"I think that there are several developments that will affect the Polish legal market in the near future,” says Aleksander Stawicki, Senior Partner at WKB Wiercinski, Kwiecinski, Baehr in Warsaw.
"The first one is the ongoing debate on the way legal services will be provided to state-owned companies.” According to Stawicki, a plan is being considered that would expand the responsibilities of the General Counsel to the Republic of Poland — the state authority that until recently represented the State Treasury in court. According to the new law that entered into force on January 1, 2017 this authority is also empowered to represent state-owned companies. As the implementing regulation has not yet been adopted, the specific extent of this expansion is unclear, as it — for instance — hasn’t yet been determined in practice whether that authority would represent state-owned companies only in disputes, or in other matters as well. Stawicki says, "there probably will be a fixed budget, such that each state-owned company — depending on its size — will pay a fixed-fee to this state administration and then will be entitled to a certain number of hours.” Stawicki describes that, not wholly sincerely, as "a very innovative idea.”
"There are a lot of doubts about it among lawyers,” he says, and many questions about the proposal remain unanswered, including to what extent the state authority would be able to provide highly-specialized advice, whether it will have enough specialist lawyers, and so on. Stawicki assumes that, with the state's budget, they will be hiring, but due to the financial constraints they may not be able to hire the biggest talents on the market.” There are also questions about potential conflicts of interest (as the interests of the state rarely coincide exactly with the interests of a company (even if this company is state-owned)). "So probably only time can tell to what extent this solution can work and whether it can work efficiently,” Stawicki says.
Regardless, he says, "depending on the scope of the project and the final arrangement there is the possibility that at least part of work for state-owned companies that is currently being done by law firms in the market may be taken over by this authority.”
"The second issue,” Stawicki says, "is the ongoing debate in the Parliament about implementing the EU directive to prohibit auditing companies from doing legal work or any other kinds of work than auditing.” Stawicki points to the rise of the Big Four law firms in recent years, noting that while they withdrew for a while from the legal market following the collapse of Enron, "now we see them coming back and really competing fiercely with law firms for legal work: investing in people, doing a lot of marketing, etc. — not concentrating any more just on corporate work or tax law but going into more specialized areas. So the outcome of this discussion — to what extent they will be allowed to continue this — will be another big issue, and the answer to that issue will have a huge impact on the market."
Directive 2014/56/EU as well as Regulation (EU) No 537/2014, Stawicki explains, "allow the member states to impose a ban on auditing companies, prohibiting them from engaging in other kinds of advisory services for their clients, to preserve the independence of the audit and its proper functioning.” Stawicki reports that “of course the audit companies say there's no risk and they should be allowed to continue their current business model. But there's also opposition from, for example, some tax advisors and legal advisors who say that there are conflicts of interest and that it is in the best interests of the proper functioning of the market that they not be allowed to do so." He concludes that “this is a very important issue but it's not clear how this it will end up."
Turning to more optimistic subjects, Stawicki says that “the Polish economic situation is good,” and reports that, despite continuing questions "about the political situation in Poland, and Europe, and the world in general, and about how this might influence the activity of investors, last year was very good for us.” Stawicki says, “we have increased our profits, we have increased the head-counts again and have now over 80 lawyers, which shows that there is a place for growth on the Polish market. Of course, it's a competitive market and always has been with the presence of the international chains and the presence of lots of really good Polish independent firms, now with the new wave of boutique firms formed by lawyers leaving the bigger firms. But our business plans assume that we will be growing over the next few years, both in mainstream work — in transactions and litigation — but also in the more specialized areas of law, like competition law, transportation law, energy law or pharmaceutical law – areas which has have always been very active, and we expect that there will be more work coming.”
