Euros hurriedly being spent on the construction of
motorways, and the modernization of railways and airports all in a bid to assure the much-needed upgrading
of the country’s infrastructure. But with one year left
until the whistle blows, there is still a very long way to
go. Just how ready are the country’s top players for some
of the biggest changes in the country’s history?
SPIT AND POLISH
Global economic downturns invariably hit the biggest,
most sophisticated markets first before a ripple effect
spreads outwards – this recession was no different. There
was a brief delay before the crunch that was keenly felt
in the powerful west Europe markets hit the CEE countries, but they certainly weren’t spared the rod. In 2009
the volume and value of M&A deals across the CEE in the
financial sector were at their lowest levels since 2005,
according to a report by CMS Cameron McKenna in
association with mergermarket.
However, Poland continued to lead the way in the
region thanks to factors such as its size, its population,
the significant levels of large consumer spending and the
positive ratio between the high number of well educated people and reasonable cost of labour, explains
Bartosz Kaniasty, counsel in Clifford Chance’s Warsaw
office. ‘Poland is regarded as the prime market in the
CEE and some investors have even started to view
Poland as a separate economy, not considering it a country from the CEE region’.
Research by CBRE supports this, claiming economic
indicators show that Poland turned out to be remarkably
resilient to the effect of the global financial crunch. A
report at the end of 2010 notes that ‘the Polish economy is perceived as one of the most stable and developing economies in the CEE region and was the only one
with economic growth in the last year’. The GDP growth
for 2009 reached 1.7% while interest rates were cut to a
record low level of 3.5%, inflation remained low and the
unemployment rate was relatively minimal at 12%. As
K&L Gates Jamka’s Warsaw managing partner Maciej
Jamka points out, ‘The modest growth of the Polish
economy in the last two years was spectacular when
compared to other European countries’ figures’.
However, no EU country is totally resistant to the
effects of the crunch and Poland is not emerging com-
pletely unscathed. At the height of the recession, it
struggled with a significant weakening of its currency,
with the zloty dropping by around 40%. There remain a
number of issues which will impact its economy. It is still
subject to tremors from larger financial markets, and the
turbulence in the euro zone will potentially surge the
zloty, serving to destabilise the economy as a whole.
MARKET VALUE
Despite the considerable work for Polish lawyers that the
successful Euro 2012 bid brought with it, the downturn
nonetheless had a significant impact on the legal services market. Lawyers report that pressure on fees has
‘The economic slowdown forced mainly
bigger firms to become creative in
structuring their fee proposals and be
more efficient in handling clients’
instruction to maintain some of the
profit margin. Remunerations based
on a cap or fixed fee basis have
become standard.’
increased dramatically, with flexible billing becoming
more popular. ‘Clients are much more cost sensitive and
more often define the quality of legal services based on
the value that they receive and not the amount of time
the lawyer spends working. This will not change just
because the economic situation is improving’ explains
Daniel Jastrun, partner at Warsaw-based Magnusson.
Firms are increasingly promoting fixed or capped fees
in response to the drop in deal flow, particularly in the
more competitive markets such as Warsaw. ‘The economic slowdown forced mainly bigger firms to become
creative in structuring their fee proposals and be more
efficient in handling clients’ instruction to maintain some
