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Local Roots and Regional Reach: The Difference a Decade Made for Austrian Firms

Local Roots and Regional Reach: The Difference a Decade Made for Austrian Firms

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A decade ago, Austrian law firms stood out in terms of their regional presence in CEE. Wolf Theiss Partner Claus Schneider and CMS Managing Partner Johannes Juranek share insights into the growth trajectory of these regional law firms and the current landscape of the Austrian legal market.

Ten Years Ago, Today

In the past, according to Schneider and Juranek, Austrian law firms saw particular prospects and likely advantages linked to the expansion. “The Austrian legal landscape was once fragmented, but law firms recognized the need for expansion to provide better legal services to clients,” Juranek says. “A decade ago, the main focus was on corporate and commercial mandates, specifically M&A and real estate,” he notes, adding that the cross-border transactions and demand from domestic and international clients led “many firms to expand into the CEE region and Europe/Asia.”

“The CEE/SEE region has – already starting in the early 1990s – been a focus geography for law firms like ours given the growing investor interest attracting many big international players,” Schneider adds. “Backed by the enlargement of the EU in the early 2000s, GDP growth was expected in most CEE countries due to stable and rapidly growing economies, strong appetite for TMT, real estate, consumer and energy targets, and a strong M&A market.”

Schneider also highlights that, “in the aftermath of the financial crisis, the Austrian-based banking group Hypo Alpe Adria was nationalized, it returned its banking license, its operations were wound down, and its assets were eventually realized. In this context, a great many Austrian (and foreign) law firms were busy advising the nationalized Hypo banks and its legal successor Heta Asset Resolution, as well as a multitude of counterparties including creditors and interested acquirers of ex-Hypo assets.” According to him, Wolf Theiss was involved, “advising, among others, with the biggest creditor group in the restructuring of its claims against Heta,” advising “international investors such as US private equity fund Advent International and the EBRD in the acquisition of the Austrian banking holding, six network banks, and three leasing companies in Croatia, Slovenia, Serbia, Bosnia, and Montenegro with a balance sheet total of EUR 8.4 billion,” as well as advising “the DDM Group, a multinational investor and manager of distressed assets, together with B2Holding, a leading player in debt purchase and debt collection, on purchasing a portfolio of distressed assets in Croatia from Heta Asset Resolution and its Croatian affiliates with a total face value of EUR 800 million.”

Consequently, Schneider says, “ten years ago, Wolf Theiss opened its Warsaw office because Poland was a major market then and, of course, still has great potential now. After the firm’s headquarters in Vienna, the Polish office is now the second largest – together with the office in Romania.”

A Decade of Progress

Both Schneider and Juranek point out that, ten years later, Austria remains a vibrant market attractive for both local and international law firms. “Today, Austria is home to a highly competitive legal market, where both international and local law firms offer specialized services,” Juranek points out. “Industries such as finance, tech, life sciences, start-ups, and data compliance drive demand for these services.” According to him, although the CEE market is considered saturated, “the current focus is on quality legal services that meet the specific needs of clients.”

Schneider further highlights that the current legal market has an emphasis on green/sustainable investments, “with a focus on ESG, renewable energy projects, investment into green transitions, the current upward trend expected in restructuring, alternative finance, and regulatory work.” According to him, “having a regional strategy now truly pays off in terms of providing top-notch services to clients with cross-border mandates.”

Consolidating Local Offices

Schneider and Juranek observe that, regarding their future expansion strategy, law firms are primarily prioritizing the consolidation of local offices over expanding their networks, given the current legal environment.

Juranek notes that “as a member of a global network with over 70 locations worldwide,” the CMS emphasis is “on consolidating our existing offices, rather than expanding the network,” as “the goal is to ensure that the clients receive the best possible legal services.” According to Juranek, the law firm is “servicing an increasing number of multi-national clients who need a fast international capacity to fulfill their needs. The increased volume of international cases which require in-depth local knowledge justified the expansion in the CEE area.”

For Schneider, Wolf Theiss’ current focus lies in strengthening the existing network of 13 CEE/SEE offices. “The existing close cooperation across our 13 offices is continuously enhanced by a permanent focus on efficiency between them, with a strong emphasis on knowledge and talent management,” he notes. “This requires creating an environment for the potential to thrive. Our growth is mainly based on the promotion of promising young lawyers from within the Wolf Theiss network, but also on strategic lateral hires.”

“For example,” he says, “in the past six months, we have welcomed two new partners to our Polish team who bring strength in key areas such as corporate and M&A and energy. In 2022, we also brought in three new real estate partners to further strengthen our regional offering in this area – one in Poland, one in Bulgaria, and one in Romania – in anticipation of not just the continued need to service clients in multiple jurisdictions in the region, but also in cases of companies moving their hub of operations away from Vienna and into the region. One of our main focuses is to build up strong local teams which are essential to lead and drive matters.”