integrated international networks. Companies are now looking for new and more effective cooperation models. In some law firms operating in individual CE countries, there is a need to coordinate efforts to serve these clients at a supra-national level. NGL Symbio is a solution: an alliance of law firms, which at the national level retain their existing independence and provide clients with integrated services of high quality.

CEELM: Why did you decide to put the alliance together – what value will it add to its members?

Krzysztof: The idea of creating an alliance of independent law firms based on shared values and a simple organizational structure has been maturing in me for some time. While at my previous firm, I observed the rapid growth of the CEE market for legal services and the changes taking place there (e.g., some international law firms leaving the market, attempts to strengthen local practices by expanding, and the activity of regional firms from Germany or Austria). In my opinion, it is an excellent time to implement a new, transparent, and straightforward solution – to better serve our clients and provide the feeling of being part of a larger family. That was our approach from the beginning, and our partners in the region shared it.

Michal: We like the idea of joining forces to provide high-quality legal advice in CEE and a strong focus on winning new work and on doing what is necessary to attract it. Seasoned experts drive the member firms, whom we trust. We also enjoy transparent and honest communication among members.

Krzysztof: I am delighted with what my partners have said. Regardless of the hard work and packed calendar, we have a lot of reasons to be satisfied. Hence it is no coincidence that in our Rules of Cooperation there is a point stating: “The Parties shall make their commercially reasonable best efforts to have some fun along with the development of NGL Symbio project.”

CEELM: Krzysztof, the alliance shares its name with your firm. Does this mean NGL Legal has a primary managerial or administrative role in it?

Paulina: Allow me to jump in. Grupa NGL appears in the project in two ways: through NGL Legal – the initiator and partner of NGL Symbio – and through NGL Services, supporting the project from the operational side. For several years now, Poland has been the primary destination in CEE for shared services centers built by international businesses. The NGL Services team was responsible for setting up an operational support facilities for one of the global law firms from scratch, and running it for close to three years. This experience was invaluable when we were establishing the NGL Group. We relied not only on lawyers and tax advisors, but also on a strong management team with significant experience in running large international structures. The team’s experience and its easy scalability allowed NGL Symbio to be built from the beginning in line with large law firm operational standards. It also determines the innovation and attractiveness of our project.

Krzysztof: This solution has another vital feature; the clearly defined scope of support provided by NGL Services translates into a transparent system for allocating the operating costs of NGL Symbio. However, apart from the operational aspects mentioned by Paulina and the fact that the initiator of the idea was NGL Legal, our partners entrusted me with the function of the first MP of NGL Symbio, while Paulina is its COO. For all these reasons, our alliance started operating under this brand. Nevertheless, even at this initial stage, we have set up a discussion on rebranding down the road. The need to modify the name eventually may, for example, be related to the development of different regional service lines (such as tax concerns, though this example is not exclusive).

CEELM: How did you identify and select the other members of the alliance? Do you expect the alliance to grow in the months and years to come?

Gabor: Yes, more and more companies operating in this region are looking for law firms that can serve their needs on a regional level. We are sure that our smooth operation and exceptional legal advising quality will bring us more and more opportunities. Quality never goes out of fashion. 

Roman: I think the main component in choosing the members of this alliance was a similar background and working culture. We had, in some cases, already established a good working relationship based on positive experiences in the past. One of the alliance’s main goals is reliability in providing services, so it is only natural to invite firms that you have worked with previously. As for the alliance’s growth, it is essential to establish ourselves as a reliable partner in the CEE region first so that we do not take on too many challenges too quickly. After that, I do believe there is ample room to grow.

Michal: We do expect growth in terms of members and the amount of international work in the CEE region and adjacent countries (e.g., the Baltics, Balkans, and Adriatics). We have collectively identified several key practices, industries, and initiatives across our five firms to support that growth. The goal is to integrate our experts across the region, exchange know-how and expertise, and set up relevant offerings for our clients in the region. On January 1, 2021, we are starting with the first six – the Banking & Finance, Corporate M&A practices, the Real Estate and Energy industries, and, finally, the Cannabis Law and Investigations initiatives. We will be launching new ones on a quarterly basis.

Gelu: Exactly. We bring extensive experience in multijurisdictional projects to NGL Symbio. We have had the opportunity to work with many teams in the region. This should result in further geographical development, especially as several potential partners have already expressed interest in establishing cooperation. We will certainly be able to provide more information on the subject in 2021.

CEELM: In the first few months since the alliance’s creation, has it worked on any major cross-border or multi-jurisdictional deals or other client matters you can share with us?

Krzysztof: We are already carrying out several cross-border projects, and we have dozens of inquiries and information about our services, but please remember: NGL Symbio officially starts operating on January 1, 2021. I must admit that we often had to repeat this to ourselves, because, on the one hand, we are working with ambitious people – we wanted to implement as much as possible before this cut-off date. On the other hand, we knew very well how great a challenge it is to quickly promote a new brand on a particular market – in this case, the legal services market.

CEELM: You’ve obviously launched NGL Symbio in unique and challenging times. Has the ongoing Covid-19 crisis effected the process at all, or in any way limited the early effectiveness of the alliance?

Gabor: To the contrary. COVID-19 has changed many things on the legal market and brought new challenges, and the law firms able to give better answers to these challenges will benefit the most. The fact that we are starting our operation during such challenging times has allowed us to form our alliance in an appropriate way.

Roman: I think it is fair to say that you would be hard-pressed to find anyone who hasn’t been at least partially negatively affected by the challenging circumstances, and we are no different in these difficult times. However, I do believe that this early setback will motivate us to push ourselves even more once the situation is under control.

Krzysztof: When assessing the impact of the current situation on our project, I have two thoughts. First, I feel that we have not wasted this time: during the first wave, we started selecting partners and then adopted an Action Plan with them. During the second wave, regardless of the current customer service climate, we consistently implemented the Action Plan. Second, like many of our clients, we are trying to anticipate the post-Covid economy. Being stuck mentally in the situation we see outside the window does not move us forward. We see 2021 as an excellent opportunity for alliance partners and NGL Symbio as a whole. And we wish all your readers such a balanced/reasonable optimism for 2021. Warm regards to all and keep your fingers crossed for us.

This Article was originally published in Issue 7.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.