On September 11, 2018, CEE Legal Matters reported that Akos Eros, the Managing Partner of Squire Patton Boggs in Hungary, had taken a team from that international firm to join Wolf Theiss, led in Budapest by his old friend Zoltan Faludi. The reunion of these two actual comrades-in-arms is a source of real excitement at Wolf Theiss Hungary, which is embracing the changing legal market of the moment with confidence and style.
Early Encounter
The Hungarian legal market – focused, for obvious reasons, on the country’s capital – is fairly intimate, like those of many of its CEE neighbors, and many of its participants, especially those who came of age during the Communist era, know each other well. Eros and Faludi are no exception.
“We’ve known each other for 33 years,” smiles Faludi, sitting with his new colleague in a conference room at Wolf Theiss’s Calvin Square office in Budapest’s 8th district. The two were born the same year, albeit in different parts of Magyarorszag – Faludi was born in Komlo, in the southern part of the country, while Eros was born in Budapest and grew up in Jaszbereny –and first met in 1985 while performing their country’s then-mandatory military service in Zalaegerszeg, in far western Hungary. After that commitment ended the two went to different law schools, with Eros graduating from the University of Szeged in 1992 and Faludi graduating in 1991 from the University of Pecs.
Faludi’s Energetic Path to Wolf Theiss
After obtaining his law degree, Faludi spent a short year with the Judit Korompay Law Firm – a boutique he describes as “a one-woman show” — then joined Budapest’s Koves & Partners a year later. He stayed with the firm for 17 years, both before and after its 1994 merger with Clifford Chance, in the process developing a market-leading Energy practice.
In 2007 Faludi accepted Wolf Theiss’s offer to open the firm’s Budapest office, which he has led in the decade since. “We were one of the last genuine international law firms to open an office in Budapest,” he says of Wolf Theiss. “We started out as a very strong energy practice, then eventually transformed from a boutique into a very strong full-service firm. And we became a major player in this league,” he says.
Indeed, in recognition of Faludi’s widely-recognized Energy expertise, at Wolf Theiss he is the Regional Co-Head of the Projects (Energy & Infrastructure) group. He was also the Chairman of the Energy Arbitration Court in Hungary from 2007-2017 and remains a Listed Arbitrator at the Arbitration Court attached to the Hungarian Chamber of Commerce and Industry.
Still, Faludi bristles at the suggestion that Wolf Theiss reached out to him simply for his Energy expertise. “I was an M&A lawyer specializing in Energy. I still hope that the firm’s choice was picking the person rather than the sector. And it’s worked! We’ve grown into a very stable firm.”
Eros Takes a Different Road
While Faludi was working with LKT, Clifford Chance, and then Wolf Theiss in Budapest, Eros chose a different path, spending his first year after law school traveling and learning English in the United Kingdom and Australia. Once back in his native Hungary he saw an advertisement in the country’s HVG newspaper for a vacant position at an international law firm. He decided to interview almost as a lark (“I had no idea what an ‘international law firm’ was,” he laughs), and in 1992 he ended up joining the Budapest office of Heller, Lober & Bahn – which (with one or two stops in-between) merged with Freshfields in 2000.
In 2004, Eros left Freshfields to open Coopers & Lybrand’s associated law firm in Budapest. Eros shakes his head at the memory of his two years with the then-Big Five firm, saying that “it wasn’t a mistake, as I learned a lot and don’t regret the experience, but they didn’t know what to do with lawyers.” After two years he jumped to Arent Fox, which merged with Squire Sanders & Dempsey in January 2000.
So why, after twelve successful years with Arent Fox/Squire Sanders/Squire Sanders & Dempsey/Squire Patton Boggs, did Eros decide to leave the Cleveland-based firm? He suggests that trends in the legal industry affecting international firms had a role. “We’re heading away from globalization right now,” he says. “President Trump in America is an example of this move towards nationalism. Thus, when you are with a big international firm like Squire Patton Boggs, you are one of 500 equity partners. Your view is irrelevant. The Chairman doesn’t care what someone in Singapore or Perth or Budapest wants to do. It’s irrelevant. The main stream is the United States – or for an English firm it’s England.” He pauses. “Because of that, you start to feel that it’s a different firm than the one you helped build, that you wanted to be a part of. This is not just Hungary — it’s the same in Paris, and China. We are outside of the focus.” He describes a plan to expand his team at SPB that was eventually squashed from its US headquarters. “And I heard this from other European offices as well. And I realized, ‘if the firm is not committed, then I’m not committed.’”
Together, Looking Forward
Zoltan Faludi sensed the time was right to reach out to his old comrade: “We wanted to grow, and we heard he was unhappy and we reached out to him.” For his part, Eros says that he was attracted by the opportunity to stay in a firm with a multi-national practice and a real commitment to the region. “Zoltan and Janos and I found each other,” Eros says, referring to Wolf Theiss Partner Janos Toth (Laszlo Kenyeres is the fourth partner at Wolf Theiss Budapest). “That’s not a coincidence. I’m too old to go through this with another ILF, and then have it change its focus again.”
Faludi laughs. “Yes, being part of the core business is a good thing.” Indeed, he says that he feels more invested and more a part of Wolf Theiss than he ever did at Clifford Chance. “I feel more integrated. That comes with size. When you are 1 of 30 partners you are more invested than you are in a firm with hundreds of partners all over the world. And this is a good feeling! To be a player — an influencer — when you can.”
Faludi and Eros are both excited about the opportunity to work within Wolf Theiss’s regional network as valued contributors rather than remote outposts. According to Faludi, “Wolf Theiss generates about 60% of its work and revenues in Austria. The rest is CEE-generated.” And that, he insists, is a strength. “Comparing it to the Anglo-Saxon firm I used to work with, Wolf Theiss’s Austrian nature matters. They are neighbors. They know what’s going on. The historical traditions, the banks. They are simply far more aware and familiar with the countries and cultures of CEE than the London-based or New York-based firms.”
In addition, he emphasizes, the firm’s strategy – which involves a footprint across CEE but carefully avoids the US and UK – allows it to benefit from referrals from the ILFs. “One of our big advantages for clients is that we are able to assist them in all 13 offices. We can cover the entire region at once. This is what we can do really well. Plus, we can work really well with the English and the US firms. We are not competitors — we can cover the region for them. And we are free to choose who we will work with.”
And, despite the gradual withdrawal of many international firms in recent years, business is good. “The Hungarian economy is going well,” Faludi reports. “There are more and more clients, and assets are cheaper. The political situation may be good or bad, but at least it’s stable.” As a result, the Budapest office contributed more than EUR 3 million in revenues to Wolf Theiss’s bottom line, placing it among the top three of the firm’s CEE/SEE offices.
Ready Today for Tomorrow
Both Faludi and Eros believe the gradual withdrawal of international law firms from CEE is part of a sea-change in the provision of legal services in the region. “There’s a consolidation of the legal market,” Faludi says. “Clients are changing; we have to change as well. Tech, commoditization, etc.” But he’s confident all this works to Wolf Theiss’s advantage, allowing his office to pick up extremely strong lawyers feeling abandoned by their former employers. “The ILFs are withdrawing – but we’re not going anywhere. So this is a good opportunity for us to grow. To pick up a high-quality lawyer who wants to stay in the market but whose firm may have different strategies. Wolf Theiss is growing now. In Prague, in Poland. This is a reaction to the positive things happening in CEE.”
Ultimately, Faludi concludes, “Wolf Theiss has not changed its strategy. It may have started a bit late, but it was committed to being a CEE law firm, and it still is. We’re not going West, we’re not going to Russia. We are here, and this is where we want to be.”
Eros agrees, with a comment that doubles as a personal statement. “And we don’t want to go anywhere else.”
This Article was originally published in Issue 5.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
