Over the course of our seven years, CEE Legal Matters has interviewed most of the British lawyers working on the ground in Central and Eastern Europe as part of our recurring “Expat on the Market” feature. We reached out to them recently and asked them to bring us up to speed on what they’re doing and/or share their thoughts on the ramifications of Brexit or the ongoing COVID-19 crisis.
How has Brexit impacted your practice, if at all?
Christian Blatchford, General Counsel, Energo-Pro (in the Czech Republic): Well, Brexit might just destroy my practice. Lawyers qualified in England and Wales (and other parts of the UK) who are now practicing law in the Czech Republic on the basis of the EU Withdrawal Agreement and a specific Czech law on Brexit will lose that right from January 1, 2021, unless the UK and EU agree otherwise. This now seems unlikely, given the shortness of time and relativity niche market involved. The Czech Law on Advocacy does, however, permit those who have been practicing here for at least three years to apply for admission to the Czech Bar. The catch? You have to have been providing Czech law advice during that time. But how, you may ask, would that have been possible as a UK-qualified lawyer? The solution to this additional problem is that a three-person panel from the Czech Bar Association could, based on an interview, waive the requirement in whole or part if the applicant demonstrates a sufficient knowledge of Czech law and professional rules. What is that standard? As I write this, I have no idea!
Nick Fletcher, Partner, Clifford Chance (Poland): No significant impact. English law remains as popular as ever for any complex commercial transaction with a cross-border component. Perhaps greater reluctance to use English courts so more use of international arbitration. On a personal level, Brexit has led me to obtain Polish citizenship, which I have had for nearly two years now.
Virginia Murray, Partner, Watson Farley & Williams (Greece): As a qualified Greek lawyer, Brexit affects me less on a professional basis as most of my work concerns Greek energy and infrastructure projects. I do however see an increasing willingness of international investors to transact with Greek-law governed acquisition and financing agreements, drafted in English. Brexit has of course affected all of us practicing English law; we see a concern about using English law and courts for international contracts with regards to enforceability and recognition of judgments. In terms of influence on international regulations, in the energy sector and elsewhere, I see that Britain has lost significant ground as it withdraws from Europe.
On a wider level, I am particularly worried about the many bright young Greeks who are studying law in the UK, and how their degrees and professional qualifications will be recognized when they return to their homeland, and what the increase in university fees for EU students will mean for the loss of talent and diversity in Britain’s universities. Personally, I have taken the precaution of finally applying for Greek citizenship (after nearly 24 years’ residence).
How has COVID-19 impacted your practice in CEE?
Graham Conlon, Partner, CMS (Ukraine): I personally have remained just as busy in the last six months as I was prior to the crisis, working on deals throughout the region and beyond. The pipeline also remains positive, and – touch wood – it will remain that way. But the nature of the deals has changed. Some clients who might have found it difficult to exit investments a year ago (because everyone was worried that a financial crisis might be on its way, and with buyers not knowing how to price that in) have all a sudden found themselves sitting on gold-mines, with targets shooting-up in value. This is especially the case with respect to those in the e-commerce and logistics space. Others have not been so lucky, and we are starting to see some assets come to market in more distressed circumstances. The international financial institutions (such as the EBRD) have also become more active in crisis times – so that is also a source of M&A deal activity in all sorts of countries around.
We closed our offices on March 16 and only re-opened on October 1. We worked remotely. However, COVID-19 brought us closer together as a team because our firm is based on a highly personal and friendly relationship between everyone, and working from a distance is no substitute. Every week we had a Zoom phone call and they were fun. We talked openly about our firm and we realized how much we were all one family.
Second, it gave us all time to think about how a post-COVID-19 law firm would operate and how we would look after our clients and work together. Clearly personal meetings face to face with clients were going to be rare and everything was going to move more to an electronic interface. Our marketing strategy evolved substantially. When times are tough, you must adapt – be pro-active or go backwards.
Nobody left the firm. Our motto is “No matter what the work situation we always want the best lawyers.” So, we hired!
Finally, as the IFI’s have pumped money into our region post COVID-19 to help their clients, we have had a successful year to date.
Christopher Noblet, Partner, Hogan Lovells (Hungary): COVID-19 has certainly impacted our practice, both with regards to the support needed by our clients and how we carry on our business.
As regards to clients, this was particularly marked in March and April where many experienced the challenges of operating businesses amid the various restrictions from social distancing to travel restrictions. It appears with the renewed increase in cases, companies are again having to look at similar issues and how to deal with them, although with an increased level of preparedness compared to the spring.
In respect of our own business, we have, since March, seen the changes that working from home has brought to our operations and how it is possible to keep contact with all our colleagues through electronic means. We have also seen, increasingly, how technology can assist in matters which people previously were certain could only be done face to face, such as remote closings and the like. Of course, we miss the personal contact.
Dan Cocker, Partner, Allen & Overy (Poland): Almost the first I heard of COVID-19 was when I received requests for advice on force majeure notices. A major part of my practice is projects, energy, and infrastructure. In the early days of COVID-19 project developers and lenders asked us for advice on whether contractors could effectively claim force majeure for supply chain issues, for example in China.
The next new stream of work was liquidity facilities. Our international financial institution and commercial bank clients have been very quick and effective in supporting their clients with liquidity facilities. For example, we acted for the EBRD on its first Covid19-related Solidarity Package project in Poland and for the ADB and the EBRD on liquidity facilities for an Armenian energy sector client.
In the meantime, other major transactions in the energy and infrastructure sectors have continued. There’s a strong pipeline of new projects across the CEE region. We and our clients have had to learn some new ways of working. Locking all of the parties in a meeting room until the transaction documents are finalized no longer happens. But project finance has always been about overcoming obstacles to get the deal done. COVID-19 is another obstacle that, together, we will overcome.
Simon Dayes, Partner, Dentons (Romania): COVID-19 has had an enormous adverse impact on many businesses. The pandemic is providing our specialist financial restructuring teams with mandates that would not otherwise have existed. We have been supporting banks and sponsors in managing their relationships during the loan payment moratoria in CEE, and preparing for the end dates of these moratoria which are fast coming towards us. While the focus has been on positive restructurings during these last few months, the indications are that problems will emerge that will result in more post-insolvency activity as we get into 2021.
On the personal side, new working practices (and technology) often brings our colleagues in international offices closer together these days; we speak, and even see each other, more frequently. It is different within the office, and we give more thought now to keeping news, know-how, and culture circulating around the team as they work from home. We also make a point of getting together once a week, typically in a more informal context, to swap stories and plan.
Nick Fletcher, Partner, Clifford Chance (Poland): I am sure my experience is the same as everyone else’s, in terms of working practice, very limited travel, and very few physical meetings. In terms of types of work, a lot of interest in infrastructure (e.g., windfarms and photovoltaic projects) and tech. Oh, and a noticeable increase in client fatigue with multiple briefings on the obvious issues arising out of the virus.
Hugh Owen, Go2 Law (Slovakia): I have already been working from home for three years, so in one sense there has not really been any impact. I had already decided to take a step back from travelling so much, so in a way having everyone quickly get used to doing deals online without unnecessary travel, and without locking everyone in those horrible all-nighters, was a welcome change. Obviously, you lose a lot from not having personal negotiations, but we are still able to do pretty much the same job through virtual meetings. I have not had any negotiations in any sense fail because they were conducted online. If anything, things get done quicker because there seems to be a subconscious reluctance to sit online all night. The timings of calls are more structured, and people do actually have a home to go to – they are frequently sitting in them.
Otherwise, the deal flow temporarily paused for a month or two, but in the end the deals are still being done, just in different sectors. I can’t personally claim to have a crystal ball on this (yet), but obviously not all businesses suffer from current conditions – some even benefit – and there is plenty of that proverbial dry powder still waiting to be spent.”
Are there any significant career updates you’d like to share with us?
Doran Doeh, Arbitrator, 36 Stone (England): What a great interview, in the June 2014 issue! At the time I was a Senior Partner in Dentons Moscow and at one of the highest points in my career. It continued going from strength to strength, including some of the biggest oil and gas M&A deals in Russia in 2015 and 2016.
However, by March 2019 it was time to retire, and I made three big changes. I moved back to London, reverted to my original profession as a barrister, and joined a distinguished set of chambers – 36 Stone – as an arbitrator. In the intervening time, I developed my international arbitration practice, including qualification as a Fellow of the Chartered Institute of Arbitrators.
Despite COVID-19, international arbitration remains an exciting practice area, with rapid adaptation currently taking place to embrace the technology. Russia/CIS and the international oil and gas industry remain at the focus of many of the largest arbitrations. My chambers is based in London and Singapore, so I am well-placed for appointments – and the clerking team is excellent!