As usual with the onset of summer, HAVEL & PARTNERS, the largest Czech and Slovak independent law firm, has announced internal promotions. As of 1 July 2021, 10 attorneys will be promoted: three of them to the position of managing associate and seven others will be promoted to the position of senior associate.
Current senior associates Kateřina Surková, Martin Drahotský and Jiří Kunášek will become managing associates in July.
As of that date, Pavel Amler, Soňa Karbanová Schweizer, Pavla Kaufmannová, Jakub Kocmánek, Pavla Korcová, Marián Minárik and Martin Stančík will change their position from associates to senior associates.
“The legal profession is mainly about people. This is why I am very pleased that in the HAVEL & PARTNERS’ team we have colleagues who contribute to the firm’s continuous growth and development with their work commitment, excellent professionalism, exceptional professional knowledge and management skills, and the outstanding quality of services,” said Jaroslav Havel, the firm’s managing partner.
“Our objective is to work with the best lawyers on the market and, above all, to retain them in the long run. That is why we place great emphasis on the professional and career development of our successful colleagues at all levels of seniority. We foster a motivating environment in the firm with a clear vision of career growth, which is much faster in the case of exceptional legal talent than at our competitors. I congratulate all our promoted colleagues and I also believe that we will achieve many new successes down the road as we continue working together”, added Jaroslav Havel. HAVEL & PARTNERS as an extremely stable team of senior lawyers.
The vast majority of partners active in the firm have been promoted to senior positions within the firm through internal promotions. The firm also remains the most sought-after employer in the industry, winning the TOP Employers poll for the seventh year in a row.
Dear Clients and Business Partners,
HAVEL & PARTNERS is celebrating 20 years and a special edition of our H&P Magazine is dedicated to this anniversary. The issue is available HERE as well as in a completely new ONLINE version. We would like to use this opportunity to share our memories and values with you, remind you of the pillars of our success, as well as to bring you our clients’ highly inspiring achievements, inform you about our future plans and thank you for your support.
When establishing the firm in 2001, we were determined to build a top law firm based on an international model that would offer a comprehensive legal service. Yet we never thought that in 20 years we would be the largest law firm in central Europe with 2,500 clients and a turnover in the millions of euros. The fact that we have managed to build a world-renowned firm is mainly due to our ability to respond immediately to the needs of the market and our clients. Over the last 20 years, the economy and society as a whole have experienced dynamic changes, which we have always seen as a new opportunity and adapted to immediately.
The dynamics of the first 20 years of the new millennium are summarised mainly in the three areas of our practice that are key for the firm’s future. You can read about the turbulent changes affecting real estate, but also about private equity and venture capital, which make a major contribution to the economic growth of the entire CEE region. And we also describe how economic developments have transformed the protection and management of private wealth.
One of the other pillars of our success has been our exceptional relationship with our clients who entrust us with their business and private affairs. We are proud that these include some of the most successful companies across all sectors, from whom we also have much to learn as they have also achieved global success. Therefore, we bring you the inspiring stories of our long-term strategic partners, with whom we have been growing together for many years in line with our motto “Connected through Success”.
The Magazine also brings a number of other interesting articles, comments and interviews related to the HAVEL & PARTNERS brand, which I believe you will find though-provoking and enjoyable in many respects.
In conclusion, I would like to thank all of you for helping us write this extraordinary story. Thank you for your support, loyalty and trust that motivate us to continuously improve, look ahead and continue to widen our lead over competitors as the leader in the Czech and Slovak legal markets.
I wish you a lovely summer.
Kind regards,
Jaroslav Havel
Managing Partner
Source: Building World (June 2021)
Authors: Jan Topinka, Martin Stančík
The coronavirus pandemic has also had an impact on real estate financing and development. Banks have become more cautious about financing certain types of investments or projects and carefully select sectors and areas. On the other hand, interest rates have dropped, which allows investors to look for new opportunities for appreciating their assets by investments in real estate. To this end, there are various sources available. Besides classic bank loans, these include bonds or crowdfunding as a new trend. The aim of this article is to briefly introduce the individual options, including their advantages and disadvantages
In pandemic times, banks are more cautious and carefully consider the risks of the borrower and the projects to be financed. Although a bank loan is currently relatively cheap and still the first choice for many developers, the penalty for cheap money is less “freedom” on the part of the borrower and some administrative burden in loan administration.
The higher the risk of the project, the stricter the bank’s requirements – this typically involves the requirement to have a certain level of equity, and meeting financial indicators such as DSCR or LTV, and other financial restrictions.
The bank needs to have a high degree of control over the project. Therefore, it is necessary to be prepared for the obligation to provide financial statements (typically on a quarterly basis) and other reporting obligations, a ban on payments to shareholders, a ban on a change of control over the debtor, and other tools that are to ensure that the bank will be well informed and able to demand remedy in the case of any problems or, in extreme cases, early repayment of the loan or the realisation of the collateral.
However, a bank loan need not always be available, especially at the initial stages of development or in the event of the lack of the developer’s equity. Really cheap loans are granted to banks more for finished projects without any development risk. In addition, banks often do not fund projects at all before the construction stage.
Bonds can be used if the bank does not want to or cannot finance a certain part of the development due to risks. Bonds will make it possible to provide funds between the developer’s equity and a bank loan and can thus serve for more efficient financial leverage. They will supplement its own funds with another layer of financing so that the investor can obtain a bank loan.
Typically, bonds are more expensive than bank loans. Interest rates in real estate financing now range from 4 to 7% p.a. and an additional 1 to 3% should be added for distribution costs at the beginning if the bonds are sold through distribution networks.
If a bond issuer wants to offer its bonds publicly for sale (i.e. to more than 150 people outside of qualified investors), it must issue a prospectus, have it approved by the Czech National Bank and publish it on its website. The prospectus is an extensive document containing, among other things, detailed information about the issuer and its business, including the terms of the bond (the terms of issue).
Preparing and approving the prospectus usually takes 2 to 4 months. The Czech National Bank does not assess the quality or solvency of the issuer as the debtor but supervises that the prospectus contains all the information necessary for an investor’s decision to purchase the bonds, including a description of the risks associated with the investment. It is therefore definitely advisable to contact experts who are able to assist in preparing the prospectus.
Defining the business terms of the bonds (such as interest, maturity, interest payments, collateral, early repayment) is entirely up to the issuer, there are almost no restrictions imposed by law. However, the terms need to be set to make the bonds sufficiently attractive to investors and sell well. In practice, the offer usually needs a distributor who is familiar with the market and has access to investors.
Equally important is setting up the financing structure correctly. While the bank usually grants a loan to a project company, the bond reality is more diverse – bonds are directly issued by project companies in rather exceptional cases and for large developments; more often, they are issued at the level of holding or sub-holding companies or via a special purpose vehicle within the group. They then lend the obtained money to the projects, which function as the own funds of the project company that usually obtains a bank loan to finance the project.
Generally, the terms of the bonds are far from as strict as those of bank loans – the reporting obligations are usually minor, financial obligations are lighter or none, collateral is usually smaller in extent, and the issuer has a much greater degree of freedom in the project. On the other hand, changing the terms of the bonds over the course of their life (typically extending their maturity) is relatively difficult, as it requires the approval by a meeting of their holders. In addition, there is a risk that investors who do not accept the change at the meeting may claim early repayment of their bonds.
In our law firm’s experience, crowdfunding, quite a new phenomenon in financing, is becoming increasingly popular, particularly for smaller real estate projects.
Crowdfunding is a way of raising money from a larger number of minor investors who usually contribute a smaller amount to reach the target amount for the person interested in financing. There is a crowdfunding platform between the investor and the developer, which collects money from investors and provides it to the developer.
Compared to bank loans, a loan provided by a crowdfunding platform is not so “strict” in its nature and terms. This is because the platforms are not subject to such strict regulation (see below).
A number of crowdfunding platforms already exist on the market that provide financing for rather smaller projects worth tens of millions of Czech crowns. These platforms are also able to fund projects or stages thereof that are not financed by banks (or for which only partial financing is provided); their terms are usually looser and arranging financing is faster than for bonds and in banks. However, a rule also applies that security must be provided by mortgages over real estate or other project assets. A higher risk is also reflected in the price of the money, and such financing is therefore more expensive than bank loans.
With a correctly set business and legal model, crowdfunding platforms do not currently need to be subject to financial services regulation, which reduces their costs. However, this will change with a new crowdfunding regulation that is to take effect at the end of this year and will impose an obligation on many crowdfunding platforms to obtain a licence from the Czech National Bank: this may curb the currently growing market and make their financing more expensive as well.
A note in conclusion. Other forms of obtaining investments from the general public can be seen on the market, such as loans. However, this practice is illegal, it is considered the operation of an “illegal bank” or collective investment and is subject to heavy penalties by the Czech National Bank. On the contrary, bonds with a prospectus, various types of funds, especially qualified investor funds or the above-mentioned (correctly set-up) crowdfunding are a suitable tool for raising money from the public.
Authors: Václav Audes, Kateřina Slavíková
On 31 January 2022, the “new” Regulation (EU) No. 536/2014 of the European Parliament and of the Council of 16 April 2014 on clinical trials on medicinal products for human use and repealing Directive 2001/20/EC (the “Regulation“) will enter into force. After several delays (the launch was originally planned for 2015), the European Medicines Agency (the “EMA”) has confirmed to the Commission that the EU portal and the EU database, which were a prerequisite for the launch, are now fully functioning. At the same time, the EMA confirmed that the EU portal and database will be put into operation on 31 January 2022. As of this date, the Regulation will become fully applicable in all EU Member States.
The EU portal will serve as a single “entry” (communication) point for the submission of data relating to clinical trials. Henceforth, applications for clinical trials will be submitted through this portal only (and not to all local administrative bodies) and will be assessed through this portal. All data will be stored in a publicly accessible EU database (that is to avoid unnecessary duplication with the EudraCT and Eudravigilance databases, as expressly stated in the Regulation).
Besides applications for the authorisation of a clinical trial, sponsors will also submit through the EU portal, for example, notifications of the start, temporary halt or termination of a clinical trial in each Member State, as well as a summary of the results and a clinical study report.
Although it will be a public database, some data will be excluded from publication. For example, the personal data of data subjects or confidential information of a commercial nature, in particular with regard to the status of marketing authorisation of a medicinal product, “unless there is an overriding public interest in disclosure”.
It will be interesting to see how the concept of public interest evolves, as, particularly in the current pandemic era, COVID 19 medicinal products and vaccines are very often discussed in the media even before they are authorised. Other exemptions from disclosure will include, for example, confidential communications between Member States in connection with the preparation of an assessment report and data needed for effective supervision over clinical trials across the EU.
The Regulation aims to ensure uniform rules for conducting clinical trials across the EU. To this end, it introduces in particular an authorisation procedure based on a single submission via the EU portal and an evaluation procedure leading to a single decision. The submitted application will be assessed by all Member States concerned for their own territory in the light of specified aspects, providing that the decisive conclusion on the acceptability of the clinical trial will be made by the reporting Member State. The Member States concerned may disagree with this conclusion only on the grounds listed in the Regulation.
The Regulation is also intended to harmonise rules for the protection of subjects, including requirements for informed consent. In this context, the Member States are free to decide regarding the signatures of an incapacitated person and a minor who is capable of forming an opinion and assessing the information obtained.
The Czech legislature took advantage of the possibility for minors and, by an amendment to Act No. 378/2007 Sb., on Pharmaceuticals and on Amendments to Certain Related Acts (the “Act on Pharmaceuticals”), it included a requirement for the consent of a minor where it is appropriate to his or her intellectual and volitional maturity. In the Czech Republic, persons with limited legal capacity as well as other groups of persons in a “subordinate or dependent position” may only be subjects of trials under stricter and exceptional conditions (set out beyond the scope of the Regulation).
The harmonisation will also affect safety reporting. The Eudravigilance database operated by the EMA is now expected to allow for joint reporting when more than one investigational medicinal product is involved in a clinical trial. Only in the case of serious unexpected adverse reactions will the Czech Act on Pharmaceuticals allow the Czech State Institute for Drug Control (the “SIDC”) and the sponsor to enter into an agreement, subject to the requirements set out in the Regulation, under which the sponsor will report suspected serious unexpected adverse reactions directly to the SIDC (that will further report them to the EMA). It is open to consideration whether or not the conclusion of the agreement (leading to dual reporting) will be a practical benefit for sponsors that they will use after the Regulation comes into force.
Jointly with the Regulation, the Commission Regulation on good manufacturing practice for investigational medicinal products for human use[1], including detailed Commission guidance on the same[2], will also enter into force.
As for archiving periods, a clinical trial master file should, under the Regulation, be retained for 25 years after the end of the clinical trial, on media ensuring the completeness and legibility of the content throughout that period, so that it can be made available to the competent authorities upon request. This is expected to harmonise the fragmented implementation of the periods in the Member States.
For the Czech Republic, it should also remove the uncertain situation where, in 2017, in anticipation of the Regulation coming into force, the Czech legislature deleted certain provisions from the Act on Pharmaceuticals to avoid conflicts with the Regulation (which, however, is only now coming into force).
As a result, for the Czech Republic, the current Czech regulations used only the minimum 15-year period for the retention of identification codes, and the sponsors have already now resolved the often difficult issue of archiving periods for those 25 years applicable to all Member States in which the clinical trial took place. It should be added that the retention periods for pharmacovigilance and medical records are not subject to this harmonisation.
The Regulation will only apply within the EU. However, its principles regarding the rights and protection of subjects and the robustness of the data generated in the trial should also be complied with for those clinical trials conducted outside of the EU and are to be the basis on which an EU marketing authorisation application is to be filed.
Current clinical trials will be subject to a transitional regime. The Regulation provides that if an application for authorisation of a clinical trial was submitted before the effective date of the Regulation under Directive 2001/20/EC (the “Directive”), such clinical trial will continue to be governed by the Directive until three years after the effective date of the Regulation, i.e. until 31 January 2025.
If the application is submitted between the sixth and eighteenth month after the publication of the notice on the functionality of the EU portal in the Official Journal of the European Union, the clinical trial (of the sponsor’s voluntary choice) may be started in accordance with the Directive and will be governed by the Directive for 42 months from the date of the notice. Thereafter, clinical trials are to be fully subject to the regime of the Regulation.
[1] Commission Delegated Regulation (EU) 2017/1569 of 23 May 2017 supplementing Regulation (EU) No. 536/2014 of the European Parliament and of the Council by specifying principles of and guidelines for good manufacturing practice for investigational medicinal products for human use and arrangements for inspections.
[2] Detailed Commission guidelines on good manufacturing practice for investigational medicinal products for human use, pursuant to the second subparagraph of Article 63(1) of Regulation (EU) No. 536/2014.
Dear Clients, Business Partners, Colleagues,
It was exactly 20 years ago today when, together with four other colleagues and with the support of the international consulting firm Deloitte, we launched a new project and established our own law firm. From the outset, we have been a very ambitious start-up, taking inspiration from the best law and consulting firms in the world. Yet we never dreamed that 20 years later we would be the largest and most successful independent law firm in Central Europe, with nearly 500 employees, considerable international reach, a billion-dollar turnover, 2.5 thousand clients from all over the world, and all imaginable local and international legal awards in trophy cases decorating our offices.
Thank you to everyone who has been and is still part of this success story. Clients, business partners and refereeing foreign law firms whose high demands but also trust and extraordinary loyalty in working with us, constantly motivate us to take on new challenges and always be one step ahead of the competition. At the same time, I would like to thank all our colleagues who contribute to the firm’s success and continued growth and development through their unique talents, strategic thinking and creativity, but especially through extraordinary work and dedication, perfect teamwork and, last but not least, long-term loyalty to the company and superiors.
We highly appreciate the professional respect paid by our competitors, the leading Czech and Slovak lawyers, without whose high-quality collegiate contribution we could not have completed most transactions and other legal cases, and thanks to whose votes we have won numerous local and international awards.
I look forward to continuing this extraordinary story and believe that we are still a very young firm that, although a Central European leader, still has much to learn and that the greatest successes are yet to come!
I am convinced that constant development, growth, self-education and innovation will remain a hallmark of our law firm for the next 20 years at least.
Jaroslav Havel
Managing Partner
Experts from the law firm HAVEL & PARTNERS provided legal support to the British investment company CapVest in the Czech Republic in the sale of the European food producer Valeo Foods to a major global private investment company, Bain Capital Private Equity. The firm’s team was thus involved in another large-scale M&A transaction in the European region.
Valeo Foods is an Irish multinational producer of branded food and beverage products such as Jacobs, Rowse or Kettle. It employs over 4,000 people at more than 24 branches in Ireland, the UK, Italy, the Netherlands, Germany, but also in the Czech Republic. Czech legal advice to the British investment company CapVest on the sale of Valeo Foods to a new investor was provided by leading mergers and acquisitions experts – the firm’s partner Jan Koval and counsel Petr Dohnal.
Jason Rodrigues, partner at CapVest, said: “The sale of Valeo Foods represents the culmination of our strategy to build a major international food business through strategic investment and acquisitions of businesses and brands. Our team’s deep experience drove the sustainable growth of this firm. We look forward to seeing Valeo Foods continue to flourish under Bain Capital’s ownership.”
Bain Capital is the world’s leading US-based private equity firm. Having specialized in private equity and venture capital investments for over 35 years, it currently manages approximately $130 billion in assets. The acquisition of Valeo Foods is seen as an opportunity to leverage the firm’s long-term growth and to continue strengthening its position as a major international player in the food industry.
Authors: David Neveselý, Vladek Krámek, Jiří Nečas
Inheritance tax was abolished in the Czech Republic at the end of 2013. The reason for this step was the very low income for the state budget and uneconomical collection. However, in the current atmosphere of the upcoming elections and unprecedented budget deficits caused by the ongoing pandemic, the topic of new taxes is increasingly being raised in public debate. Inheritance tax is also being raised as a topic for such debate. The Organisation for Economic Co-operation and Development (OECD), of which the Czech Republic is a member, has now also called for its introduction and increased importance for state budgets.
According to a newly released OECD report[1] the member states’ approaches to inheritance tax vary widely. While on the one hand there are countries such as the Czech Republic, where inheritance taxes do not exist, there are also countries such as South Korea, Belgium or France, which in certain cases burden the estate with up to an 80% rate.
Despite these international differences, the OECD believes that inheritance tax has great potential in the current situation in all countries. Not only can it help to fill leaky state budgets, but it can allegedly be used to solve the problem of the ever-widening gap between the richer and poorer sections of the population. Moreover, the organisation argues that collecting inheritance tax is not administratively and financially demanding and it is relatively easy for the authorities to detect attempts at tax evasion.
Thus, especially in countries with lower taxation of capital income – which includes the Czech Republic – the OECD has recommended greater use of inheritance taxes. According to the presented recommendations, they should introduce a tax progression that disadvantages those who inherit larger amounts of property. On the other hand, states should not introduce greater differences in the taxation of heirs according to their relationship to the testator, so as to avoid the accumulation of wealth in a narrow range of persons. Similarly, alongside inheritance taxes, they should introduce gift taxes.
There are no specific legislative proposals for the reintroduction of inheritance tax in the Czech Republic at the moment. However, the very possibility of introducing inheritance tax may pose a major problem for family business owners, for whom planning the transfer of property is usually a long-term matter.
No one can predict exactly what tax and other rules will apply at the time of their death and how their descendants will be affected. In other words, an owner who drew up a will today in respect to particular property does not know whether their heirs will actually receive the entire property or whether they will not overburden them too much with the inheritance and the associated tax. As foreign experience has shown, the tax liability can be so high that descendants are forced to sell the family business or core family assets (such as houses), often quickly and not infrequently below market value.
In addition, inheritance tax is just one of the many complications associated with inheritance. Even at the outset, inheritance proceedings can be the cause of protracted family disputes. Even if the family passes this test and can still manage the family business together, the problems do not end there. Even a well-drafted will cannot prevent, for example, the gradual fragmentation of property over a longer period or the transfer of property outside the founder’s family.
Last but not least, inheritance law does not, of course, address the potential threat to the family business before the death of its owner – for example, as a result of a major health disability, divorce or an attack by creditors. This threat also applies to any family member who inherits the family business in the future.
So, what can a family business owner do if they wish to mitigate these risks not only during their lifetime, but also after transferring their business to the next generation? In practice, the family foundation historically proven in Europe and the trust inspired from the Anglo-Saxon countries are increasingly proving useful.
Both of these legal institutes make it possible to hold the family property safely and as a single whole for a long time. The management of the family business or key assets is always carried out according to the wishes of the founder, who also determines the rules on how the income from the property is to be distributed among the family. The timely and in particular, high-quality establishment of a family foundation or trust will prevent all kinds of threats and suspicions of circumventing the tax rules while they are not yet set.
Our law firm is ready to discuss all the risks and options with you and prepare a tailor-made solution to your individual needs. We have the largest team of specialists in the Czech Republic with extensive experience in family foundations, trusts and intergenerational wealth transfer. We have assisted in the establishment of several hundred family foundations, trusts, other instruments of the holding and protection of private assets, through which assets in the high tens of billions of crowns are protected.
[1] OECD (2021), Inheritance Taxation in OECD Countries, OECD Tax Policy Studies, OECD Publishing, Paris, https://doi.org/10.1787/e2879a7d-en.
The largest Czech-Slovak law firm HAVEL & PARTNERS again won the award for the best client services in the 9th year of the Law Firm of the Year of the Slovak Republic for 2021 and also won the first place in the Mergers and Acquisitions category. In the other 10 categories in which it competed, it placed among the best-rated law firms. It has thus confirmed its exceptional position on the Slovak and Czech legal market, which is also unique in Europe, and continues to be the most successful and comprehensive law firm in both countries.
“The biggest reward for a lawyer is a satisfied client. The victory in the Best Client Services category, which was decided by the level of satisfaction of our clients, is the most important award for us and a message that clients are extremely satisfied with our legal and tax services, as well as client care. It is also an appreciation of the top expertise of our lawyers, high work commitment and willingness to help in all circumstances. Thanks to their extensive experience and unique know-how, our law firm’s lawyers and tax advisors are able to effectively and successfully implement all individual client requirements,” said the firm’s founder and managing partner Jaroslav Havel.
HAVEL & PARTNERS also regularly receives awards in the category of client satisfaction in the Law Firm of the Year competition in the Czech Republic, and this year it has again achieved further success on the international scene. The prestigious British rating agency Chambers and Partners once again awarded it the best law firm operating in the Czech Republic in its international ranking of law firms Chambers Europe Awards. “I would like to thank our clients, because it is on the basis of their references that we have become the most popular law firm among clients both in Slovakia and the Czech Republic. Our thanks to them is also for entrusting us with both their business and purely private matters with confidence and motivating us to move forward constantly. It is also a beautiful gift for us for our 20th anniversary, which we are celebrating this year,” added Havel.
For more than 10 years, HAVEL & PARTNERS has been the market leader in the provision of legal services in the field of mergers, acquisitions, divestitures and restructurings in Slovakia, the Czech Republic and throughout Central Europe. The victory in the Mergers and Acquisitions category is the result of the firm’s systematically developing know-how in the field of transaction advising in which it has been specialising since its establishment in 2001.
Thanks to a unique network of contacts, the largest M&A team in Central Europe, consisting of 80 lawyers and 17 partners, and cross-border transactions, the firm has completed more than 750 transactions worth more than CZK 750 billion (EUR 29 billion) in the past fifteen years. “The year 2020 was very important for the firm in the area of mergers and acquisitions. We completed a record number of transactions, and in addition to our continued success in international rankings, we defended our position as the best law firm in the M&A category for the second time in a row in the prestigious Law Firm of the Year competition in the Czech Republic and now we managed to achieve the same in Slovakia. I also consider the triumph in the field of M&A in both countries to be a unique success and a confirmation of the growing position of our firm on the Slovak market,” added Jaroslav Havel. “We thank our clients for their trust they put in us to address strategic issues in the area of mergers, acquisitions, divestitures and reorganizations of companies that have a significant impact on their future business.” added Ondřej Majer, a firm’s partner co-responsible for M&A.
Based on the results of all previous years of the competition, HAVEL & PARTNERS is still the most successful and comprehensive law firm in Slovakia and the Czech Republic in terms of the total number of all nominations and titles. “These excellent results prove our versatility and the top quality of all our specialised teams, which I perceive as our great competitive advantage,” commented Jaroslav Havel on the overall results of the competition.
Law Firm of the Year is a prestigious professional competition evaluating the legal service of law firms operating in the Czech and Slovak Republics, organized by the publishing house EPRAVO Group, s.r.o. It was first announced in the Czech Republic in 2008, and since 2013 it has also been organised in Slovakia in cooperation with TREND weekly. For more information, click here.
HAVEL & PARTNERS provided comprehensive legal advice to the sellers in a major transaction in the area of information technology. The firm represented the owners of KOMIX, a Czech software company, on the sale of 100% shares in the company, which was acquired by Aricoma Group, the Czech Republic’s biggest ICT holding group, a member of the KKCG investment group.
Professional legal advice was provided to the sellers by a dedicated HAVEL & PARTNERS team led by Václav Audes (Partner), comprising Tomáš Navrátil (Senior Associate), Josef Bouchal (Associate), and Pavel Němeček (Of Counsel). In addition to M&A-specific legal advice, the team also handled the divestiture of KOMIX’s four subsidiaries. The transaction was subject to clearance by the Czech Office for the Protection of Competition; hence the expert team of HAVEL & PARTNERS was also assisted by Roman Světnický (Senior Associate), who was responsible for the competition aspects of the transaction.
For nearly thirty years, KOMIX has been developing customised software for e-government, health insurance companies, and large businesses such as Škoda Auto, Nestlé and Porsche Česká republika. Based on revenues from the development and sale of customised software, which will exceed CZK 500 million this year, KOMIX is one of the top 10 suppliers on the Czech market. In the past, the company was involved in projects such as the electronic sick note, biometric passports, and the population registry information system.
Thanks to its consolidation with the Aricoma Group, KOMIX will offer its existing customers a broader portfolio of services, while planning to gain access to new customers both in the Czech Republic and abroad jointly with the other companies within the group. “We believe that we are at the start of a fascinating story of digital transformation growing up from roots in the Czech Republic, and we wish to play an active role in that story,” said Tomáš Rutrle, managing director and initial co-owner of KOMIX.
By pursuing this transaction, Aricoma Group continues in its acquisitions with the aim of strengthening its position as a major European player in ICT and SW solutions. After the completion of the transaction, Aricoma Group will comprise 8 companies with consolidated turnovers in excess of CZK 8.5 billion and with more than 3,000 employees.
Source: EPRAVO.CZ Magazín (1/2021)
Elite Anglo-American law firms with comprehensive services and professional management were their role models. They started in 2001 in a small office, where they sat on boxes around a table. Their colleagues and friends told them that they would just be assisting in founding limited liability companies for the rest of their lives. But they made it to the top of Central European law firms. Three of the five founders of HAVEL & PARTNERS – Jaroslav Havel, Robert Nešpůrek and Marek Vojáček – continue to be active in the firm. Now, 20 years after it was founded, they recall difficult beginnings, their first contracts and the economic crisis, but also plan the future of the firm together. And what is their recipe for success?
Marek Vojáček: I knew Robert and Jaroslav from the international law firm Linklaters, where we all worked. I joined the firm after returning from Australia. One of the first persons they sent me to after joining was Robert Nešpůrek. They told me to learn from him how to keep a case file properly. We met Jaroslav at Linklaters about a year later when working on a transaction at an agricultural cooperative in southern Bohemia, where extruded bread was produced. We were selling it to some Norwegians.
Robert Nešpůrek: At that time, we found the firm with Ondra Petr, who also worked with us at Linklaters, and with our classmate Honza Holásek. Honza left the practice of law in 2014 and is now a senator. Unfortunately, Ondra Petr died tragically in the mountains 8 years ago, which was a huge loss for us, especially from the human viewpoint.
Robert Nešpůrek: Jaroslav came up with the idea of starting his own firm when I was on an internship at the London office of Linklaters.
Jaroslav Havel: At Linklaters, we also worked with Deloitte and learned that they were looking for someone to build a partner law firm for them. I saw it as a good opportunity to connect the idea of our own project.
Robert Nešpůrek: At that time, I rented an apartment from Linklaters near Liverpool Street in central London, I walked to the office and I liked it a lot. When Jaroslav called me and asked if I wanted to join a new firm, I was very much debating whether to go for it. But I was attracted by the vision of my own project and in the end this decided it. I remember when I announced my leaving at Linklaters, I had to pack up immediately and move out of the London apartment on Liverpool Street the following day.
Our idea was to build a successful law firm in the Czech Republic according to the British model, i.e., a firm that will provide the comprehensive legal services needed for business.
Jaroslav Havel: Many colleagues didn’t understand why we were leaving such good jobs. Some superiors even predicted that with this step we were doomed to just “establish LLCs” for the rest of our lives.
Robert Nešpůrek: At that time, feelings were mixed not only for our colleagues, but also for us, because the beginnings were not idyllic at all. We had one small office, and we were sitting on computer and file boxes. We lawyers shared one table, the other table was in the hallway and our assistant sat there. We left good posts in a top firm, went into uncertainty and there was actually no way back. All the more reason we were motivated to do everything to make the firm a success.
Marek Vojáček: Our idea was to build a successful law firm in the Czech Republic according to the British model, i.e., a firm that will provide the comprehensive legal services needed for business and will be an alternative to international law firms on the Czech market. The question was whether we would be able to inspire several other capable and hard-working lawyers with this idea, lawyers who would be able to put this very successful and functional model into practice with us.
Jaroslav Havel: We wanted to provide clients with a completely above-standard service from the very beginning, so it was clear that we needed a larger team. The goal was to get over ten lawyers quickly so that we could cover all specialisations and not have to send clients elsewhere, no matter what they were dealing with. That’s why we invested in quality and expensive lawyers from the beginning – they all came from large law firms. There were fourteen of us in half a year.
Jaroslav Havel: When we started, large Czech law firms had about 30 lawyers, the largest Linklaters, including tax advisors, had about 60 people. We thought that if our firm would have half of that number but we would have top lawyers and at the same time work very hard, we could do comparable work. In the beginning, we often worked all seven days a week.
Robert Nešpůrek: It was also beneficial for the start-up of the firm that we initially worked with Deloitte. And our great advantage was that we had experience from Linklaters, which was then a world leader in M&As. So, we had extraordinary know-how in this field. But it was important to convince clients that our knowledge is crucial.
Jaroslav Havel: I remember the beginnings when I went to an acquisition meeting to two major Moravian companies with a hastily made presentation. We had about a month’s history and I stood next to the established competitors in the tender for legal services. At that time, I had to convince the client that even though we were a firm without a history, we were significantly better than our competition in our specialisation in mergers and acquisitions. Fortunately, I succeeded in both cases.
Marek Vojáček: In 2003, the North Moravian banking institution Union banka went bankrupt, and we arranged a comprehensive contract for an insolvency trustee in Ostrava. It was a huge case on which a third of the firm worked, a demanding bankruptcy regulated by the Czech National Bank, in which there were tens of thousands of affected entrepreneurs. We basically lived in the Ostrava region for two years.
Jaroslav Havel: Union banka was then the fourth largest bank in the Czech Republic, basically everyone in the region had some involvement in it. Up to that point, in all similar cases, the satisfaction of creditors was up to 5 per cent and we managed to exceed 30 per cent, which was an extraordinary success compared to other bankruptcies. During our involvement there we established many contacts in the north of Moravia and gained a number of clients, so it was logical to open an office in Ostrava.
Today in Slovakia we comprehensively cover not only the needs of Slovak clients, but at the same time the Bratislava office is a gateway for Slovak clients heading to the Czech Republic.
Marek Vojáček: From the very beginning we had important Slovak clients that we served from the Czech Republic, such as Železiarne Podbrezová, for whom we completed acquisitions both in the Czech Republic and elsewhere in Europe. Gradually, however, we needed to be closer to our Slovak clients. At first, we tried to establish cooperation with one of the local law firms, but it didn’t work very well. In addition, the demand was constantly growing, so in the end it made the most sense for us to open our own office in Bratislava.
Jaroslav Havel: Today in Slovakia we comprehensively cover not only the needs of Slovak clients, but at the same time the Bratislava office is a gateway for Slovak clients heading to the Czech Republic. Thanks to our presence in Slovakia, we win a lot of contracts for Slovak entrepreneurs operating in the Czech Republic.
Robert Nešpůrek: Of course, we wanted to be closer to our clients there as well, however, even then we perceived Brno as a technological hub and a place with considerable potential for business development. In addition, Brno is also the capital of the judiciary, it houses the key courts and the Office for the Protection of Competition, as well as the Faculty of Law, where we can establish contacts with students.
Robert Nešpůrek: At that time, international transactions accounted for the largest share of our work. We had large contracts and good references, which started the rapid development of the firm. But with the crisis came a slowdown in the M&A market. At the same time, most of the firm’s income came from this field, and 80 per cent of these resources suddenly dried up. It was a very difficult period, but we just decided together to break it.
Jaroslav Havel: We restructured the firm extremely quickly, and we made every effort to change the portfolio of our services. We took it as a challenge and, unlike other firms that held back, fired people, cut costs, and waited for what would happen, we saw it as an opportunity. We didn’t want to fire people; we had a top team. We thought we had a lot of young talented people, so why should we fire them when we were searching so hard to find them?
Marek Vojáček: The crucial thing at the time was that we all agreed together that right in such a difficult time we needed to invest even more in the further development of the firm and business. Among other things, we radically reduced our own income below the level of some employees.
Robert Nešpůrek: At that time, clients left expensive international law firms. We saw it as a chance and wanted to take it. We sent out hundreds of proposals and offered a comprehensive legal service with an emphasis on the services that were most in demand at the time in connection with the crisis. We gained many new corporate clients, and, despite the crisis, we continued to grow and hire more new people.
Robert Nešpůrek: From the beginning, it was extremely difficult to get quality lawyers. But we were lucky that already then we were able to convince the best people on the market to join a small start-up law firm. With our growth and development, we gradually got into a completely different position. Today, we are able to easily attract the best professionals on the market, and for the last seven years we have been the most sought-after employer. We didn’t even dream about that 20 years ago.
Marek Vojáček: But it is a never-ending process. When an exceptionally talented professional appears, we need to make every effort to get him or her on our side of the barricade, because we will either work together and help each other, or we will fight with him or her for clients. It has always seemed wiser to me to put such a person next to me.
Robert Nešpůrek: From the beginning we did most things together, together we mainly took care of hiring new people. I also remember how I wrote the first profile of the firm “on my knees” in the summer on a holiday in the Lipno region in my cottage. Jaroslav was in charge of negotiations with business partners, strategic development, and financial management of the firm.
Jaroslav Havel: In the West, it is common for companies with a certain size to automatically have professional management in areas such as HR, finance or marketing and business. But it was not a custom in the Czech Republic. Lawyers often didn’t recognize other expert professions and felt that they were doing their best in managing the law firm. The law firms on the local market were rather smaller, with three or four lawyers joined together and they all decided on everything. However, our model was British law firms with professional management, so with the gradual growth and development of the firm, we took over that model.
How do you maintain fast decision-making dynamics at HAVEL & PARTNERS despite your size?
Jaroslav Havel: Paradoxically, we were the least flexible in the beginning, when six partners sat at the table and we all decided on everything. Gradually, we came to the conclusion that we had to speed up and simplify decision-making and set competencies so that decisions are always made by the one who best understands the given things, systematically educates himself and improves in them.
Marek Vojáček: If a company starts to lose its business drive and starts to look more like an office, it can never be successful in the long run. That is why we put emphasis on a fast and flexible decision-making system, which has proven itself to us for many years.
Marek Vojáček: That it is important not to procrastinate with decisions that are uncomfortable. If something is established in the firm, but it demonstrably does not work, it is important to solve it as soon as possible. Only then can the firm move on.
Jaroslav Havel: I totally agree. In our firm, this mainly concerned the HR area.
Jaroslav Havel: We want to constantly improve. We conclude each year by reviewing whether we have improved, in what and in what not, and then look to the future to see what we can work on. We want to continue to be an innovative firm that is a long-term strategic partner for clients in their business. Our goal is to protect and develop our excellent reputation and the values associated with HAVEL & PARTNERS, such as an individual approach, comprehensive practical solutions, respect, trust, and loyalty.
Marek Vojáček: We also want to continue working with the best lawyers on the legal market and always have something to offer them, because the legal profession is primarily about people.
Robert Nešpůrek: We have always been inspired by large renowned law firms from the so-called Magic Circle. I wish our firm to be one of them and to be a permanent part of the European legal elite. As individuals we will not be here forever, and it would be good if the firm also continued afterwards. If it can continue to build on the first two decades into the future, it will be a great success.
Author: Štěpán Štarha
Source: CEE LEGAL MATTERS
Is it possible to perceive some elements of the corona crisis positively? And is it possible that changes could take place that would have a positive effect on the Slovak legal market? I may be too optimistic, but I am convinced that the answer to both questions is “yes.”
Although lawyers have been talking for many years about how they have been innovating their provision of legal services, the reality is, to be honest, much more plain. This stands out the most when looking at last year. In a single year, many law firms made larger leaps in innovation than they had in the previous ten years. During my practice, at the end of the day, we always provided legal services classically, as we had learned and read in wise books. But the corona crisis gave us the opportunity – or even forced us – to get off the beaten track and try something new.
Last March, literally overnight, we had to move from our offices to our homes. Instead of a period of careful trial and error, overnight we learned how to communicate only remotely, and digitally. We traded coffees and lunches for online seminars and podcasts and learned much more about how to provide clients with the real value and content that catches their attention and helps them. As in every crisis, clients were impatient and needed quick, practical advice. And all this against the background of the fact that we were at home with the rest of our families, learning how to work and function together.
Last year I learned more than in the previous five years put together – better time management, how to work remotely, how to use electronic tools, and much more. And we still have a lot to learn; for example, how to keep team spirits high when we cannot meet in person for several months at a time. Every cloud has a silver lining, and the horrific events of last year gave everyone the opportunity to learn many new things. So yes, at least in terms of personal development and innovation in the legal business, the corona crisis has had some positive effects.
And what about the Slovak legal services market as a whole? Have there been positive changes against the background of the corona crisis?
With a good dose of self-reflection, I must say that in Slovakia, lawyers and the entire judicial system do not have a good reputation. The reasons for this stem from a number of corruption cases that were talked about in whispers for many years and which have surfaced over the past year, resulting in prosecutions of the former attorney general, two previous police presidents, and heads of anti-corruption units, and a number of judges in handcuffs. And, of course, a number of lawyers were involved as well.
While human lives are threatened and our economy is suffocating, a fundamental purge of the Slovak legal system is happening. As a matter of fact, these events should make the Slovak business environment more attractive. It should also have a positive effect on the Slovak legal market. Unfortunately, in Slovakia, lawyers were often perceived as so-called “arrangers” – a sad generalization, damaging the reputation of all decent lawyers. I will never forget the first (and unfortunately not the only) client who told me “Mr. Starha, you are excellent attorneys, and though you will do a perfect job, you can’t help me here.” No need to think too much about what he meant. I believe that thanks to the purge of the Slovak legal environment, such remarks will become a faint memory.
So yes, I am convinced that in the shadow of the corona crisis very positive changes in the Slovak legal environment are happening. Of course, it’s not all coming up roses, and many things, such as some not-so-well-prepared legislative proposals, deserve criticism. Overall, however, I see a positive shift, and I believe that this is a good opportunity for all good and decent attorneys. And to be ready for it, I am going to keep looking for the answer to the question of how to keep our team spirit high, when we cannot see each other in person.
By Stepan Starha, Partner, Havel & Partners Bratislava
This Article was originally published in Issue 8.2 of the CEE Legal Matters Magazine.
HAVEL & PARTNERS, the largest Czech-Slovak law firm, has again marked an international success, as it has been rated the best law firm operating in the Czech Republic in 2021 in the international ranking of law firms by Chambers and Partners, a prestigious rating agency based in the UK.
“The ratings provided by Chambers and Partners are considered the most prestigious international awards for law firms, which are not easy to win, and even more difficult to win several times in a row. That is why we highly appreciate having won the award again. Let me thank all of my fellow lawyers, who – working exceptionally hard, as excellent team players, with profound knowledge and loyalty to our clients and our law firm, contributed to our law firm winning the international award again. Let me further thank our clients and business partners for their trust, as it was their references in particular that made this great success happen. However, our thank-you also goes to our competitors and fellow associates from other prestigious law firms on the market for showing their respect. They also decide about who receives these awards,” said Jaroslav Havel, the managing partner and founder of the law firm, about another success.
“The achievement is both another nice present for our 20th anniversary and motivation to constantly move forward and work on ourselves in order to continue to provide clients with the best and most comprehensive services on the market as their strategic and long-term business partners,” said Havel.
Based on independent evaluations and comments by clients and law firms as well as an assessment conducted by over 130 analysts, Chambers and Partners annually issues rating publications, mapping the best law firms around the world since 1990. On 22 April 2021, this year’s results of its prestigious Chambers Europe Awards were announced online, the same as last year.
