Law: A nation hungry for trade lawyers: David Nathan finds there is great demand in Budapest for experts on commercial law

SINCE the break-up of the Soviet empire, Hungary has passed 70 new laws to facilitate the transition from Marxist to market economy, and has seen an influx of dollars 6bn in investment.

It follows that there is no shortage of work for lawyers, particularly Western lawyers experienced in international trade, commercial transactions and Common Market regulations. These are matters that Hungarian lawyers may know about in theory but are unfamiliar with in practice.

Rosemary Bointon, born in Bournemouth, heads McKenna & Co's Budapest office. She and another English lawyer work closely with McKenna's associate Hungarian firm, making a team of 10.

How do the Hungarians take to having English lawyers practising in Budapest? 'Most of them, especially those in association with foreign lawyers, realise that they don't have the commercial or international experience,' Ms Bointon says. 'As they have not been used to dealing with a market economy, they don't necessarily know what the requirements are.

'Normally, it is a question of the way things are drafted and the terms and conditions that a Western investor is looking for. For example, a municipality runs out of money after spending dollars 50m on a project. They look for help from a Western investor. They think that because they have already spent dollars 50m, investors will be willing to hand over another dollars 50m and control will remain with the municipality.' It does not happen like that, Ms Bointon says. 'Part of what we are doing here is to educate people in what is commercially acceptable.'

But Hungarians are touchy; lawyers are touchy and Hungarian lawyers are very touchy indeed. 'You have to educate without seeming to. One of the problems I have with our Western clients is to try to restrain them from saying things that are not perhaps tactful,' Ms Bointon says.

After she qualified Ms Bointon worked for Slaughter & May before joining McKennas and specialising in EC law. She spent a year in Brussels, where she became involved in East European aid negotiations, particularly with the Poland-Hungary Association for Economic Reconstruction (Phare). After that it was a logical step to accept the offer of the Budapest office. She has been involved with a number of telecommunications projects. 'Once they are in operation', she says, 'they will transform the system. Being part of that process is very exciting.'

Richard Lock of Clifford Chance qualified seven years ago and worked in Bristol and London before arriving in Budapest. His wife is one-quarter Hungarian but, like him, she is having to learn the language. This is not an easy process, as Rosemary Bointon has also discovered - Hungarian has few links with any other European language.

Mr Lock's work is split between advising Hungarian state agents on the best methods of selling state assets and advising English, French and Dutch investors from the moment they arrive to have a look around, to the problems that arise once they have committed their money.

The attitude of Hungarian lawyers is, he says, a 'very sensitive issue'. On the one hand, he and others like him advise on Hungarian law, 'surrounded by Hungarian lawyers who are not resentful at all'. On the other hand, he says, there is resentment against the number of foreigners in the country. 'There was a pretty hostile article in an East European journal by a Hungarian. He was mainly critical of his fellow Hungarians who had linked up with foreign law firms,' says Mr Lock.

Mr Lock believes that his firm is as well established in Budapest as it is in Paris or Madrid. 'It is not a British implant,' he says, 'but part of a large international firm, working with local experts'. Hungarian lawyers also work for Clifford Chance in London, and the firm is involved in a scholarship scheme with University College. 'We take students from Hungary, Poland, the Czech Republic, Slovakia and other East European countries,' Mr Lock says.

Robert C Knuepfer is the managing partner of the Budapest office of the international firm Baker & McKenzie. The office was established in 1987, the first Western firm in law, accounting, insurance or banking to set up house in any of the Comecon countries.

'Many of the laws that served Hungary for the last 50 years cannot deal with the realities of the country today,' he says. 'We are living through the rebirth of a nation. It is like colonial times in the US, with people running around writing the first laws on taxation, immigration, foreign investment and so on.'

The kind of change that has taken place is symbolised by the Baker & McKenzie office address, 125 Andrassy Utca. It is an elegant building, at one time the headquarters of the Hungarian Communist Party. Down the road at number 60 was the headquarters of the local KGB, a place of torture and fear.

Andrassy Utca itself was formerly known as Nepkottarsasag, which means republic. Before that it was Stalin Utca. And before that it was Andrassy Utca.

(Photograph omitted)

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