These days, Austrian lawyers are primarily focused on the topics of the prevailing economic climate and its future trajectory, the implications of ESG trends, and the impact of artificial intelligence on the legal profession, according to Dorda Managing Partner Martin Brodey.
"In Austria, as elsewhere, the trends in M&A deals serve as a barometer of market activity," Brodey begins. "The amount of ongoing deals in the pipeline reveals the state of the market. We note concerns raised by lawyers, particularly in the Anglo-Saxon world and in Germany. Private equity players accustomed to accessing capital at low costs face deal constraints at current interest levels. In Germany, two consecutive negative quarters, formally considered a recession, show effects on the flow of deals."
Additionally, Brodey says "there is a general concern about inflation, which in Austria stands at more than 8%, well above the European average. Numerous issues suggest that it could dampen the overall economy. Fortunately, however, our country remains relatively settled and resilient, and we are not easily swayed by sudden developments," he notes. "The main objective is to ensure the maintenance of a predictable environment and stability."
Brodey is confident that the legal business in Austria is not in a downward spiral. "The pipeline of deals is good, in particular in the mid-cap area, presenting an opportune time for strategic moves and exits," he says. "Also, in times of crisis, there is typically an increase in litigation, arbitration, and other areas such as compliance and ESG, which have become prominent topics due to extensive regulatory requirements."
"ESG requirements carry significant implications for all participants in the economic sector," he continues, "and companies face a substantial burden in determining the specific components of ESG requirements. Countries like Germany have taken the lead by enacting relevant legislation, and we often turn to them as a benchmark for understanding the associated challenges." Brodey expects that many of the anticipated legislative updates will also encompass the topic of ESG.
"And another buzz topic in Austria is AI for lawyers – or instead of lawyers – as some are concerned," Brodey says. "The prevailing opinion is, however, that AI will not replace lawyers but rather assist those who are able to utilize it. Many larger law firms have taken steps to incorporate AI capabilities in some way." Clients now anticipate cutting-edge user-friendliness, regardless of whether they use the AI tool directly, he highlights: "It is crucial to adapt as, quite soon, it will become a standard tool in the legal profession. The main focus is on ensuring adaptation to the current trends and maintaining visibility by encompassing all that accompanies them and staying up-to-date with new developments. Our firm dedicates considerable resources to face the challenges of rapid technological development."
Finally, Brodey mentions that several Austrian law firms have launched dedicated Start-Up practice groups which, in Dorda’s case, include lawyers from the Corporate, M&A, IP, and Life Sciences fields. “It's a market trend we have been watching with heightened interest. Founding a business as well as start-up investing in Austria are now accessible options to a larger number of people than ever before."