Polish law firms maturing, expanding to regional cities
Though the competition between local and international law firms in Poland is still strong, Polish firms are narrowing the gap, said Marek Furtek, partner at Furtek i Wspolnicy.
The key to their success will be anticipating what major clients will want and being in a position to provide it. According to Grzegorz Domanski, a partner at Domanski, Zakrzewski i Palinka, the market here will increasingly favor two types of law firms: small, specialized offices filling niches in the market and large firms that are prepared to handle major projects. Other senior Polish lawyers agreed with this prediction.
Drzewiecki, Tomaszek & Wspolnicy wants to be a large firm and is taking steps to achieve that goal. The company recently acquired the smaller law firm Rejman & Ostrowski. According to partner Zbigniew Drzewiecki, the acquisition will help his company to compete for large projects.
Until now, Drzewiecki & Tomaszek has specialized in corporate law copyright, property and tax law and contesting unfair competition. By acquiring Rejman & Ostrowski, the firm gained 10 lawyers and additional specialized expertise.
Rejman & Ostrowski complemented Drzewiecki & Tomaszek primarily with its advertising and media law services. "What happened is a classical synergy effect," Drzewiecki said. But also in these market conditions, "one large entity can do much more than a little one," he said. "Particularly in the case of our company, which specializes in serving companies with foreign capital."
Before the merger, Drzewiecki, Tomaszek's main clients included Philip Morris, Levi Strauss, Warner Bros. and Reader's Digest. Rejman & Ostrowski had Wizja TV and Young & Rubicam.
The size of the legal staff, and number of specialized departments are important to foreign clients, Drzewiecki said. "It's important that we took this step (to incorporate Rejman)" he said. "We are still looking for other acquisitions to bring new law departments (into our firm). It's a matter for this year."
But Wardynski i Wspolnicy, the largest Polish law firm, sees no merger or acquisition in its future, said partner Andrzej Wiercinski. "If a large company like ours merged with another large one, it would weaken competitors, but not necessarily strengthen us," Wiercinski said. In his view, the important phenomenon now is "personnel migrations" between Polish law firms rather than mergers. Recent "migrations" reflect the intense competition between law firms in Warsaw, he said.
Drzewiecki & Tomaszek's expansion strategy goes beyond mergers and acquisitions of smaller firms. "We are seriously considering opening a new office in Wroclaw within half a year," Drzewiecki said. He also said that setting up in a new city makes sense when activities on behalf of current clients justifies it.
Wardynski i Wspolnicy, too, will add to its Warsaw and Poznan offices with branches in other cities. "We are considering this objective and carrying out discussions in various places," Wiercinski said. "We are interested both in northern Poland and in Silesia, because these regions are developing most dynamically. The new offices will appear within this and the next year. It takes some time."
Wiercinski won't describe this as "expansion" yet, pointing out that for now it is a matter of serving existing clients that have operations in other cities. And "after all, Warsaw doesn't have a monopoly on good lawyers," he added.
While Wardynski is aiming at the north and southwest, Domanski, Zakrzewski i Palinka will open an office in Poznan. "We have become more and more mature (as a law firm) and can now make such a decision," partner Domanski said. "We have to be close to certain local markets, following Arthur Andersen." (The firm cooperates with Arthur Andersen's accountancy operations.) "We are eager to finalize our plans."
Domanski & Zakrzewski, which has many German firms among its clients, has run an office in Poznan before, but only intermittently. This spring a permanent Poznan office will open. "We have made the decision and it cannot be postponed," Domanski said. For the moment the firm is considering only Poznan because of the presence of German firms there.
Lukowicz i Partnerzy, a large Warsaw firm that recently began to cooperate with Deloitte & Touche, has clients with operations in Poznan, Gdansk and Krakow, who expect closer contacts with their lawyers. "We don't have offices outside Warsaw, but we have plans" said partner Jolanta Okoniecka. Three branch offices will open this year. "First of all Poznan, Krakow and Gdansk maybe," she said. With the three new offices in 2000, Lukowicz i Partnerzy's number of lawyers will double from about 25 to 50.
Warsaw law firm Beata Gessel i Wspolnicy, with about 30 lawyers, is heading in a similar direction. The firm has operated its Wroclaw office for two months. "Wroclaw was first because of the lack of large Polish firms there," said partner Andrzej Chajec.
According to Wiercinski of Wardynski i Wspolnicy, Poland's market for legal services is expanding with general economic growth and legal reform. "The growth will accelerate as Poland approaches EU entry," he said. "More foreign law firms will be knocking on (Poland's) doors."
In Wiercinski's opinion, that doesn't mean that foreign law firms will displace Polish ones. Rather, after examining the experience of France and Spain where foreign law firms gained access to those markets, he predicts further strengthening of Polish law firms in the heat of competition.
