Tenders for legal services are not like beauty pageants

It is a tough fight just to prepare a good quality offer for the public sector.

Milan GocníkMilan Gocník (Source: Sme)

In the current situation on the market of legal services, nobody would be able to grow dimensionally without public orders. Given that the market is rather small in Slovakia, every law firm that achieves some size can only grow further if it works on public orders. Perhaps all of the 10 largest law firms to some extent do work on assignments from the public sector. Internationally, the largest law firms of the world participate in public orders too and even use that for their own promotion. It is natural and it is perceived as prestigious, not something law firms should be hiding, says partner at the Soukeník - Štrpka law firm, Milan Gocník.

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How important are public orders for your law firm?

They are as important as mandates from the private sector.

How important is the public sector regarding turnover? If you didn’t have public orders, you would probably be a much smaller law firm.

It definitely would have an impact on the size of the firm, just as it would impact the size of other law firms in the top 10. Work for the public sector brings about conflict of interest that in turn disqualifies us from many significant cases in the private sector that we would otherwise vie for. At the same time, public orders made up less than half of our revenues in the last five years, so we neither underestimate nor overestimate their importance.

Public orders on the market with legal services bring about a controversial question. Do public orders allow firms with significant revenues from the public sector go under the market price in their offers for the private sector? In other words, can a law firm dump the prices for private clients thanks to its intensive contacts with the public sector?

No, I don’t agree with that. Such a construct does not make sense and rather betrays a lack of knowledge of the market. The costs of providing legal services to the private sector are fully covered from our revenues from mandates of the private sector, and we do not need to cover those costs from the public sector, or vice versa. The idea that standard and renowned firms like ours earn sky-high sums from the public sector is incorrect. The prices are sometimes the same as in the private sector, but often much lower. With the public sector, we typically charge hourly rates, never a reward as a share of profit. The hourly rates are between €79 and €118, mostly around €90 per hour on average. In exceptional, particularly demanding cases, we charge a higher rate. For example, in an international arbitration we charge €197, as the price must cover the costs for higher expertise, risk, and our responsibility.

Journalists used to frequently criticise the nontransparent selection of legal services. On the one hand, it is not good for the selection to be too subjective and resemble a beauty pageant, on the other hand, it’s not good that the price is the only decisive thing. Have things improved in the last decade?

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