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Who knows more about lawyers than other lawyers? In the Face-to-Face feature, we step back and allow private practitioners to sit down directly with in-house counsel to discuss their challenges, strategies, and solutions. 

ODI Law Firm Partner Matjaz Jan interviews Miha Ursic, the General Counsel of HIT d.d. in Slovenia for CEE Legal Matters’ Face-to-Face.

Even though we have not yet reached the speed of light, the future is almost here.

In a challenging economy, in-house lawyers face higher expectations from their clients. On one hand, legal costs are usually seen by businesses as a strong candidate for potential savings. With that in mind, in-house counsels must navigate budget limitations through different measures, including curbing external spend.

After the failed military coup in Turkey on July 15th, 2016, The Council of Ministers of Turkey declared a State of Emergency (SoE) in the country. This article focuses on the position of a GC when suddenly confronted with a SoE, needing to ensure the transformation of the company to ensure compliance with the SoE regime. 

Changes: Politics and Economy

Our world is changing in front of our eyes. The political situation seems to those of us living in developed countries as experiencing the most rapid changes since the fall of communism.

Regulating an effective budget for a legal department is a major strategic decision that must be considered by companies and their legal counsel.

Legal fees are a necessary business expense in every company. The eternal feud between the legal and the financial departments in regard to the “unnecessary” external legal expenses seems to be the daily bread of every general counsel. The fragile beauty of all legal issues is that they parade as “unimportant and deferable” at first sight and to the untrained eye; but the reality of all parties and state authorities involved may be completely different. 

Reflecting upon my career, I cannot remember a single employer who did not propose “let’s increase income and cut down expenses.” Yeah! And that always reminds me of the joke when the Bear complained to the Fox, a Consultant, about the problems caused by his size: He was difficult to feed, in need of a big house, and in constant danger as everyone wanted his fur. The Fox told him: “You should become a mouse. They eat little, can live in any hole, and have very few enemies.” The Bear was happy, but puzzled: “How do I become a Mouse?” And the Fox replied: “I am a Consultant. I can tell you what you need to do, not how to get there.” 

For those who are part of a legal department of 20 in-house lawyers or more, are regularly invited by their Managing Director/CEO for breakfast (to speak about the weather and soccer results), and for whom workload and cost pressure are foreign concepts, there is no need to read further. For all others, welcome to the In-house Club: A club of increased pressure and an increased workload with an increased scope of duties and scarce resources and budget. Welcome to the world of, as Richard Buckminster Fuller put it, “To do more and more with less and less until eventually you can do everything with nothing.” 

In addition to hiring employees with appropriate education/work experience, finding employees with profiles indicating that they will be a good match for your legal team is a crucial factor in successful HR management and employee career development.  

Growing has never been easy. Think about your childhood, when during the night, you would feel pain in your legs without really understanding they were growing pains. The same thing happens when you start the journey of developing an in-house legal team. The key question is: How can we experience the growth together and start running towards to same goals as one unified team?

The First Two: The Setup

It’s not the equivalent of announcing the discovery of a distant land to say there are two basic approaches in setting up an in-house legal function. The first is a more generalist approach, which works perfectly in companies which do not require very deep professional expertise in a particular area of practice on regular basis. Instead they require broad legal expertise across various areas. 

Introduction

External counsel play an important role to an organization, when engaged. The value of their contribution depends upon their experience and expertise. Therefore, selection of external counsel needs to be done carefully. Their engagement in itself is not enough. Once selected, constant interaction with them is necessary to evaluate their performance. In this article, an attempt has been made to articulate how external counsel can be employed to the utmost benefit of an organization. 

After working for over ten years in a large international law firm in the United States and another six years in an in-house capacity in Austria I have come to the conclusion that the team you create is the key to your success as a leader. No matter how smart, talented, driven or passionate you may be as a general counsel, the success of your legal department depends in a large part to a strong and motivated team that works well together in accomplishing the tasks and goals that come along.

Selecting a law firm seems easy: For large transactions, you choose large international law firms. For less important cases, you may opt for smaller, specialized firms. However, assessing their work may be more difficult. 

Throughout my career I have worked at small legal departments (and by that I mean departments with fewer than five people – small at least by Greek standards). They have their own characteristics and challenges. In my experience, they tend to rely heavily on the advice of external counsel, who often becomes a true partner of the in-house attorneys. This reliance becomes more pronounced when in-house counsel has to manage tasks across different jurisdictions. In those cases, engaging external counsel becomes indispensable. 

Nowadays, in many countries, the demand for legal outsourcing is increasing in response to the rapid development of certain business activities, and the necessity to hire an external consultant can arise in a company of any scale, status, and activity, whether an in-house lawyer is present or not.

The process of selecting external counsels is quite a challenge to management of an-house legal department and poses unavoidable risks. It has an important effect on the department’s relations with its internal clients and with executive management team members. It is a pity that in some cases this picture may be explained as “The cobbler’s children have no shoes.” The risks inherent in selecting external counsel may in the worst case trigger the chief legal counsel’s professional liability and even directors and officer’s liability when not managed and regulated properly. Accordingly, it is essential to review the specific terms to be applied while selecting the External Counsels (ECs). It is essential to perform conflict checks, review the EC’s market expertise, and analyze the EC’s relation with public authorities when selecting an EC, as is setting out key performance indicators in legal services agreements.  

You load the picture from your recent gathering of friends on Facebook. Immediately, and by itself, the website defines all the persons who are in the photo: surnames, age, habits, personal life. Everything is in the social network.

As it is widely known, the General Data Protection Regulation (216/679 (EU)) (GDPR) was announced on April 27, 2016 and will be applicable as of May 25, 2018. Simultaneously the 95/46 EC directive (the “Directive”) will be set aside. Although the GDPR’s main concepts and principles are much the same as those of the Directive and thus the national data protection acts, the GDPR does prescribe certain new obligations (such as the DPO, the right to data portability, etc.) and a much higher limit of fines, suggesting that privacy will be taken more seriously in the future. 

As personal data privacy is increasingly considered an important human right deserving protection, and with the new EU Data Protection Regulation to become enforceable in Romania as of May 25, 2018, it is becoming more and more important for corporations not only to observe the general data protection rules on commercial transactions but also to ensure full internal legal and technical compliance for all employees having access to any personal data processed internally. 

In a world where technological innovation grows so fast, a need to transform banking services from the classic model in which the client’s presence is required in the bank’s premises leads us to the new form of selling of the classic bank’s products.

“Software is eating the world,” observed entrepreneur and Hewlett Packard Enterprise Board member Marc Anderssen in his influential Wall Street Journal essay half a decade ago. Software’s appetite still seems insatiable as it continues to digitize bigger and bigger chunks of our analogue world. Hybrid cloud and edge computing, photonics and persistent memory, virtual and augmented reality, and artificial intelligence (AI) are the innovations that will harness the digital imprint of our reality for our benefit.

On June 20, 2017, CEELM reported that mBank sold its majority shares in housing project company mLocum to another housing company called Archicom S.A. in Poland. We reached out to Monika Powroznik, Deputy Director for mBank, to enquire about the cooperation with her external counsel on this specific sale.

On December 7th, 2016, CEE Legal Matters reported that AmRest Holdings had acquired 15 KFC restaurants and the license to operate and develop the KFC brand in Germany. We invited Dawid Ksiazcziak, Chief Legal officer for AmRest Holdings, to reflect on the KFC acquisitions.

On June 2, 2017, CEE Legal Matters reported that regional used car dealership AAA Auto International had negotiated the refinancing of the acquisition of its entire group from CSOB. Jan Siroky, Senior Lawyer for AAA Auto International, agreed to comment on the deal.

On May 3, 2017, CEE Legal Matters reported that facility management company Mundus Services – a joint venture of EMPower Capital and KJK Capital – had acquired engineering solutions and services company VM Automation from VM Finance Group in Bulgaria. Stanislav Nikolaev, Operating Partner for EMPower Capital, agreed to answer our questions about the deal.

On November 18, 2016, CEE Legal Matters reported that Eesti Energia AS had issued EUR 500 million bonds, which were listed on London Stock Exchange. We reached out to Ivar Kurvits, who acted as the General Counsel at Eesti Energia at the time of the transaction (he is currently General Counsel at AS Inbank), to comment on the deal.

On March 13, 2017, CEELM reported that Arcus Infrastructure Partners, an independent fund manager specializing in European infrastructure, had acquired an 85% stake in Gdansk Transport Company S.A., established to work on AmberOne A1 motorway concession in Poland. We invited Toby Smith, the General Counsel for Arcus Infrastructure Partners, to share his thoughts on the company’s first transaction in Poland.

On January 18, 2017, CEELM reported that CBRE Global Investors had sold its significant CEE retail portfolio to the CPI Property Group. On April 12th, we published an interview with the General Counsel at CPI, and now we present the perspective of Roland Bebcak, the Head of Divestments CEE at CBRE Global Investors.

On January 18, 2017, CEELM reported that CPI Property Group had acquired a high quality retail portfolio, including 11 shopping centers across CEE, from CBRE Global Investors. As soon as the transaction was closed on March 29, 2017, Martin Matula, the General Counsel at CPI Property Group, agreed to share his thoughts on the deal with us.*

On February 16, 2017, CEELM reported that GTC Real Estate Development had sold the Sasad Resort, an almost-completed residential project in Budapest, to Futureal, the largest real estate developer in Hungary. We reached out to Viktoria Molnar, Legal Counsel at GTC Hungary, for information about the deal.

On February 6th, 2017, CEELM reported that Ellex had advised AS Eesti Loto, the Estonian operator of the Bingo Loto, Keno Loto, Viking Loto, and Eurojackpot, on the recent completion of a procurement procedure in order to set up a new internal central information system designed to last for seven years. Heiki Kranich, the Chairman of the Management Board at AS Eesti Loto, agreed to explain how the procurement system was designed.

On January 13th, 2017, CEELM reported that Skanska had handed over its Nordic Light office complex in Budapest to Erste Alapkezelo Zrt. We invited Gabriella Delcsev, the Legal Manager at Skanska Hungary, to describe her team's work on the divestment.  

On December 9, 2016, CEELM reported that A&D Pharma Group acquired 78 pharmacies from Sibpharmamed in Romania. We invited Mihaela Scarlatescu, Head of Legal and Compliance at A&D Pharma, to explain how the transaction was realized.

On February 3rd, 2017, CEELM reported that the Estonian Supreme Court ruled in favor of If P&C Insurance’s claims regarding professional liability involving a construction project for Skanska AS. We reached out to Heinar Olak, the Head of Legal at If P&C, to clarify the grounds of the dispute and its finale.

On December 20th, 2016, CEE Legal Matters reported that the Slovenian metal-processing company UNIOR had completed a syndicated debt refinancing process with a group of six banks. We interviewed Darko Hrastnik, the Chairman of the Board and CEO at UNIOR, who was directly responsible for handling the transaction and managing the external counsel.

On December 19, 2016, CEELM reported that the United States's W.P. Carey Inc. had acquired a logistics center in Lithuania and signed a long-term lease with Kesko Senukai. Ziad Hammodi, Managing Director and Chief Global Transaction Counsel at W.P. Carey, agreed to comment on the deal.

On December 20, 2016, CEELM reported that Inter Cars, an importer and distributer of automotive spare parts in CEE, obtained a loan facility from a consortium of banks. Jacek Piotrowiak, the General Counsel at Inter Cars, kindly agreed to share his experience managing the legal aspects of the deal.

On November 29, 2016, CEELM reported that the Mareshki Medicines retail chain had been successful in the two-year litigation at the Supreme Administrative Court of Bulgaria, which resulted in the repeal of anti-competitive provisions on prescribing and dispensing medicine in Bulgaria's Ordinance No 4. We asked Irena Georgieva, In-house Attorney at Mareshki, to explain what happened.

On November 17, 2016, CEELM reported on the merger of two shopping malls in Romania – Bucuresti Mall and Plaza Mall – owned and operated by the real estate and development company Anchor Group. We reached out to Mihaela Marin, the Head of Legal Department at Anchor Group, who agreed to elaborate on the merger.

On October 28, 2016, CEELM reported that P3, a leading pan-European owner, developer and manager of logistics properties, had announced that it had completed a EUR 1.4 billion long-term refinancing, arranged with a group of leading international financial institutions. We invited Katie Schoultz, the Group General Counsel at P3, to share her thoughts on the deal.

On October 14, 2016, CEE Legal Matters reported that the Norwegian property company Linstow AS had sold its stake in UAB Baltijos Parkai, the holder of Park Inn hotels in Lithuania, to UAB Green Hotel. We reached out to Knut Loken, the Chief Investment Officer at Linstow, for more information on the sale.

On November 24, 2017, CEELM reported that Austrian real estate developer WM Group had sold its six retail parks in Slovakia to Immofinanz AG, designed to expand the latter's STOP SHOP brand. Michael Wakolbinger, Managing Director of WM Slovakia, who also acts as a General Counsel to the senior owner of the WM/MID Group, agreed to comment on the sale.

On November 28, 2016, CEELM reported that the Bulgarian electricity power distributor Energo-Pro Varna EAD had sold seven-year bonds worth of EUR 130 million to international investors. We invited Tsvetanka Vasileva, Head of Legal and Compliance at Balkan Advisory Company to provide us an insider’s view on the matter.

On October 11, 2017, CEELM reported that UAB Bite Lietuva had received a license from the Bank of Lithuania to operate as an electronic money institution. Jurgita Pelediene, the Legal Manager at Bite Lietuva, agreed to answer our questions on the procedure.

On October 31, 2016, CEELM reported that the Ukranian start-up eTachki had obtained USD 1 million investment from local capital fund TA Ventures. We asked the Head of Legal at eTachki, Marina Makarova, to tell us more about the deal and the structure of her in-house legal team.