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Guest Editorial: 2020 – The Beginning of a New Cycle

Guest Editorial: 2020 – The Beginning of a New Cycle

Romania
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The Romanian legal market got overheated in the past couple of years. The numbers went up and competition increased. The industry got more sophisticated and a variety of success stories unfolded.

Some change in conditions was to be expected though – the legal industry is strictly correlated with the economy, and the economy grows in cycles. Hence, there was a lot of talk about a correction.

The correction was postponed time after time and law firms started to plan as if growth would last forever. This is only understandable: the hope that tomorrow will be better is the engine behind any human enterprise. Success compels people to budget for more success.

In all fairness, nobody anywhere in the world was able to predict that we would spend Q2 in a lockdown answering questions about force majeure and planning a safe return to the office. Neither in our industry, nor in any other. But the correction is now here, and we need to deal with it.

The immediate effect was the suspension of some large-scale transactions. Several of them – primarily in financial services, energy, logistics, real estate – were weeks from signing. Most of them will come back in one form or another.

In the short term, several sectors of Romania’s economy will experience a contraction – leaving law firms to redirect or adjust their resources. This is always a painful exercise as specialization (a must in good times) makes it difficult to adapt in times of distress. The game of big numbers is temporarily gone. Adaptability will be the test to pass; firms with initiative will find it easier to navigate.

In the long run, managers will be more careful with recruitment and will recall that caution is a good friend as it was in 2008-2012. The effects in our industry will not show from one day to another. It is a slow-motion movie – you can see the trends developing over time but you cannot expect to see significant changes in the short term. If you compare today’s status quo to what our market looked like 20 years ago – and again ten years ago – you will see that the structure of the market has changed dramatically. But no dramatic move occurred from one day to another.

Change sometimes comes through spectacular leaps, but progress almost never does. Progress requires an understanding of change, careful planning, and seamless execution. And always a large amount of talent put to work day after day. Luckily, the Romanian legal market has its fair share of talent – thus, progress in one form or another is guaranteed.

Coronavirus is not a game-changer. It is merely a safety car on the racing track. Inertia will be an enemy for slowing down and then accelerating again; although the Romanian legal market will be shrinking for the foreseeable future, the return to speed of law firms once the safety car is off the track will be fueled by name, reputation, and talent. In that order.

By Francisc Peli, Managing Partner, PeliPartners

This Article was originally published in Issue 7.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Peli Partners at a Glance

PeliPartners is a full service business law firm based in Romania.

A team specialising in complex projects that require innovative approaches, the PeliPartners lawyers have a wealth of experience in a variety of fields, including corporate, mergers and acquisitions, financing, competition, infrastructure & concessions, energy, real estate and corporate law – being involved in some of the most important transactions on the Romanian market for the past 20 years.

Areas of practice

Corporate M&A: With a reputation gained in complex transactions across many sectors (such as financial services, healthcare, energy, IT&C and others), the PeliPartners lawyers are regularly called to assist strategic clients, as well as investment funds or entrepreneurs in relation to various corporate projects, including M&A, structuring or restructuring of groups of companies or corporate governance matters. The firm regularly works in cross-border projects and in collaboration with international law firms.

Finance & banking is a strong practice at PeliPartners, whose lawyers advise across various matters, including financing / refinancing, restructuring, performing and non-performing portfolio acquisitions, regulatory. PeliPartners has a well established reputation with banks and debtors alike. The firm is included in the panel of some of the largest banks present in Romania. PeliPartners advises as well on cross-border financing and restructuring transactions.

Competition & Commercial: PeliPartners’ antitrust practice enjoys a fantastic reputation among international and local clients. The firm’s lawyers are thought leaders and have advised in some of the most complex transactions and projects related to this jurisdiction. They advise on investigations, merger clearance procedures, as well as on various compliance matters, helping clients design and implement distribution, franchise and pricing systems and policies. The firm currently assists clients in sectors such as financial services, IT, telecom, retail, healthcare & pharma.

Real Estate & PPP: With a stellar reputation among local and institutional developers and investors, PeliPartners is called to assist in some of the largest transactions or projects on the Romanian market.

Dispute Resolution: This firm’s clients want to be assisted and represented by PeliPartners when disputes arise in relation to their activity. PeliPartners will put together mixed teams of practice experts and litigation lawyers, that can bring an innovative but thorough approach of each matter.

Firm's website: https://pelipartners.com/