At the close of the 19th century, American newspaper editor Horace Greeley exhorted his readership to abandon the teeming cities of America’s North East and to “Go West, young man and grow up with the country.” This exhortation was on my mind a hundred years later, when in 1995 three large suitcases and I left Manhattan for Tashkent. The Berlin Wall had fallen and as a 20th century American pioneer, I was going East to grow up with a lot of countries. To start, I was opening the Uzbek office of a global law firm.
By the time my suitcases and I had completed half of our seventeen hour journey and predictably had parted ways somewhere between our first and third layovers, Greely’s comment seemed less exhortation and more warning. And when I finally arrived sans baggage at the crumbling Soviet era Hotel Uzbekistan, to be handed folded bed sheets and a toilet tissue allotment by the desk clerk, Greely’s exhortation was nothing if not mocking. Only the Donner Party could have understood my despair as I watched the sun rise over the Central Asian steppes through the hotel room’s cracked window and counted toilet tissue squares.
Twenty years on, those early days of post-Soviet Russia and Eastern Europe seem almost mythical. The horse sausage sliders that once were a staple of every Tashkent business opening party have been replaced by foie gras and feuillettes. Foreigners on the streets of Moscow are no longer instantly identifiable by their shoes. There are more shopping centres around Bratislava than in all of New Jersey. Talinn is a regular hen and stag party stopover; Warsaw is considered a culinary capital; and good luck trying to have a leisurely stroll on the Charles Bridge in Prague on a summer afternoon. In a single generation, the East has indeed grown up.
Nowhere is this more evident than in the practice of law. At times leading and at times scrambling to keep up, jurisprudence has nevertheless been a central component of all regional development. In 1995, we lawyers struggled to create terms and conditions for foreign bank subsidiaries in countries where there had historically been only a single national bank. Until then, terms and conditions had been simple … take it or leave it. In 1998, we lawyers tried to settle complex cross border derivatives contracts amidst Russia’s financial meltdown. The Russian civil code said that derivatives contracts were unenforceable as illegal gambling arrangements. (Ironically, in 2008 we discovered that the Russian civil code had been more prescient than we had thought). In 2004, we lawyers created the first Polish securitization funds to acquire bank assets and clear bank balance sheets of non-performing loans. The early Polish loan portfolios were tiny and often secured by such collateral as heads of cattle; this month, however, a major Romanian bank announced the sale of a mortgage loan portfolio with a face value in excess of EUR 2 billion. In 2009, we lawyers tested Slovenia’s insolvency regime with a EUR 1 billion financial restructuring involving 20 domestic and international bank creditors. There were pitched days and sleepless nights. But a successful outcome created a legal and commercial precedent which just this week resulted in the restructuring in record time of the country’s premier beverage manufacturer and distributor. These days, even Canary Wharf bond traders glued to their computer screens know the location and GDP of the Austrian province of Carinthia, as the Hypo Alpe Adria story unfolds across Central and Eastern Europe. With such key questions being raised as whether a sovereign state is obligated to financially support its provinces and municipalities, we lawyers find ourselves again at the centre of the region’s political and commercial evolution.
Deja vu occasionally strikes. On a recent flight from Moscow to Vienna, passengers checked empty suitcases in which to carry home sanctioned goods. I was reminded of my early business trips from the region to London which always ended with a pre-Heathrow suitcase fill at Tesco. But now I more often find myself flying from the region with a full suitcase, brimming with goods as well as market intelligence, commercial proposals, and interesting legal developments. For certain, Horace Greeley captured the zeitgeist, and we lawyers have been fortunate to capture the opportunity.
By Denise Hamer, Partner, DLA Piper International
This Article was originally published in Issue 2.2. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
