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Law firm turf war may result in suits

A legal squabble between Slovak and international attorneys heated up on February 7 when Štefan Detvai, the chairman of the Slovak Chamber of Advocates (or 'bar'), appeared on TV Markíza to accuse the New York-based law firm White & Case of operating without a license in Slovakia. Calling the American firm's activities "totally illegal", Detvai said that the Slovak bar would lay criminal charges against White & Case and all other international law firms operating in a similar way.

A legal squabble between Slovak and international attorneys heated up on February 7 when Štefan Detvai, the chairman of the Slovak Chamber of Advocates (or 'bar'), appeared on TV Markíza to accuse the New York-based law firm White & Case of operating without a license in Slovakia. Calling the American firm's activities "totally illegal", Detvai said that the Slovak bar would lay criminal charges against White & Case and all other international law firms operating in a similar way.

White & Case responded to the Markíza report by issuing a press release the next day stating that they now and always have conducted business legally. The firm's Senior Associate, J. Russell McGrahahan, said that all their activities are carried out through partner Ivan Cestr, a Slovak lawyer who is a registered member of the Slovak Chamber of Advocates. This structure, McGranahan explained, assures that all legal services provided by White & Case fully comply with Slovak laws.

Detvai told The Slovak Spectator on February 15 that the current laws regulating the legal market (Laws #132-90 and #129-91) state that all lawyers practising in Slovakia must be registered either with the Slovak Chamber of Advocates or the Slovak Chamber of Commercial Lawyers. A legal degree from a Slovak, Czech or Czechoslovak university is a prerequisite of membership in these groups.

Without such accreditation, Detvai said, a lawyer cannot provide legal services in Slovakia. Since foreign lawyers do not have Czech or Slovak law degrees, the international firms operating in Slovakia are not registered with either legal body. Therefore, they are operating illegally.

Long battle

Both sides said that the rivalry between Slovak and international lawyers began years ago. However, the confrontation recently came to a head after White & Case's selection as the legal advisor for the privatisation of the Slovak banking sector. The Slovak bar is jealous of the success enjoyed by international firms, observers said, and feels cheated of lucrative foreign contracts.

"This is a turf battle, an economic battle," said Katarína Mathernová, an advisor to Deputy Prime Minister for Economy Ivan Mikloš. "And the rules [that the Slovaks say the international firms are violating] are there precisely because the Slovak Bar Association wants them there."

Detvai said that the existing requirements for foreigners working in Slovakia were "strict," and that the bar was currently drafting new laws to open and fully liberalise the market.

"But the current situation does not allow for any exceptions," Detvai maintained. "If we lawyers do not abide by the laws, we cannot expect the public to abide by the laws. If a Slovak needs international legal advice he can call a lawyer in America and ask for help. But [the foreign lawyer] cannot come to Slovakia, establish a firm and then provide legal services. I would like to know what would happen if I went to America and set up an office without a license. I think the police would visit me very soon thereafter."

McGranahan responded that Detvai's logic was "intentionally confusing and absurd. White & Case operates through the office of a licensed Slovak advocate. If no foreign lawyers can come to Slovakia there would be no international negotiations, no legal advice from international firms in Slovakia. People would have to cross the border to meet with their advisors."

Slovak lawyers not involved in the dispute, meanwhile, weighed in on both sides of the argument. While they agreed that the international firms were likely in breach of Slovak laws, they were quick to add that the bar had never strongly protested until their foreign colleagues made off with some of the most lucrative legal contracts in Slovak history, such as the bank privatisation deal as well as White & Case's selection last year as the legal advisor for the privatisation of state-run telecom monopoly Slovenské Telekomunikácie.

"It comes down to two main points," said Marko Polakovič, a lawyer for the Bratislava-based legal firm Csekes-Világi. "Firstly, members of the bar are jealous because the international firms are getting... big domestic contracts and big foreign clients. But the second point is that the international firms are providing illegal, unauthorised services according to the criminal code."

Ľubomír Marek, a managing partner of the Bratislava-based legal firm Marek & Ondrejka, agreed that the bar's recent objections were reactionary. "The foreign firms have been here for years," Marek said. "But they are taking more and more clients so suddenly the bar is now acting."

Mathernová, for her part, said the new hard-line approach of the Slovak lawyers could harm Slovakia's business climate. In response to McGranahan's assertion that foreign investment would drop if foreign lawyers were successfully driven from the country, she said "I completely agree. International investors want the support of international legal expertise. I have no idea if they are legal, but it is important for Slovakia to ensure that the market allows for these international law firms to provide legal services."

Detvai said that the law must be respected and said the bar would continue its legal battle against the international firms. McGranahan, meanwhile, said that White & Case is considering a defamation and slander suit.

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