A volatile legislative landscape, busy disputes practices, and a rather slow job market are the three main characteristics of the current Hungarian legal market, according to Gergely Ban, Managing Partner of ACT Legal Hungary. All three, he says, can be traced back to the COVID-19 outbreak.
"The buzz word for the better part of the year has been COVID," Ban says. "It has drastically changed the ways we've been working throughout the last 12 months, with it likely having a long-term impact on home office arrangements and, generally, the structure of law offices." This is not just the case for law firms, he says; the biggest challenges for companies in all sectors over the last few months has been "keeping on top of employment law and connected regulations with regular legislative updates," which, in turn, are trying to keep up with the evolution of the pandemic. "We simply don't know if we will have the same legislation tomorrow as we do today," he says, "which makes it very challenging for anyone in the legal services sector to advise their clients."
In terms of client work, M&A transactions are still taking place, Ban reports, with his firm having worked on four large transactions in the last 12 months – two establishments of foreign companies in Hungary and two Hungarian companies being bought by foreign companies. "Despite it all, it does seem that the upward trend of the country's FDI attractiveness has continued this year," he notes.
"Looking at the market as a whole," he reports, "the effects of the pandemic seem to be quite inconsistent. Some large law firms have been hit hard while others have been booming. Besides providing valuable legal insight and high-quality services I can't say there is a secret recipe to success in the current environment. I think mostly it was simply a matter of the nature of the businesses in each firm's client portfolio. In our case none of our big clients had to shut down – in fact, some had even started new projects by the end of last year."
The type of work that has definitely seen a spike, according to Ban, is disputes. "Between three large clients we are working with, there are hundreds of consumer claims that are in the works, and I imagine that is the case for most firms," he says. "Of course, disputes are made all the more tricky these days because of the repeated courts shutdowns last year, and, for most of the year, if the courts were open, we needed to draft documents electronically and submit them to the courts or carry out the actual hearings online, which has led to quite a slowdown of the process."
Against the background of ACT Legal Hungary's rebranding (as reported by CEE Legal Matters on March 18, 2021) and with the firm's good fortune in avoiding most negative consequences of the pandemic, Ban explains that the firm recently looked to hire new lawyers. While it did manage to bring on one senior and two juniors recently, Ban notes that "moves are stagnating in Hungary." According to him, "it might be the realization that, in the current climate, it is simply not a good time to move, or it might be juniors coming into the job market with a different mindset and expectations, or both. Regardless of the cause, we're finding it is a lot more difficult to hire these days with a recruitment cycle taking three months, or even six in the case of seniors.