Across the CEE region, uncertainty was the watchword throughout 2022, and the pattern looks set to continue. Although independent firms remain well placed to make the most of booming practice areas, the ongoing conflict in the region, coupled with the lingering effects of the Covid-19 pandemic, has resulted in a volatile market.
In the Czech Republic, exorbitant oil and gas prices have hit businesses hard, and, although this did not cause an immediate drop in regular financing transactions, state and EU intervention is anticipated in 2023. Despite the strong start to 2022 and hopes of post-pandemic recovery across the board, the macro-economic challenges in the second half of the year have left a much emptier pipeline for law firms, with many major stakeholders waiting to see what unfolds. The domestic real estate market, meanwhile, is seeing stagnation following the overheating of real estate prices in the last few years, while current inflation means there are cumbersome restrictions on mortgages.
The start of 2022 saw an increase in cross-border M&A, characteristic of the period of frenzy which followed the lifting of Covid-19 restrictions. However, the advent of the war in Ukraine left many deals incomplete due to price mismatches. Those that are successfully closing typically show high complexity and value. Investors are reportedly apprehensive, with those based in the US viewing the region as precariously close to Ukraine. The shortage of capital has impacted most sectors, although technology-related M&A remains on the rise, in keeping with the wider technology boom across the entire region. Looking ahead, the implementation of the Digital Markets Act – aimed at establishing fair play rules for major digital companies by applying antitrust law principles to digital markets – is hotly anticipated.
Over in Serbia, 2022 shaped up to be ‘one of the best years for M&A’, according to Miloš Vučković, a senior partner at Karanovic & Partners. The outlook for 2023 is consequently optimistic, with predictions that it will be even busier than the previous year, despite the looming threat of sudden changes presented by the conflict in Ukraine. Although the turbulent situation makes rapid shifts a constant possibility, the nimbleness of independent firms ensures that, even if there were to be a slowdown in transactional work, they would be well placed to act on the consequent uptick in disputes and restructuring mandates. Practitioners such as Vučković therefore anticipate an active period ahead. More broadly, however, a major challenge has become ensuring the job satisfaction of junior lawyers, since competition is longer limited to other firms, but has expanded to cover banks, the Big Four, and other leading companies recruiting in-house lawyers.
Austrian firms, likewise, saw a pick-up in transactional work in 2022, and also predict that the number of deals in the market will remain robust in the face of external pressures. In keeping with jurisdictions across the region, pandemic-related work decreased throughout the latter half of 2022, only to be replaced by conflict-driven mandates. Encapsulating the mercurial nature of the market, and the adaptability of independent outfits, Andrea Gritsch, managing partner at Wolf Theiss, comments that ‘firms have to be resilient on the one hand, while at the same time remaining ready to seize opportunities lying ahead’.
Financing in the ESG space has begun to capture the Austrian market of late, as have capital markets and private equity mandates in the start-up space. The jurisdiction has also seen an increase in regulatory work across the banking and insurance sectors, as well as public procurement matters in the IT and media fields. Due to the volatile situation in the gas market, provision of restructuring advice in the energy sector has likewise emerged as an active area.
‘Firms have to be resilient on the one hand, while at the same time remaining ready to seize opportunities lying ahead.’ Andrea Gritsch, Wolf Theiss
A common theme uniting legal markets throughout the CEE region is the rapid emergence of sustainability and technology as dominant drivers of activity across the board. Poland is no different, and in the financing, construction, transactional, disputes and tax spaces, a significant proportion of mandates now have a nexus to the renewable energy field. More specifically, for projects-focused practitioners, offshore wind and photovoltaic developments, already long established as the major areas of interest for international investors, have become key targets for state-owned enterprises.
Even more than renewable energy, technology has come to undergird work in every major practice area. Most obviously, TMT lawyers have been grappling with an ever-growing roster of novel matters, with the metaverse and AI proving to be particularly hot topics of late. As technology has become so pervasive, firms have increasingly found themselves under dual sources of pressure: full-service outfits have felt a greater need to shore up their specific expertise; while boutiques have seen a need to expand beyond their niche offering.
As a direct consequence of this, in January 2023 the Polish market saw its first major merger between two highly regarded independent firms, namely Rymarz Zdort and TMT-focused Maruta Wachta; the resultant entity, Rymarz Zdort Maruta, is now led jointly by Paweł Zdort and Paweł Rymarz, and Marcin Maruta. The driving force for the headline-grabbing move was neatly encapsulated by Zdort, who says: ‘If you want to really service the upper quartile of the market, this breadth and depth is the only way.’
Following on from the tumult of 2022, the market continues to present a changeable face, with rapid expansion in certain sectors matched by uncertainty and hesitancy elsewhere. For independent firms, though, a natural agility means that pivoting to boom areas is always an option. Practitioners across the CEE region are looking ahead with confidence, ready to make the most of the coming period. LB
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| Rank (by Legal 500 ranking) | Firm name | Region | Total lawyers | Total partners | Promotions | Offices | Partner hires |
|---|---|---|---|---|---|---|---|
| 2 | Wolf Theiss | CEE | 211 | 76 | 3 | 13 | 2 |
| 6 | Schoenherr* | CEE | 358 | 80 | 14 | 15 | 2 |
| 17 | Kinstellar | CEE | 350 | 39 | 2 | 12 | 1 |
| 27 | Cerha Hempel | CEE | 200 | 49 | 3 | 6 | 1 |
| 44 | Dorda | CEE | 49 | 22 | 1 | 1 | 1 |
| 57 | Rymarz Zdort Maruta | CEE | 63 | 21 | 2 | 1 | 1 |
| 61 | Binder Grösswang | CEE | 100 | 27 | 2 | 2 | 1 |
| 69 | Karanovic & Partners | CEE | 111 | 31 | 1 | 1 | |
| 100 | KNOETZL | CEE | 23 | 10 | 1 |
* Data for Schoenherr is estimated FTE for the fiscal year 2022/23.