Things I Have Learned In 24 Years In Romania

What do clients want from their lawyers? This is a question that has been asked many times in Romania. It is a question which I have asked myself many times in the 24 years I have been practicing here.

In 1990 coming to Romania was a complete change from when I practiced in High Holborn, London. One had a legal and firm history to draw on; an established structure; a known way of doing business and dare one say it- clarity.

When I came to Romania there were approximately 7000 registered lawyers in the whole of the country. They dealt with crime, divorce, family matters and inheritance issues. Contracts were drafted by the notaries so very few lawyers had the knowledge or the skill and expertise in drafting.

There were a number of lawyers who had or were working in the foreign trade companies. These were the people who had some knowledge of foreign legal practice. There were some colourful and interesting characters amongst them as well, but that maybe is for another blog.

It was though clear from the very beginning that Romanian law and Romanian lawyers would be developing their own modern jurisprudence and practice. This they have done effectively since then and things are after 20 years beginning to move in a way that gives certainty and a rule of law.

Those practising law have also changed. There has been an explosion of lawyers in Romania as well as foreign lawyers and international law firms in Romania, just as there has been an increase in accountants and tax advisors. I am told that this is because everyone saw these professions as an easy way to make money advising foreign investors. Unfortunately this increase of lawyers has a deleterious effect on the practice of law in Romania.

For example, in any earlier blog I talked about negotiating techniques in Romania and this has carried over into the practice of law. Normally in the west and here in Romania the parties agree who will supply the first draft of a document. This is prepared and sent to the other side. One assumes that it was drafted with care and consideration and takes into account the instructions received from both parties. Normally the other lawyer is expected to comment and make minor adjustments. This unfortunately is not the position in many cases in Romania. It is often returned covered with more amendments than the original. Why, because the other lawyer feels he has to justify his fee and show how clever he is in comparison to the other lawyer. Such a lawyer when challenged often shows a failure to understand the transaction and the documentation. When asked to justify their amendments from a legal and commercial view they cannot answer and then take up a position of intransigence. By then they have convinced their client that your client is a crook and trying to do down the Romanian party. From then on in the relationship goes downhill.

The standard of Romanian lawyers in the early 1990′s was very high and I have tremendous respect for lawyers who were trained during that period. I have worked with many of them count them as business friends; their knowledge and understanding of the law was as good if not better than many lawyers in England. Things have now changed. I must honestly say that the lawyers currently coming on the Romanian legal market leave much to be desired in terms of training, knowledge of the law, how it is applied and they show a lack of understanding as to their role in a transaction. I often wonder how they obtained their degree and passed the bar exams. The rush to produce lawyers has lowered the standards tremendously.

In choosing your lawyers in Romania do not choose necessarily the first one that you meet. The standard is not uniform. Try and do a little market research. Many Romanian lawyers will form companies using standard statutes for speed and cheapness and a very low fee, but is this what you need. They will pitch the fee low to get you as a client but if you pay peanuts you get monkeys. Many time we have had to redraft statutes for clients who used the first lawyer they met and who did not understand their business, or indeed business at all. As a serious investor you know the real cost of the services you are buying. Would you make the same decision in your own country? As a well-known business leader in Romania often says “do not leave your business brain at the airport when you catch the plane”.

One further initial issue also to be aware of is language. Many lawyers, and indeed business people speak English. However be conscious that their knowledge of the language often is very limited. They do not have the vocabulary to explain not only the law but also the legal environment in which you the investor are operating. This is an issue which all foreigners come across in Romania. Because someone speaks English do not assume that their knowledge of the language is the same as your. You should always test any question or answer by asking the question in more than one way – then you may get clarity.

I hope that this blog and the earlier ones about doing business in Romania have been helpful. It would also help me if you have any comments on this blog and the others as to their accuracy. If you do please post a comment.

:: The source: Romania Law Blog

Nicholas Hammond
Guest writer. Senior Partner of BWSP Hammond Bogaru & Associate

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