Category: Issue 11.5

Over the past three decades, Central and Eastern Europe (CEE) has experienced significant economic progress, which has catalyzed the development and sophistication of the legal profession within the region. As most economies in the region transitioned from centralized models to more market-driven frameworks, there arose a complex array of legal needs spanning corporate law, international trade regulations, intellectual property rights, environmental law, and others. This economic transformation has facilitated the growth of robust national law firms equipped to manage both the opportunities and challenges inherent in a rapidly expanding market environment.

The substantial economic growth in CEE has underscored the necessity for law firms to engage in extensive collaboration and networking. As cross-border transactions increase with the region’s integration into global markets, these firms have recognized the importance of forming international networks and alliances. Such collaborations not only enhance the capability of firms to manage complex multinational deals but also allow them to provide a more comprehensive service offering that aligns with global standards. This is particularly crucial in an era where transactions often span multiple jurisdictions, demanding a seamless integration of varied legal systems and practices.

Moreover, the evolving economic landscape in the region demands legal professionals who are not only well-versed in international law but are also deeply knowledgeable about local market dynamics and industry-specific regulations. The importance of understanding EU law cannot be overstated – it forms a common legal framework for most countries in the CEE region, guiding everything from compliance to regulatory approvals. Lawyers with specialized industry expertise – whether it be in energy, technology, finance, or environmental law – are increasingly seen as critical to the success of law firms. Their ability to navigate both the macro and micro aspects of the legal and economic environment allows firms to offer tailored, strategic advice that addresses both the immediate and long-term objectives of their clients.

Furthermore, the imminent accession of new countries in the region to the EU presents an exciting development. This expansion opens up new business opportunities for law firms in the region, as the harmonization of legal frameworks and regulations with EU standards facilitates cross-border transactions and trade and attracts new investments. The increased integration of these countries into the EU market creates a broader platform for legal professionals to engage in a wider range of commercial activities, offering potential growth and diversification for law firms in CEE. In addition to industry expertise, technology-driven solutions and AI will play a pivotal role. The adoption of AI and other technologies accelerates the processing of large volumes of data, predicts outcomes, and automates routine tasks, which enhances efficiency and accuracy in legal services. These technological advancements will enable law firms in CEE to stay competitive in a global market that continuously evolves technologically.

An in-depth understanding of local markets is equally crucial. As each country within the CEE region has its unique legal and regulatory framework, professionals who can adeptly navigate these local nuances can significantly mitigate risks and enhance the effectiveness of their legal strategies. This local expertise, coupled with a comprehensive understanding of EU law, is what will enable CEE law firms to competently handle sophisticated cross-border transactions that are pivotal for continuous growth and regional integration. Furthermore, the changing work dynamic toward remote working and the necessity for work-life balance policies cannot be ignored. The rise of remote working has fundamentally shifted how legal practices operate, providing flexibility and fostering a better work-life balance for legal professionals. Law firms that prioritize these aspects are likely to attract and retain top talent, contributing positively to their resilience and growth.

In summary, the economic advancements of the last 30 years within the CEE region have not only provided a fertile ground for the growth of the legal profession but have also raised the bar for legal services. The exponential increase in cross-border transactions necessitates robust collaboration and networking amongst law firms across borders. The integration of sophisticated technology, alongside strategies that promote work-life balance and adaptability to remote working trends, is essential. Success in this dynamic environment increasingly hinges on the availability of legal professionals who possess both deep industry knowledge and a good understanding of local markets, complemented by modern technological capabilities and a firm grasp of EU law. As the law firms in the region look toward the future, their ability to adapt and integrate these elements, alongside leveraging new business opportunities arising from the EU enlargement, will determine their resilience and influence in both the regional and global legal landscape.

By Dimitris Assimakis, Partner, Reed Smith

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Summer is traditionally a slower period for many, including the legal sector, but, if used right, the time can pay dividends for law firms.

Is There a Slowdown?

Summer often brings a natural slowdown. “At Guleryuz Partners, we do observe a degree of slowdown in the work pace during the summer months, not mainly stemming from the slowdown of activities of our own, but more due to the slowdown of general commercial activities worldwide,” Guleryuz Partners Partner Zahide Altunbas Sancak says. “This phenomenon is consistent across the legal industry, affecting not just our firm but also our clients and other law firms we collaborate with.”

A slowdown in the pace of work, according to Komnenic & Partners Partner Nemanja Radovic, “is largely due to the vacation schedules of both the courts and state institutions in Montenegro. Courts typically entirely cease their activities in August, and many state institutions begin to slow down their operations by July. Consequently, the workload decreases as these entities, with which law firms often interact, are less active.”

However, Eversheds Sutherland Slovakia Managing Partner Bernhard Hager points out that the impact varies by practice group: “Usually, transactions take place in autumn and spoil Christmas for transactional lawyers, while lawyers focusing on environmental, energy, or construction law often are busier in summer than around Christmas.” Consequently, Hager notes, summer is slightly slower, but “the negative peak is not as significant as it might in an M&A boutique.”

One practice that normally experiences slowdown, is litigation. In North Macedonia, “litigation work would slow down due to judges’ summer vacations from July 15 to August 15,” Debarliev Dameski & Kelesoska Partner Jasmina Ilieva Jovanovik points out. However, this trend seems to be changing in Bulgaria: “In the past, some of the practice areas – such as litigation – had a natural slowdown due to the court vacation. This is no longer so evident and the statistics show that even the dispute resolution teams are quite busy during the summers,” CMS Sofia Managing Partner Kostadin Sirleshtov highlights.

Ilieva Jovanovik and Jalsovszky Managing Partner Pal Jalsovszky also observe that while summer has traditionally been slow, this trend is gradually changing. “With good annual business plans and workflow estimates at the beginning of the year, our law firm in the past 20 years has not faced notable summer slowdowns,” Ilieva Jovanovik notes. “For a few years, summer is not a no-business period anymore,” Jalsovszky agrees. “Last year was very special in this respect as a window was open to establish family trusts and foundations with attractive tax features until September and we had an extremely high demand for such type of work. This made the summer months the most profitable period of the entire year – we established 77 trusts and three private foundations in this period.”

Holiday Coordination

One natural question during the planning of law firms’ activities during summer is that of holidays. “This is the season when our colleagues take the majority of their holidays,” Jalsovszky notes. “Further, Friday afternoons are not as efficient as during the rest of the years, it is normal that during the summer the weekend already starts at Friday, 3-4 pm.” Radovic agrees, noting that the firm “encourages staff to take their annual leave during this period to align with the reduced demand for legal services.”

Consequently, this impacts the workload. “Some members of the team, including myself, are increasing their average utilization over the summer period due to the fact that we have to cover for members of the team, who are on vacation, as clients never stop working and demanding legal services,” Sirleshtov notes.

“People take holidays, and we try to coordinate the leave periods so that on the one side each practice group remains capable of serving our clients, but on the other side, people do take holidays in the summer and not during lawyers’ peak seasons,” Hager agrees.

Staying Productive

Lawyers find ways to remain busy during slower periods. “We always have various projects on our shelves for rainy days,” Jalsovszky notes. “Not necessarily for the summer but for those days when our capacity is not fully exploited. We continuously develop the scope of our automated documents, which is our phare legal tech project. It requires lots of investment from our fee earners – mainly from senior lawyers. Further, we try to enhance the use of AI in our daily work which also creates an extra job.” Additionally, he continues, “clients never run out of tricky legal questions – which is obviously good for lawyers. Some of them also tend to dig into forgotten, unsolved problems during the summer period.”

Sirleshtov adds that during slowdowns, the firm engages in mid- and long-term projects important to clients. “If we are to start a transaction in September, during the summer we can prepare the Virtual Data Room, Indexes, draft SPAs, regulatory summaries, etc.”  Additionally, he says that it is a great time to focus on the collaboration between practice groups. “For instance, renewable energy due diligence for a greenfield project requires more real estate/planning knowledge than specific energy regulatory one and, therefore, the energy practice group should be collaborating with real estate,” Sirleshtov explains. “Collaboration across offices and international practice groups is essential for maintaining utilization levels and keeping clients happy.”

“Additionally, we use this quieter time to focus on internal projects, such as professional development, training programs, and updating internal processes and systems,” Radovic continues, with Ilieva Jovanovik adding that “the potential workflow slowdown is creating opportunity for increases of inhouse management activities, revising and updating marketing strategy, and organizing internal training and additional qualifications of our lawyers.” According to Ilieva Jovanovik, the firm is also organizing summer internships “for the Macedonian diaspora youth, during which they are introduced to the business and regulatory environment in their homeland.”

“We use the time for ‘maintenance’ like updating our templates, policies, client database, templates for submissions, BD materials, etc,” Hager adds. “We also agreed on projects with publishers, so we will dedicate more time to our publishing activities.”

“Summer is an exceptionally good time for our team to connect with other legal professionals, and participate in firm projects such as our recently published books,” Altunbas Sancak notes. “Additionally, we allocate more resources to long-term projects that might not require immediate client interaction but are crucial for our strategic goals.”

Projections for This Summer

This summer, certain events are likely to generate work. “The spring elections in North Macedonia have taken the focus of every business sector in the state, which is eager to see the new government established as soon as possible,” Ilieva Jovanovik notes. “The new regulatory reforms and significant investment projects announced by the winning party would make this summertime quite busy if such investments take place in the first months of the new government mandate which overlap with the summer period this year.” 

In Hungary, “the golden visa program will start this July,” Jalsovszky says. “There are a number of third-country applicants who are at the starting line. At the same time, the legislative background is still far from being elaborated. We expect that this will create a big demand for our immigration lawyers and our admin staff.”

For Hager, new legal acts and the need for implementation are significant factors for the summer workload, such as “the implementation of cybersecurity measurements according to the so-called NIS2 directive.”

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

In The Corner Office, we ask Managing Partners at law firms across Central and Eastern Europe about their backgrounds, strategies, and responsibilities. With managing firm clients being a critical aspect of firms’ operations, we asked: What are the three most important elements when onboarding a new client?

Kostadin Sirleshtov, CMS Sofia: These days the process of onboarding a client is much more complicated, especially for large international law firms.

The first and most important element when onboarding a new client is to check whether the client or any related parties are not subject to sanctions or covered by any conflicts. Conflicts alone are extremely complicated in large law firms, but the recent sanctions following the war in Ukraine and others are making the process even more complicated. Furthermore, some law firms have self-imposed stricter-than-standard conflict and risk assessment procedures in order to comply with a standard of conduct, which is higher than the minimal one required.

The second element when onboarding the client is to register the client, which involves investigating any specific requirements that the client has – invoicing, terms of payment, etc. These days we have many clients that do e-billing, which is complicated and requires special focus by the firm’s revenue team.

The third element in the onboarding procedure is the most pleasant one and it is related to the introduction of the teams and the internal instructions. It contains the very important kick-off calls and meetings, the introduction of the unique client reference number, the matter numbers, etc.

Pavel Hristov, Hristov & Partners: First, establish quick, comfortable, and reliable communication channels – designate contact persons and draw up clear communication protocols. Secondly, agree on the scope of work and desired outcome(s), KPIs, team(s), budgets/costs, and adjustment protocols, if changes are required going forward. Take measures to manage expectations in terms of outcome, time, and costs. Third, no conflict of interest under any circumstances. We would not engage with a most desirable new client, if there would be a conflict with the interests of one of our existing clients. Greed may not compromise our duty. The ultimate purpose is to lay the foundation for a lasting relationship of trust that will grow in time from the start.

Tomas Bagdanskis, Widen: Today’s customers expect convenience and consistency at every stage of their journey with law firms. In fact, 32% of customers say that even one bad experience can be a reason to walk away from a brand they love. Customer onboarding is one of the most important processes for every business as it is a clear sign to customers whether they’ve made the right decision in working with you.

The three most important elements when onboarding new clients are: First, clarifying the expectations of the client, providing a clear legal strategy, and being open about the chances for achieving those expectations. Second, agree on the manner of communication – defining what constitutes a timely response for sharing status updates, establishing the appropriate channels for sharing them, and assigning a contact person for urgent matters. Third, clearly define the criteria for calculating fees. Generally, we should focus on value delivery and make all processes in the client journey easy for the customer!

Ivana Ruzicic, PR Legal: When onboarding a new client in our law firm, three crucial elements include:

First, understanding the client’s business and needs – in our law firm, the initial step involves thorough comprehension of the client’s business operations, goals, and requirements. This understanding lays the foundation for tailored solutions and effective communication throughout the partnership.

Second, analyzing and addressing weaknesses – conducting a detailed analysis to identify any weaknesses or inefficiencies in the client’s operations is vital. Addressing these issues promptly helps enhance efficiency, mitigate risks, and improve overall performance.

Third, allocating a dedicated team – assigning a dedicated team to the client’s account fosters trust and ensures personalized support. This team should possess the expertise and resources necessary to address the client’s needs promptly and effectively, thereby building a strong and enduring client relationship.

Balazs Karsai, Nagy es Trocsanyi: The three most important things that we do in the context of onboarding a new client are: (1) conflict check – checking whether there is a conflict of interest between our existing clients and/or our firm on the one hand, and the potential new client on the other hand; (2) AML screening – required by law with some exceptions; and (3) negotiating the terms and conditions of engagement and executing the engagement agreement.

Djura Mijatovic, Zivko Mijatovic & Partners: For a multi-jurisdictional firm like ours, the following three key elements are crucial when onboarding a new client:

(1) Understanding client needs – it’s essential to comprehensively understand the client’s business, industry, and specific intellectual property requirements. This includes recognizing how their needs might differ across the 15 jurisdictions where our firm operates. Tailoring our approach to these unique aspects ensures we provide relevant and strategic legal guidance. (2) Communication and transparency – establish a clear communication channel from the start. This involves outlining the legal processes, expected timelines, and any jurisdiction-specific considerations. Regular updates and transparent communication foster trust and help manage expectations, ensuring the client feels informed and supported throughout their legal journey. (3) Team alignment – given our presence in multiple jurisdictions, the entire team, including lawyers, paralegals, and support staff, must be aligned and aware of the client’s needs and expectations. This coordination ensures that the client experiences seamless service regardless of the complexity of their case or the geographical diversity involved.

Istvan Szatmary, Oppenheim: At Oppenheim, client onboarding is seen as part of the service we provide to our clients, even if it involves more and more administrative tasks. For this reason, we have established a number of guiding principles that should be applied consistently at an early stage in the relationship.

The first principle comes from the IT sector: seamless user experience. Clients should feel that their onboarding process – even if it is onerous – is logical, transparent, and works as they would expect from a user-friendly application.

The second element is the one-stop shop. Clients should only have to deal with administrative issues in a single email, and only with those issues that we cannot resolve ourselves. We should use all our resources to gather the information we need and only ask clients as a last resort – the administrative work should be invisible.

Last but not least, at the beginning of the relationship, the one-stop-shop principle should also be applied to communication: clients should have one point of contact to coordinate all matters so that they do not have to figure out who to contact on a particular issue.

Milos Komnenic, Komnenic & Partners: First, understanding the client’s business, needs, and objectives – we prioritize understanding the client’s industry, business model, and operational nuances. This involves thorough discussions to grasp their needs, their goals, and the specific challenges they face. By understanding these aspects, we can tailor our services to meet their expectations and provide solutions that align with their strategic objectives. If we cannot fully understand the client’s business, we do not proceed with the engagement.

Second, setting clear communication and expectations – establishing clear lines of communication and setting realistic expectations from the beginning is crucial. This includes detailing the scope of work, timelines, costs, and any potential risks involved. Transparent communication helps build trust and ensures that both parties are on the same page, reducing the likelihood of misunderstandings and fostering a positive working relationship.

Third, ensuring an efficient onboarding process and documentation – this includes efficiently handling all necessary documentation, ensuring compliance with legal and regulatory requirements, and integrating the client’s information into our systems seamlessly. A streamlined process demonstrates our professionalism and commitment to providing a high level of service right from the beginning.

Tomasz Stasiak, Wolf Theiss Poland: Onboarding is a two-way process that allows the adviser to get to know the client and the client to get to know the adviser. Therefore, the first and most important objective of onboarding is to establish appropriate communication with the client. This typically involves multiple communication channels at different levels to ensure that communication is fast, accurate, and effective. Once this is achieved, the advisor should learn as much as possible about the client’s objectives, strategy, and internal processes. This helps to ensure that the service is actually useful to the client, while the service delivery helps to strengthen the relationship between the client and the advisor. This is also the basis for the third stage of onboarding – the most challenging but also the most rewarding for the advisor – identifying the client’s blind spots. Warning the client of the consequences of their blind spots and helping them to address them is the most value-added role of the advisor.

Bernhard Hager, Eversheds Sutherland Slovakia: Formal, financial, and relationship onboarding. Subject to local and international mandatory rules, our formal onboarding process comprises background checks such as KYC or AML checks. We bought a special program for sanctions checks and we do global conflict checks. When everything is cleared, clients have to confirm our engagement letter and our terms and conditions in writing. Our financial onboarding includes discussions about the entity for receiving our invoices, matter numbers, billing details, etc. However, the most important is the relationship onboarding – bringing the right people together so that on both sides experts who are not only good in their field of expertise but also are able to positively interact and communicate are involved. It happened already, that after a bumpy start, the change of the contact person on our or client’s side helped to establish a long-lasting relationship.

Sergiu Bivol, Vernon David: Onboarding a new client is all about building a happy and successful working relationship. The best way to start such a relationship is to have in mind the following elements:

Exchanging of information – to give your client the best service, you must have a good understanding of the client’s assignment and what they need. The most effective way to get to know the client’s needs, wants, and expectations, is by asking clarification questions. Sending the client a general presentation of the law firm is an excellent way to provide a potential client with information about your business, increase the client’s confidence in your expertise, and encourage them to use your services.

Holding an onboarding meeting – once you’ve gathered the information you need, you’ll want to have a face-to-face consultation with the client. This is an opportunity to establish a friendly working relationship and pave the way for open communication in the future. However you choose to structure your meeting, what’s most important at this stage is that you take detailed notes. If you’re hosting a video call, it might be a good idea to record it. This will ensure you have all the information you need to draw up your work plan.

Defining a clear scope of work – irrespective of whether you send the client a proposal first or the draft of a CLA, it is most important to define a very clear scope of work. It’s crucial to have the scope very well defined from the beginning, because it will help maintain a transparent, correct, and long-term relationship with the client, and will diminish payment risks.

Octavian Popescu, Popescu & Asociatii: First of all, establish clear communication. This means understanding the client’s needs, objectives, and concerns, as well as clearly explaining the services you provide, the timelines, depending on the project’s complexity, and the expected outcomes. Clear expectations surely help to avoid misunderstandings and establish a solid foundation for a strong and long-term partnership. Ensuring a transparent communication process, on both sides, represents the basis of a successful collaboration.

A clear and efficient communication process is not possible without thorough research and understanding of every client’s business and industry as a whole. You need to take time to comprehensively understand not just the client’s business and industry, but also any specific legal, economic, or social challenge. This deep understanding allows us to tailor the best services and the right solutions to the client’s unique needs, providing targeted legal advice and anticipating any potential risks. It also demonstrates the law firm’s commitment to providing value beyond basic legal services.

Last but not least, building trust is essential for a successful partnership. This involves not only demonstrating competence and expertise in the legal field but also being responsive, reliable, proactive, and adaptable to changes.

Pal Jalsovszky, Jalsovszky: First you need to run the compulsory KYC procedure. Although I would not consider it as one of the most important elements of onboarding, it is a must that needs to be adhered to. We also have our internal checklist for financial and controlling purposes. Who will be the party to the invoice? HUF or EUR? One-off or regular? What is the source of the engagement? Which area does the advisory belong to? Should it be presented in our submissions? Etc. All these questions may be painful at a point when you are already eager to give advice to a client but it is still the best time to complete this homework. And finally, there are various business issues that need to be decided: who would be the best person within the organization to run the advisory work, shall we ask for a retainer from the client, and the like.

Borivoj Libal, Eversheds Sutherland Czech Republic: When onboarding a new client, three crucial elements come to mind. First, it is essential that our firm has the required expertise in the relevant area of law and ideally within the client’s specific sector. This ensures that we can provide high-quality service tailored to their unique needs.

Second, conducting a thorough background check is critical, especially for a multinational firm. This includes KYC and AML procedures to ensure ongoing compliance with legal standards and to mitigate potential risks associated with the client.

Finally, it is important to reach a clear consensus on the scope and depth of the legal services provided and the related pricing. Transparency in these aspects ensures that the client feels they have received top value for their money, fostering satisfaction and encouraging repeat business.

By focusing on these elements, we not only facilitate a smooth onboarding process but also lay the foundation for a strong, trust-based client relationship.

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Romania’s economic landscape has shown both growth and resilience this year, driven mostly by public and private investments and domestic consumption. Popovici Nitu Stoica & Asociatii Managing Partner Florian Nitu, Nestor Nestor Diculescu Kingston Petersen Partner Gabriela Cacerea, and Tuca, Zbarcea & Asociatii Managing Partner Gabriel Zbarcea report on the pulse of the Romanian economy, focusing on key sectors, such as infrastructure, energy, IT, and automotive, that are leading this growth despite challenges like inflation, labor shortages, and geopolitical uncertainties.

Healthy Economy Across Multiple Sectors

“In the first quarter of 2024, Romania’s economic landscape showed moderate growth and significant levels of resilience despite global economic challenges and the regional geopolitical context,” Cacerea begins. “As per the forecasts of both local economic analysts and those of international financial institutions and considering the inflation rate which will continue to gradually decrease in the upcoming months, the Romanian economy will likely experience slight growth in 2024, estimated at around 2.7%, mostly powered by public and private investments and domestic consumption.”

Echoing this, Nitu says that Romania “benefits from concurrent favorable factors fostering growth, such as emerging market inherent or organic development, EU-funded large infrastructure projects, as well as a rally of pre-emptive investments in industrial facilities of immediate interest to the defense sector.”

Despite the growth, there are reasons for concern. As Zbarcea notes, Romania relies too heavily on domestic consumption, with large government deficits and poor tax collection. “It seems like the entire country is dependent on private sector investment and household consumption which, in the long term, is counterproductive,” he argues, while also remaining optimistic in saying that “more foreign investors are now taking a closer look at Romania after having previously avoided our country for reasons such as the Ukraine war.”

Primary Drivers

As for the specific sectors pushing the Romanian market forward, Cacerea reports that “there are ongoing projects, investments, and government initiatives that contribute to growth – and here we can mention infrastructure development projects mainly based on EU funds, FDIs, and export growth.” She adds: “At the same time, the energy sector will continue to be one of the drivers considering both the new technologies that need to be accessed and also the increased activities in the sustainability policies area.”

Sharing Cacerea’s sentiment, Nitu reports numerous growth opportunities, including greenfield and industrial investments, energy, oil and gas, real estate, agribusiness, the financial sector – both in terms of banking and capital markets, IT and telecommunications, healthcare, and pharma. “In general, the Romanian M&A market is expected to flourish in 2024 with other transactions worth over EUR 1 billion on the horizon,” he reports.

Looking at the big picture, Cacerea shares that, in her opinion, “one of the main pillars of Romania’s economic upturn is the increase in the attracted EU funds. In terms of the private sector, the increase of changes and developments brought by CSR and sustainability policies result in increases in various sectors, like the information technology and software development sector or the energy sector.” Moreover, she stresses that “Romania has the right tools to become a hub for tech companies and investors, as well as the required resources for growth in energy – alongside, the strong relationships with Western economies, for which Romania is a significant export market.”

For Nitu, the current level of economic growth appears to be influenced by a mix of several factors, including geopolitical matters and the overall economic status of the region. Specifically, he points to “the long-awaited interest rate cuts, the readjustment of sellers’ valuation expectations, the restart or intensification of investor interest after a period of relative caution and wait-and-see they entered in the second part of 2022, and, perhaps as a corollary of the above, the increased willingness of ‘free’ capital to ‘run’ out of banks and invest in real economy assets.”

In contrast, Zbarcea focuses on specific projects, highlighting the “underground low carbon electricity transmission project in Romania, an especially important project that will enable the transmission of green energy from the eastern region of Dobrogea to western Romania and EU member states.” According to him, “the development of the National Strategic Project Units 3 and 4 Cernavoda NPP, and the refurbishment and re-tubing of Unit 1 reactor,” are important as well, as is “Romania’s first small modular reactor to be built in Doicesti.” Furthermore, he shares that “Romania’s pumped storage hydropower project Tarnita-Lapustesti currently awaits feasibility study, with pre-feasibility consultations being carried out until August 8,” and that, if it were to move forward, it would be “the largest hydroelectric load balancing system in the country.”

More Good to Come

Finally, taking aim at the road ahead, Cacerea feels that, “for now, it seems that the country’s economy is moderately expanding. However, the evolution of the national economy might be impacted by several challenges and potential signs of slowdown.” According to her, these include “persistent inflation (despite the expected inflation fall), labor market issues, especially in terms of labor shortages in certain sectors, and the unpredictable political landscape which can lead to policy uncertainty, resulting in investment deterrence.” Additionally, Cacerea worries that “potential tax measures that may be taken to counterbalance the budgetary deficit, as well as the loss of trust from both consumers and companies resulting from a lack of transparency in terms of legislative measures are some of the risks that might lead to a slowdown of investments.”

For Nitu, looking ahead prompts a multi-faceted take. “There are economic domains where the organic growth potential remains unfulfilled and, therefore, if market forces are not constrained too drastically, development and economic achievement will occur. In the same vein, in certain sectors, a process of market consolidation is still ongoing and that will yield not only significant transactional work but also economic synergies,” he says. “In what regards large infrastructure or public-private projects, here the position is more nuanced, as availability of funding depends not only on the local realities or project implementation but also on the European Union’s own political and institutional dynamics. Certain fund reallocations are possible, and they could have an adverse impact on the Romanian public investments account,” he adds.

“Given that 2024 is an election year, I would expect a higher level of public expenditure and this, in turn, will put more pressure on inflation rates and budgetary deficit,” Zbarcea notes. “Further, Romania must address – sooner rather than later – a range of internal challenges, such as the aging population and the labor shortage, especially in sectors like healthcare and medical services and tourism and hospitality,” he adds, also stressing the need for a stronger push for digitalization.

“Finally, there is the war in Ukraine and in the Middle East,” Nitu reflects in conclusion. “Both may have a direct impact on the Romanian economy, by accelerating certain divestments and even market withdrawal of strategic investors or by limiting new FDI.”

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

The competitive landscape in Romania is marked by rigorous enforcement and alignment with EU regulations, making it a challenging, dynamic environment for businesses. Tuca Zbarcea & Asociatii Partner Andreea Oprisan discusses recent legislative developments and the Romanian Competition Council’s proactive measures in an effort to shed light on this complex legal framework.

CEELM: How would you describe the current competition landscape in Romania?

Oprisan: It is indeed a very competitive environment, with high quality in both the actions of the Romanian competition authority – a well-reputed body – and efforts to support the economy and align competition law with EU legislation. Each year, new and increasingly diverse cases arise, making the practice here very challenging and engaging.

CEELM: What significant legislative developments have occurred in recent years? How does Romanian competition law interact and align with EU regulations?

Oprisan: The Romanian and EU legislation are significantly similar since Romania incorporates various EU regulations directly into Romanian law. The European Commission’s extensive expertise influences our competition authorities, who closely follow EU guidelines on topics such as agreements between competitors and vertical agreements like those between suppliers and distributors. Last year, competition law was amended extensively, incorporating the ECN+ Directive. To some extent, several of such principles were previously applicable but not formally codified. To name a few, in line with the ECN+ Directive, competition law now includes provisions on enhanced cooperation between EU authorities, the right against self-incrimination, and the liability of a mother company for its affiliates. Although these principles were recognized in practice, the authority preferred to have them explicitly stated in local legislation.

Even in the absence of such amendments, in line with the case law of EU courts, there have been attempts in the past (around 2010-2012) to establish the liability of the mother company, but such a case was dropped due to insufficient proof on the merits. The topic remains under scrutiny, and it will be interesting to monitor how the principle of mother company liability will be applied by the local authority in the future and assumed by local courts over time.

CEELM: What are the key actions taken by the Romanian competition council? Are there specific sectors or types of anti-competitive behavior that the RCC is particularly focusing on?

Oprisan: With the implementation of the ECN+ Directive, the authority can now examine with more confidence not only laptops but also other mobile devices and communication platforms like WhatsApp and Teams. According to public information, the competition authority recently imposed significant fines on a TV and mobile phone supplier and IT retailers for anti-competitive behavior, utilizing messages from such platforms as evidence in their case.

The authority is increasingly using screening tools to detect price increases and other potentially anti-competitive behaviors. For instance, they initiated simultaneous investigations in the food sector, targeting specific products like sunflower oil, butter, and sugar, demonstrating their commitment to thoroughly examine the market without discrimination. Statistics show that the pharmaceutical and retail food markets are top priorities, but the Romanian competition authority only intervenes when necessary, using multiple sources to detect potential infringements, such as whistleblower reports and market analyses. Another relevant case made public by the authority last year was a fine applied to three companies, part of the same group, acting in the dairy manufacturing market in Romania, where the authority applied fines for not allowing access to certain employee correspondences.

The authority continues to be very active, maintaining a busy agenda, not only being involved in anti-competitive cases but also handling numerous complex merger cases and being involved in local state aid matters.

CEELM: What are the primary challenges that businesses face under the current competition framework in Romania?

Oprisan: Romanian businesses are accustomed to an active competition authority. The overall economic context – including the war in Ukraine, the post-COVID-19 economic impact, or inflation – poses a risk as companies might be tempted to breach competition law in survival mode or may lead to accidental breaches of the law. The Competition Council warns that competition law must be respected despite these crises. Continuous training and compliance programs are essential, doubled by day-to-day advice helping employees recognize potential issues and escalate them appropriately.

The concept of “facilitating” competition infringements is also gaining attention, where businesses might act as hubs for anti-competitive agreements between competitors, leading to significant fines. This concept, which existed in the EU for many years, is now being emphasized in Romania. For instance, facilitating agreements between business partners and acting as an information hub can lead to substantial fines, potentially higher than those imposed on cartel members if the total turnover of the facilitator is larger. Given the current inflation, the Romanian government has intervened to cap markups on basic food products, with the Competition Council offering support in overseeing the implementation of the measure. This is in addition to the Price Monitor platform introduced by the Competition Council, where consumers may check certain retail food prices and retail fuel prices.

In fact, one could not say that a certain sector escapes the authority’s review. The authority is currently looking into the banking sector through two ongoing investigations, is monitoring the price evolution for electricity, oil, and gas due to their importance as economic engines and for day-to-day activities, but is also looking into more innovative areas, such as an investigation against a large IT company with an international presence, in line with investigations in other EU jurisdictions. No sector can escape their scrutiny, whether innovative or traditional markets.

CEELM: Looking ahead, what major developments or changes do you foresee in the competition law landscape in Romania in the coming years?

Oprisan: I don’t expect a decrease in activity. The Competition Council is likely to increase its focus on IT-related agreements and cloud-stored information, leveraging technology to identify areas requiring intervention. They will likely expand their scrutiny beyond traditional devices and explore accessing various cloud-stored information. This will significantly enhance their ability to uncover potential evidence hidden in digital spaces. The authority is expected to maintain its pursuit of meaningful cases, especially cartels and bid rigging cases. They will likely continue to collaborate with relevant authorities to ensure a level playing field across different sectors. Tenders remain a key focus area, with the authority cooperating carefully with relevant authorities to ensure fair practices.

The recent amendment of the law allowing the government to request short-term investigations from the Competition Council regarding pricing issues is expected to also have an impact. This collaborative approach demonstrates their commitment to addressing key consumer concerns and effectively managing market dynamics. Although this practice aligns with their actions so far, it is anticipated that there will be a growing interest in and understanding of circumstances, leading to better management of information and potentially various new cases.

Technological advancements help the authority work better and more efficiently, increasing the risk of detection for potential breaches. A few things can be hidden from technology, but the overall trend is toward greater transparency and scrutiny.

CEELM: Based on your personal experience, what is one piece of advice you would give to businesses to navigate the competition law environment effectively in Romania?

Oprisan: Compliance with a forward-looking perspective is crucial. Businesses should implement robust compliance programs that equip employees with the tools and confidence to escalate potential issues. Regular training is essential to maintain awareness and prevent unintentional breaches. Given the increased risk of detection with the expanding use of technology, transparency, and proactive management are essential to avoid operating in grey areas of the law. Additionally, businesses should consider all aspects of compliance beyond initial implementation, ensuring safeguards are in place to prevent unintentional breaches. Encouraging employees to escalate issues to the most relevant person – whether management, legal departments, or external lawyers – based on the internal organizational structure fosters an environment of transparency and proactive issue resolution.

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

In light of Moldova’s recent candidacy for European Union membership, significant political and legal reforms have been undertaken to align the country’s laws with EU standards. Among these changes, the data protection legal framework has seen notable upgrades to mirror the General Data Protection Regulation, with Gladei & Partners Partner Iulian Pasatii emphasizing the introduction of contractual clauses for data transfers and the new concept of subprocessors. According to him, these changes aim to reduce bureaucratic burdens, particularly benefiting Moldova’s IT sector, while presenting opportunities for clearer guidelines and enhanced data protection practices. However, challenges remain as Moldova strives to balance stringent EU-aligned regulations with the flexibility needed for business growth.

CEELM: Can you provide some background on the recent updates to Moldova’s data protection legal framework?

Pasatii: The recent upgrades to Moldova’s data protection legal framework are part of a broader political and legal shift toward aligning with European Union standards. With the Republic of Moldova receiving candidacy for EU membership in June 2022, there has been a strong push to amend various laws to meet EU criteria. Among these crucial amendments is the alignment of Moldova’s data protection laws with the General Data Protection Regulation (GDPR). While our laws are not identical to the GDPR, this alignment signifies a political commitment to adhere to EU policies and views on data protection.

CEELM: What are some of the crucial amendments introduced in this update?

Pasatii: One of the key changes is the introduction of contractual clauses for data transfers. While these clauses have been standard in the EU for quite some time, they are relatively new in Moldova. These now cover data transfers between controllers, controllers to processors, and processors to controllers. Previously, Moldovan controllers faced significant challenges in aligning with foreign partners due to the absence of these standardized clauses. The recent approval of these clauses by the Moldovan regulator, although late compared to the EU, marks an essential step forward.

Another significant change is the introduction of the subprocessor concept, which was not part of Moldovan law until about a year ago. This change is particularly relevant for IT sectors and data protection controllers as it facilitates smoother data processing operations involving subprocessors located abroad.

CEELM: Content-wise, what else is new in the framework? How does it compare with the EU standards?

Pasatii: The primary difference between Moldova’s current framework and the GDPR is the scale of sanctions for non-compliance. In Moldova, fines for data protection violations are relatively small, usually amounting to a few hundred euros. This is in stark contrast to the GDPR, where fines can reach up to 4% of a company’s global turnover, potentially amounting to millions of euros.

While the smaller fines in Moldova provide some operational freedom for businesses, they also highlight a critical area for future improvement. The Moldovan government has already put on its agenda a new data protection law aimed at aligning these fines more closely with GDPR standards, though we are still discussing significantly lower amounts compared to the EU.

CEELM: How have these changes impacted businesses?

Pasatii: The IT sector in Moldova has been significantly impacted by these legal amendments. The new framework reduces bureaucratic burdens and streamlines processes for submitting documents to foreign partners, controllers, and processors. This positive change is expected to boost economic activities by enabling data processing operations, cloud solutions, and other business ventures at a larger scale.

Before these amendments, pre-approval procedures could take anywhere from six months to a year, significantly delaying projects. The elimination of these procedures means that Moldovan businesses can now operate under rules similar to those in the EU, facilitating smoother and faster implementation of projects in the ICT area.

CEELM: What are the main opportunities and potential pitfalls of this new legal framework?

Pasatii: One of the main opportunities presented by this new framework is the clearer guidelines on data transfers and operations in a multi-jurisdictional market. By adopting standards similar to the EU, Moldovan businesses can now ensure the same level of data protection, which is crucial for success in international markets. Following the EU’s lead in this area is beneficial because it allows us to leverage their experience and best practices.

However, there are also challenges. While aligning with the EU framework brings a more mature and regulated environment, it also introduces higher fines and stricter regulations, which can be daunting for some sectors. The key will be finding a balance that ensures robust data protection without stifling business innovation.

CEELM: Are there any new specific rules or provisions worth noting?

Pasatii: Yes, we now have specific rules and provisions covering data protection impact assessments. These assessments include various aspects that have been part of the GDPR for quite some time. This addition is a positive step as it provides a structured approach for evaluating and mitigating data protection risks, further aligning our practices with EU standards.

CEELM: Looking to the future, how do you see the Moldovan regulator treating these new rules?

Pasatii: The future treatment of these rules by the Moldovan regulator will be critical. While the current framework aligns closely with the GDPR, it will be interesting to see how the regulator adapts these rules to the Moldovan context. The approach to data protection in Moldova will need to balance strict compliance with practical flexibility to support business growth. As we gain more experience and develop best practices, I believe Moldova will continue to refine and improve its data protection landscape.

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

In the Inside Track, General Counsels across CEE share the nuances of their roles, challenges, and strategies for success. With organizations continuously challenged to adapt to new and complex legal frameworks, this time we asked: For the implementation of whistleblowing requirements, do you intend to use internal resources or outsource, and why?

Wioletta Kaloska, General Counsel & Proxy, Symfonia: I chose to outsource the entire whistleblowing procedure because I lacked the internal resources to manage this topic effectively. I needed someone with experience in this area not only to advise me but also to guide me through the process, leveraging their knowledge and experience, even assuming the role of project manager, and eventually managing the tool we selected together as one of the channels for reporting suspicions of any wrongdoing. It was crucial for me to build trust with such an advisor, ensuring that when a report is made, I have a trusted, experienced individual by my side who understands our organization’s values and knows how to navigate Symfonia. An additional advantage of this approach is undoubtedly the maximization of anonymity/confidentiality of the report and protection of whistleblowers, limiting the number of individuals with access to the report to just one person (General Counsel) and ensuring that only a select few individuals know the whistleblower’s identity. The entire process occurs outside the organization, and individuals within the organization involved in the investigation do not learn the whistleblower’s identity unless absolutely necessary.

Natalia Mochales, Vice President and Head of Compliance, Ericsson Middle East & Africa: Today we can say that it is not possible – and in many cases, it is legally required – to have an effective compliance program if the company does not have an internal reporting system. It is a decision that requires some evaluation and assessment before implementation. The company will have to consider among other aspects the budget, resources, company size, and number of employees to decide whether the ideal is a whistleblowing channel managed entirely internally, outsourced, or in a hybrid way.

Once this is clear, each system has advantages and challenges and therefore the decision will depend on different factors. Utilizing internal resources for a whistleblower program ensures direct control over the whole process. However, this approach requires significant investment in software and personnel who are dedicated to managing the program. Maintaining confidentiality and objectivity can also be challenging, as internal staff may have biases or conflicts of interest. Outsourcing to third-party providers can enhance anonymity and objectivity, making employees more willing to report misconduct. However, you will not have full control over the investigation process and security standards.

In my experience, I have always worked with hybrid systems in which you subcontract to a third party the reception of the allegations which provides a 24/7 service, translates the messages received, and subsequently passes them on to the internal compliance department who are responsible for the matter from that moment on. This model has the advantages of external and internal models and reduces the disadvantages to a great extent. One of the main challenges is that organizations must dedicate significant efforts and resources to training their people and engaging them via internal communication as in the internal model.

In conclusion, the decision between internal and outsourced whistleblower programs depends on organizational priorities such as control, cost, and the need for objectivity and expertise. A hybrid approach can also be considered to leverage the strengths of both options.

Mate Lapis, Head of Legal, Cherrisk: We adopt a hybrid approach for whistleblowing management. We utilize an external platform provided by whistleblower software on a subscription basis. However, we have developed an internal group and company-wide policies alongside compliance officer oversight to ensure adherence to regulations and effective handling of cases. Our compliance officer manages the platform, ensuring its alignment with legal requirements and overseeing the evaluation process, including contingencies for potential complaints against the officer. This approach combines external technological support with internal responsibility, ensuring comprehensive whistleblowing management in line with regulatory standards.

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Microsoft Corporate, External, and Legal Affairs Head for Central Europe Gabriela Popescu talks about her career and her passion for navigating complex legal landscapes.

CEELM: Please walk us through your career path leading up to your current role.

Popescu: I am a trained Romanian lawyer who graduated from a law school in Bucharest back in 1990. Regarding my career, I’ve always been an in-house counsel. I was a university student in Bucharest just after the Romanian Revolution when significant changes were happening in all aspects of our lives. At that time, the scope of a law graduate was being redefined. As a student, I decided I wanted to work for a big company, but I was not sure what this meant exactly. It might have been a stroke of luck or destiny that I saw an advertisement for Coca-Cola hiring new graduates. I decided to apply, leading me to start working at Coca-Cola as an entry-level legal advisor before graduating from law school.

It was a great time when I got to learn a lot. Despite learning a lot of theory in law school, I had little practical experience, which I could only gain from working. What probably gave me a competitive advantage at that time was my fluency in English. The role at Coca-Cola was a combination of legal and public affairs at the time, and we didn’t know too much about such work in Romania. After two years at Coca-Cola, I was recruited by another major company, Colgate-Palmolive, where I spent the longest period in my career – 17 years. When I started, the company had two factories and over 1,000 employees, presenting a very complex and dynamic work environment. The Romanian market was just being shaped in 1996, with many things to establish, including working with distributors and unions in a new economic landscape – so there were many things to do, relating to diverse fields of activity.

During this time, I realized the importance of understanding business operations, prompting me to return to school. This led me to pursue an MBA to expand my understanding of businesses. As a General Counsel, I saw my role as that of a business partner – so attending an MBA was the right thing to do at that time. Working for such a significant multinational company was an incredible learning experience. The company had a great organizational culture, and together with my colleagues we all received extraordinary training and formed a strong community.

After 17 years with Colgate-Palmolive, I made a significant industry shift to pharmaceuticals, which was an important change, given the industry’s sophistication. After a lengthy interview process, I joined Novartis Pharma company as Head of Legal and Compliance. I worked there for five years. As this is a highly regulated industry, it was a significant professional change requiring me to learn everything from scratch. This stage of my career was challenging but essential for my growth, helping me develop both professionally and personally.

In 2017, I moved to Microsoft, which was again a significant industry change for me. Coming to Microsoft felt like I had finally found my place. The learning curve was immense – and it still is – while being surrounded by sophisticated professionals, in an industry that is changing at an extraordinarily rapid pace. I started as a Legal Director for Romania, expanded my activity further to cover 25 countries, and since July last year, I took over my current position, of Corporate, External, and Legal Affairs lead for Central Europe, where I focus more on government affairs activities, in addition to the legal ones.

CEELM: Between your different roles in the in-house world, what were the most pleasant aspects of your work?

Popescu: As a lawyer, I love tackling complex problems and breaking them down into manageable pieces. This brings me great joy and professional satisfaction, especially in government affairs and public policy.

I enjoy identifying market issues, such as why businesses avoid certain products, and creating holistic plans to address them. This involves understanding the problem, engaging stakeholders, and developing a comprehensive strategy to overcome the respective situation.

I noticed that from a legal perspective, solutions might often come quite rapidly, while public policy activity takes much longer until a result is achieved. Identifying an issue is just the first step; it can take years to see the final outcome, requiring structured efforts over an extended period.

CEELM: How large is your in-house team currently and how is it structured?

Popescu: Our in-house team is structured differently from traditional legal teams. We have a vertically integrated structure with specialists in areas such as privacy, data protection, healthcare, and financial sectors. Although these colleagues are not formally included in the Central Europe team, they support the teams across various regions.

CEELM: How do you determine whether to outsource a project or utilize internal resources and what factors influence your choice of external counsel?

Popescu: When a project involves specific Microsoft knowledge, our internal team is fully equipped to deal with it. For projects where local market insight is needed, we bring in external lawyers. The external lawyers’ teams work with our in-house team, ensuring a blend of internal expertise and local understanding. Within the EU, we adjust our approach based on regional differences, always involving local lawyers to grasp market specifics.

When selecting external counsel, the agility of the respective team is essential and, sometimes, more important than knowledge, which can be accumulated. The fast-changing nature of our work demands flexibility. From my experience, knowledge can be learned, but the agility of the law firm, availability, and desire to address new topics is crucial. For new, unprecedented projects, I choose a law firm that is flexible and eager, even if they might not have all the needed expertise at the time. A lawyer must understand new laws and market trends, and approach issues holistically – and I managed to develop strong relationships with agile and skilled lawyers in Romania over time, who also consider these skills essential for their growth.

CEELM: What has been keeping you and your in-house team busy over the last 12 months? What about the upcoming 12 months? What are you keeping on your radar that you think will impact your workload the most?

Popescu: Given the specifics of the industry that I work for, digitalization legislation and projects at country levels and, of course, artificial intelligence topics, are high on our agenda. These are very important projects, that involve both governmental affairs as well as legal work – and they keep our agenda full.

CEELM: Looking at the future, what do you anticipate as the primary challenges for General Counsels in Romania in the near to mid-term?

Popescu: Talking about Romania, we have an amazing community of GCs. Once seen as a unilateral role, GCs here are now business partners, consultants, and board members, so there is a lot on their plate. Romania is lucky to have such skilled professionals.

If I look at the industry where I work, artificial intelligence is going to keep us busy. The challenge of AI does not only come from this technology being available but also from the need to understand that its use must be done cleanly and responsibly, in compliance with clear ethical principles.

One of the other challenges I also see professionally covering more than 20 countries comes from the speed with which new regulations appear and the professional need to be aware of everything that is happening – the challenge of time, if you will.

Overall, I believe GCs have a crucial advisory role in these times and, regardless of the industry where we work, it will be an intense period for all of us.

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Bogdan Plesuvescu has worked in both Moldova and Romania’s banking sectors, progressing from a legal role at Banca Transilvania to CEO of Viktoriabank to Deputy CEO back at the “mother organization.”

CEELM: Tell us a bit about yourself and your career path leading up to your current role.

Plesuvescu: In 2003, I started my career in the banking sector as the deputy legal manager at a bank in Romania, which was owned by Turkish shareholders. Joining this institution marked the beginning of what I consider to be the ideal start to my professional journey. The experience presented numerous challenges and abundant opportunities for learning, particularly in the realms of negotiation and retail banking. My tenure at Credit Europe Bank significantly influenced my future career trajectory, for which I hold immense gratitude.

Transitioning to a prominent international organization provided me with invaluable insights into the dynamics of global banking operations. Working across various jurisdictions broadened my perspective and facilitated extensive networking opportunities. Moreover, my involvement in addressing competition council issues locally, coupled with knowledge exchange sessions in London, equipped me with indispensable expertise in navigating such regulatory landscapes.

Subsequently, at ABN Amro Bank, I assumed broader responsibilities beyond legal matters, encompassing collections and turnaround initiatives within the banking sector. This transition culminated in my elevation to the role of vice president at Finansbank Romania Bank, marking a significant milestone in my career progression.

In 2013, I joined the Banca Transilvania group, assuming the role of Legal Director and overseeing the workout and collection departments. Notably, the period coincided with the group’s active involvement in several pivotal acquisitions, including Volksbank (2016), Bancpost – EFG Group (2018), and Victoriabank (2018) in the Republic of Moldova. These acquisitions propelled the bank’s market presence, presenting multifaceted challenges and opportunities for growth.

Following the successful acquisition of Victoriabank in Moldova in 2018, I was appointed as its CEO, embarking on a transformative journey aimed at enhancing corporate governance and fostering sustainable growth. Over the ensuing five years, amidst formidable challenges such as the COVID-19 crisis and regional geopolitical tensions, our concerted efforts resulted in the bank’s remarkable evolution into a high-performing institution with robust governance frameworks.

My subsequent role as deputy CEO at Banca Transilvania, commencing last year, signifies a return to the mother organization, albeit with expanded responsibilities encompassing group subsidiaries coordination in addition to legal, workout, and collection. Noteworthy engagements include my participation in an M&A project within Moldova where Victoriabank acquired BCR Moldova (part of Erste Group) in 2022 and the recent acquisition of OTP Bank in Romania, underscoring the group’s strategic expansion initiatives.

As I navigate my current role, based in Romania, I am committed to leveraging my diverse expertise to drive sustainable growth and foster excellence across Banca Transilvania’s diverse business domains.

CEELM: What were the main elements that led you from the position of a legal advisor to a management position?

Plesuvescu: I believe that skills, primarily determination, focus, and problem-solving abilities, are crucial in navigating challenges and fulfilling roles effectively. In the realm of in-house legal work, it’s often perceived that lawyers merely interpret the law without offering practical solutions. However, in reality, in-house lawyers adopt a pragmatic approach to problem-solving, patiently listening and strategizing to mitigate risks. Throughout my career, I strived to broaden my expertise beyond legal matters, engaging in activities such as workouts and leadership. This diversified skill set underscores the notion that even an in-house lawyer can ascend to the role of CEO, demonstrating that there are no inherent limitations in career progression.

CEELM: During your tenure, what would you describe to be the most intense period?

Plesuvescu: In Moldova, one of the most pressing challenges arose during the COVID-19 period. Initially, our organization operated entirely from the office, relying solely on paper documents without any electronic archives. However, from March 15 to April 1, we faced the task of transitioning to a work-from-home setup. This transformation was particularly daunting, given that we lacked laptops and relied solely on desktop computers. Within a short span, we had to procure nearly 800 laptops, establish VPN connections, and implement stringent security measures. This demanded significant resources, both financial and human, to accomplish within a two-week timeframe.

This experience prepared us for the subsequent challenge triggered by the outbreak of war in Ukraine. Overnight, we were confronted with a surge of refugees seeking assistance, including access to financial services. Additionally, our own staff expressed concerns about relocating their families to safer jurisdictions, considering Moldova’s non-membership to the EU. To address these concerns, we developed a comprehensive program aimed at providing support and reassurance to our team members. We assured them that, in the event of any adverse situation, we would prioritize their safety and facilitate necessary arrangements, including backup plans for relocation to Romania if needed. Despite the uncertainties, none of our team members chose to relocate with their families, signaling their trust and commitment to the organization.

CEELM: How large is your in-house team currently, and how do you decide if you will outsource a project?

Plesuvescu: Banca Transilvania is the largest bank in Romania, with a comprehensive presence covering retail, SMEs, and corporate sectors, boasting over 500 branches nationwide. Our operational model relies heavily on an in-house legal team, comprising nearly 100 professionals stationed at headquarters. These in-house lawyers handle day-to-day activities encompassing retail, SME, litigation, corporate governance, and regulatory compliance. Our preference for an extensive in-house team stems from the desire to maintain control and expertise internally rather than outsourcing.

However, for specialized projects such as M&A transactions, we collaborate with external legal experts. This strategic decision to outsource arises when additional expertise is required, particularly for transactions involving specific industries. We establish partnerships with external lawyers to complement our internal capabilities and ensure the success of these projects. Similarly, in cases of heightened litigation risk, we engage external legal support to augment our in-house team’s capabilities.

Selecting external legal partners is a meticulous process, heavily reliant on established trust and prior relationships. Once engaged, the continuity of working relationships proves beneficial, as familiarity with our organizational structure and demands streamline collaboration. Despite our stringent requirements and tight court filing deadlines, we maintain high standards for external legal partners, choosing from a select group of trusted professionals with proven track records.

CEELM: What has been keeping you and your in-house team busy over the last 12 months? What about the upcoming 12 months? What are you keeping on your radar that you think will impact your workload the most?

Plesuvescu: Digitalization, particularly in the realm of AI, is increasingly prevalent within the banking sector. Discussions encompass various areas, emphasizing the need to enhance automation not only in legal tasks but across all banking activities. This shift presents numerous challenges, requiring the development of new skills within the legal domain. Legal aspects of automation and digitalization demand thorough documentation, up-to-date knowledge of legislative changes, and the implementation of best practices. Managing these aspects keeps us extensively engaged, both in accumulating knowledge and integrating AI-driven tools and systems into our in-house operations.

Internally, there are ongoing debates regarding the potential for AI to replace the work of in-house lawyers. However, my stance is that we should embrace technological advancements rather than fear them. The focus should shift toward exploring how lawyers can collaborate with AI to enhance productivity and streamline legal processes. Instead of viewing AI as a threat, we should seek ways to leverage it to improve efficiency and clarity in legal work.

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

An in-depth look at Paul Buta of Musat & Asociatii covering his career path, education, and top projects as a lawyer as well as a few insights about him as a manager at work and as a person outside the office.

Career:

• Musat & Asociatii; Partner; 2016-present
• Musat & Asociatii; Managing Associate; 2013-2016
• Musat & Asociatii; Senior Associate; 2012-2013
• Private practice; 2009-2012

Education:

• Nicolae Titulescu University of Bucharest; PhD – Intellectual Property Law; 2014
• University of London; LL.M. – Intellectual Property Law; 2014
• University of London; PgDip – International Business Law; 2013
• University of London; PgCert – Commercial and Corporate Law; 2013
• Babes-Bolyai University Cluj-Napoca; MA European Affairs and Program Management; 2006
• Nicolae Titulescu University of Bucharest; LL.B.; 2005
• University of Bucharest; BA Political Science and Government (English); 2004

Favorites:

• Out-of-office activity: Spending time with my family and reading
• Quote: “Always remember that you are unique. Just like everybody else.” – seen on a poster
• Book: Novecento by Alessandro Baricco
• Movie: Snatch (Guy Ritchie, 2000)

Top 5 Projects:

• Representing ZTE in the ZTE vs Vringo SEP dispute – one of the first multi-continental SEP litigations with a huge number of parallel and incidental procedures and a lot of business, technical, logistical, and political perspectives to keep track of.
• Representing CDK in the CDK vs IT Top Solutions litigation – a major precedent-setting dispute redefining the jurisdiction for preliminary injunctions for infringement of IP rights (for the better) and for main claims of infringement (for the worse) where an arbitration clause also applies.
• Advising Sig Sauer in a competition law investigation – cleared the client of alleged infringement of competition law in a rare precedent-setting decision annulling the infringement decision due to a wrongful definition of the relevant market.
• Representing the George Calinescu Institute of Literary History and Theory in a pro bono case currently with the CJEU which could end up reshaping the core concept of copyright law in Europe and also solve many of the current questions on AI.
• Advising Electrolux in a competition law investigation – this was the first known use of mathematics (not economics) to counter a cartel allegation, involving looking at a linear Diophantine equation with 2,356 unknown variables. 

CEELM: What would you say was the most challenging project you ever worked on and why?

Buta: I believe that the ZTE vs Vringo SEP dispute would qualify as it involved not only multi-territorial IP litigations of every possible kind (preliminary proceedings, infringement claims, patent annulment counterclaims, mandatory licensing proceedings – the latter for the first time ever to be brought in Romania) on a very complex and novel type of patent (standard essential patents for telecommunications), but also a very complex factual and legal background (contractual and corporate history of Vringo, the NPC, and Nokia from whom the patent portfolio had been acquired), multiple non-IP legal proceedings but still related to the patents (competition law complaints with competition authorities in multiple jurisdictions, enforcement proceedings and counter-enforcement proceedings, provisional measures in enforcement proceedings, contractual claims before US courts and provisional relief measures related to such litigated in multiple US states, federal agencies national and cross-border investigations, etc.) and an overall very sensitive international geo-political component with very surprising effects on the ongoing proceedings.

CEELM: And what was your main takeaway from it?

Buta: In order to bring value to such a challenging project, which can be the centerpiece of a lawyer’s career, the increasingly intertwined relationships across borders and continents and the increased complexity brought on by technology require not only the widest perspective of analysis (across practice areas and jurisdictions) but also a basic understanding of (and a hungering curiosity for) many, many things beyond the law.

CEELM: What is one thing clients likely don’t know about you?

Buta: I would guess there are not many clients who know that I also hold a Political Science degree and that I consulted on marketing, branding, and communication strategy before becoming an attorney.

CEELM: Name one mentor who played a big role in your career and how they impacted you.

Buta: Professor Viorel Ros had a major impact on my career. He was one of the very first persons I met when I moved from Cluj to Bucharest, who I worked with both in the university (for over 18 years now) and as a young attorney and trademark and patent attorney, who I had the privilege of accompanying in his many efforts to create and consolidate NGOs in Romania to encourage the study of intellectual property law and to publish scientific magazines and organize conferences on relevant subjects, and who also coordinated my PhD thesis and guided my career toward the practice of intellectual property law. It is difficult to name all the ways in which his guidance is reflected in who I am as a person, as a lawyer, and as an academic.

CEELM: Name one mentee you are particularly proud of.

Buta: My Deputy Managing Partner, Dan Minoiu, is a lawyer who has grown a lot while working with me and whom I have tried to guide (not sure the quality of my advice would qualify me for mentorship, though) from a Senior Associate position through to his current role. His professional, social, and personal skills clearly set him apart in our market (and I am very happy that he was very recently recognized at a European level as Regulatory Attorney of the Year). But it is his ethics, together with his desire to improve both the business, professional, and social environment around him, that I believe truly set him apart among the people I know. I am, therefore, very proud of his achievements, both as an attorney and as a person and, even though I can’t take any credit for most of it, I am certain that he will continue to progress.

CEELM: What is the one piece of advice you’d give yourself fresh out of law school?

Buta: Use as much of your for-now-significantly-increased spare time to learn as much as possible about as many different things as possible. It is very likely that you will put almost all of that knowledge to good use later on and, more importantly even, use it as a springboard to widen your perspectives even further.

This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.