“The trend that we discussed at the Round Table back in November is continuing,” says Jiri Sixta, Partner at Glatzova & Co., referring to the upbeat reports on the Czech market provided by members of a November 2016 CEE Legal Matters’ Round Table.
“Only moving up to full speed.” The market is buzzing, Sixta says. “There was almost no Christmas break in Prague, and if deals didn’t close before New Years, then they’re closing now.” Sixta is confident the good fortune is felt equally across the market. “It’s not just my experience,” he says. “It’s everywhere. Everyone has 5 or 6 deals they’re working on. That’s a very good sign, I would say, and almost all areas are booming. Real Estate, Telecom, Industrial deals. It’s everything."
Sixta believes the reason for this recent boom are two-fold. First, he notes, the Czech Republic is simply strong right now, and foreign investors are generally attracted to the market. More significantly, perhaps, are the indications from the Czech National Bank that it may untie the fixed exchange rate between the Czech Crown and the Euro, which has kept the Crown at approximately 27.5 to the Euro. The Bank, Sixta reports, has declared that it will stop buying Euros to maintain this artificial level, and most believe the Czech Crown will naturally, once un-tethered, move to somewhere around 26. The Bank’s earlier indications that it would make this move in late autumn 2017 have been replaced by hints that it may do so as early as March or April. “So if you have euros it’s best to use them now,” Sixta says, “and everyone trying to spend euros is wanting to do so as soon as possible.”
As for legislation, Sixta reports that the country is still dealing with the significant changes to the Public Procurement Act that came into effect last year — “clients,” he says, “are struggling with it.” Otherwise there’s little of significance, Sixta says, noting some minor — “nothing significant” — changes to the country’s Labor Code that are coming in May. In his opinion, “the public procurement changes are more important to major clients.”
There is also an increased consumer protection in the banking sector, Sixta reports, resulting in more flexibility for consumers in respect to mortgages, and more banks requiring assistance. “So it’s a good time to be a lawyer,” Sixta says smiling.
Finally, Sixta reports, elections for the Board of the Czech Bar are coming up this year. Various groups and coalitions are forming, as the current Chairman of the Board has said he won’t serve an additional term. Of some significance is the ongoing attempt by smaller firms and solo practitioners who may view freshly graduating attorneys as competitors to push the concipient period to 5 years from its current 3. Sixta opposes this move, saying “we see them not as competition, but as an opportunity!”, and suggesting that “we’d rather they come to us.” The vote last year to extend the concipient period to the same 5 years it is in neighboring Slovakia was defeated by a slim margin, “with representatives of big firms voting against it.” Sixta says, “we’re hoping we can do it again, to protect our interests in this respect.”