Laszlo Reti, now mid-way through his third term as President of the Budapest Bar Association, takes pride in the ease with which he’s managed both the Bar and his long career as the Managing Partner of the Reti, Antall and Partners Law Firm in Budapest. Both the Bar Association and his law firm, he says, change with the times. In his words, he’s “swimming with the current.”
Reti, whose firm associated with PwC, was first admitted to the Budapest Bar in 1985, well before the end of communism and the subsequent re-privatization of the legal industry. In 1995 his firm tied up with Stikeman Elliot. That relationship ended when the Canadian firm withdrew from Hungary in 1999, and a year later Reti’s firm tied up with PwC, and has been in “close cooperation” with the Big Four stalwart since.
Reti notes that despite being a member of the PwC network, he and his partners retain full ownership of the firm. Indeed, he says, “I’ve never been as free as I have the past 17 years. My independence and integrity is absolute,” he says, “because PwC wouldn’t even think of taking it away or hindering.” He emphasizes the point: “I have never been instructed to do anything. The only thing is, we can’t work for PWC-audited clients, for conflict reasons.”
Despite starting with the Bar association in 1982 as Santa Claus in its Christmas celebrations, Reti says, he wasn’t particularly active until 2006. “And then I became the President,” he laughs, reporting that he was elected “as a kind of third party candidate as I was not a member of the leadership at the time.” He smiles at the memory, reminiscing that he was “elected off the streets.”
With 53% of the over 13,000 members of the Hungarian Bar Association (“and maybe even more of the financial strength,” Reti notes), the Budapest Bar Association is by far the largest of the 20 county-based local bar associations that make up the national Bar.
“We are the first instance body for registration and first instance for disciplinary procedures.” The Budapest Bar is, Reti explains, the primary service body for lawyers. The Hungarian Bar, by contrast, “is the main regulatory body. But there aren’t many regulations.”
Indeed, Reti says confidently, the Budapest and Hungarian Bars suffer from few of the conflicts and controversies that sometimes plague neighboring countries. “It’s very boring here – things run pretty smoothly.” Instead, he says the main issues he faces are the same as everywhere else: “Digitalization. The future of generalists and solo practitioners. How will we react to commoditization and robotization? How will the state react? How can we serve our clients?”
When asked if the Bar is experiencing any conflicts with the State in these controversial times, Reti rolls his eyes. “We are not so important. Of course there are individual lawyers who are involved in challenges against the State for one reason or another, and we will of course protect our members if they are arrested.” He pauses. “If they are arrested,” he repeats, smiling at the concept. “We are not Turkey. If you want to be arrested, you have to work very hard here.” He later clarifies out of a concern that even his joke might be misleading: “We cannot imagine that a lawyer might be arrested for political reasons here.”
The Budapest Bar, Reti insists, has traditionally not been a very stringent or demanding organization, and he notes that “direct political control over the legal profession faded away in the 1980s, and the Ministry of Justice since then has been more focused on protecting the interests of the profession than controlling them.” The regime since the change “has reflected the approach of the pre-Communist regulatory regime: there are no artificial bars to joining the Bar, and both the Hungarian Bar Association and the regional associations, such as the Budapest Bar Association, enjoy a great degree of regulatory freedom.”
The future may be different, however, and Reti says the current system may not last long. “It’s sort of the dying light of day, as things are changing,” he says. “A traditional bar association has two basic functions: issuing licenses to practice law (registration) and taking away licenses, as a disciplinary measure. I believe that now we must give more to our membership in the form of technical support, bulk procurements, as we are in a better position to negotiate with suppliers, etc. In this sense, we must change the 19th century approach of how a bar association works and adapt to the changing times.”
And Reti notes with a sigh the increasing demands the state makes of its lawyers to share kinds of information once considered absolutely confidential. “Anti-money laundering requirements was the first time we were obliged to report things that had previously been privileged,” Reti says, saying that when that demand first came, “it was unbelievable.” Such demands are increasing. “Now tax information. And the ‘curious’ state wants ever-more information from us. We have to change or we will lose our clients.” Reti says, “so we are at the border now.”
Although some forms of law firm advertising and marketing are certainly allowed under the Budapest Bar, it has what he calls “a conservative approach with respect to the approval of advertisements.” Reti, who calls himself “the first instance of discipline” of offending advertisements, defends that conservatism. “A minimum of dignity is expected. And it must be fair according to the advertising principles.”
Unsurprisingly, the definition of “dignity” and “fairness” in the law firm advertising context can be subjective. In explaining that the Bar Association precludes firms from identifying clients in any public statement or announcement, Reti notes that 90% of the members are sole practitioners. On the other hand, he claims to be less conservative than some regarding other advertising questions: “I have no problems with billboards,” he says, as an example. “Some of my colleagues and deputies do, but I don’t.”
Finally, Reti turns to the subject of the highly anticipated new Hungarian Act on the Legal Profession, which is currently being prepared for submission to Parliament in draft form for enactment and entry into force on January 1, 2018. He’s looking forward to the Act, which he says reflects a “very amicable cooperation with the Hungarian Ministry of Justice,” following its invitation to the Bar Association to participate in its creation. The big change, according to Reti, will be the integration of in-house counsel into the Bar for the first time. He is aware that many in-house counsel worry that they’ll be overwhelmed by the lawyers in private practice and see their concerns ignored or minimized, but he dismisses the possibility. “They don’t know us,” he says, smiling.
Reti emphasizes that the idea for the integration was initiated by the Ministry of Justice and not the Bar Association. “This is very important: this was not our idea. We never initiated this. The government would like to see a simple, transparent organization where everyone is registered. They would like to see some quality control.” Still, he says, “I am very happy about this. I am absolutely happy. I don’t want to work with an unhappy group. I want to see a win-win. If this is a step forward for everybody, then yes. If this is torture for anybody, then no thank you. We could even do just registration with no disciplinary power. Or in-house counsel could get a self-governance body within the Bar Association. Whatever they want, the Budapest Bar is happy.”
Happy he may be, but Reti, who’s turning 60 this year, may not be around much longer to evaluate the ultimate success of the integration, as he says he doesn’t know yet whether he’ll run for a fourth term. He smiles one last time. “We’ll have to see.”
This Article was originally published in Issue 4.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.