An "exciting election” has marked the Austrian market over the last few months, according to Alexander Petsche, Managing Partner of Baker & McKenzie in Vienna. “We had an election of the President of the Federal Republic that was annulled recently by the Constitutional Court due to formalistic misbehavior during the election process,” Petsche explained.
According to Petsche, Austria allows voting by post and the two issues raised before the Constitutional Court were that the members of the committee responsible for counting these "votes by letter” started the counting process too early (the Baker & McKenzie Partner pointed out that there are several rules in place as to when the letters should be opened and when the counting should commence), and that, in some regions, not all the members of the committee were present when the counting started. “It was a very large trial with over 90 witnesses being heard. It has never happened that an election of a President was challenged and, while the court found no evidence of manipulation, it did argue that theoretically it could have happened, which was sufficient to annul the election.”
Staying within the political realm, Petsche pointed out that Austria has a new Chancellor, as the previous one has stepped down “mainly due to the failure of the left wing party to have a successful presidential candidate.” The new Chancellor was described by Petsche as a “typical manager,” who acted as the CEO of Austrian Railways in the past. This change has brought forth a “New Deal” that has some legal impact: it mainly aims to make it easier for companies to be set up in the country. At the moment, Petsche explained, the foundation of a new company is “very complicated in Austria” and the goal is to lessen the amount of red tape. This initiative is also going to be complemented by “a start-up initiative, with more than EUR 185 million put aside towards supporting start-ups.”
Turning to legal industry, Petsche noted an increase in the amount of investment arbitrations taking place in Vienna involving CEE countries. As a Board Member of the International Arbitral Centre of the Austrian Federal Economic Chamber, Petsche mentioned that the arbitration function of the organization has been considerably busier in the recent period.
Speaking about the legal market, Petsche highlighted two developments. The first is an increasing number of boutique firms opening in the country: “Ten years ago no one would have left a large firm as a Senior Partner — you just made your career and would have been in a position to maintain that. I assume it primarily relates to either a matter of decision making within law firms or to the fact that sometimes senior lawyers do not want to invest part of their time on administering a firm. From our perspective, they don’t necessarily pose a threat as they work in a different segment." The second development was that of PwC Legal’s entrance into the Austrian market on July 1, with Petsche noting that, surprisingly, it wasn’t PwC Austria that initiated it but rather PwC Legal Germany that expanded into the country. He described PwC Legal Germany as a very strong player in Germany and its arrival in Vienna means that KPMG is the only of the Big 4 without a law firm arm in Austria.
In “The Buzz” we interview experts on the legal industry living and working in Central and Eastern Europe to find out what’s happening in the region and what legislative/professional/cultural trends and developments they’re following closely.
