In The Corner Office, we ask Managing Partners at law firms across Central and Eastern Europe about their backgrounds, strategies, and responsibilities. With 2023 marching to an end, we looked ahead and asked about strategies for next year: As the budgeting period is around the corner, compared to 2023, what are the main budgeting lines you expect to increase for 2024 and why?
Panagiotis Drakopoulos, Managing Partner, Drakopoulos: When we discussed budgeting for 2024, we primarily decided to increase our spending on investments in new hires, as well as IT infrastructure and software.
In an effort to manage growth, we opted to focus on making sure that our firm will continue to operate seamlessly and in line with the latest developments in technology, while at the same time handling increased workloads in a comprehensive and responsive manner.
Furthermore, we will be investing in completing an ESG compliance program across our offices, not only because it is the right thing to do, but, rather pressingly, because certain clients are making ESG compliance a prerequisite to award mandates; we expect this trend in client behavior to become the norm in the not-so-distant future, trickling down from large to medium and event smaller accounts as well.
Vladimir Bojanovic, Managing Partner, Bojanovic & Partners: Effective budgeting will help you plan, strategize, and shift as you need to, helping you grow a financially healthy law firm. I often like to say that it is not about spending the money but, about whether the money is well spent. Compared to 2023, BOPA as well as our legal network Adriala will mainly increase the marketing budgeting line in a manner to support the firm and network revenue strategies along with the individual partners’ business plans.
From my extensive experience, the business side of law is just as important as legal practice. There is no doubt that all lawyers from our team are continuously striving to improve their knowledge so as to be able to provide premium legal assistance to the most prominent and sophisticated international clients. But in 2024, besides that, along with my partners from BOPA and Adriala, I would like to further enhance the brand visibility at an international level, which, in turn, we expect to lead to heightened client loyalty and trust, increased lead generation, recruiting successes, and ultimately, higher revenue.
Kostadin Sirleshtov, Managing Partner, CMS Sofia: There are several strong tendencies, which we are planning to capture in the upcoming budgeting efforts. CMS Sofia has completed its strategic hires, but we are planning fee earners’ promotions for 24/25 and therefore one of the highlights is the increased HR costs as a result of promotions.
IT infrastructure is another strategic spend that we are planning for 24/25 at CMS Sofia given the increase of the office to around 75-80 people and the increased needs of our IT department. We are completely refurbishing our IT room and changing equipment.
We have also planned some increased socializing costs for all staff – following the end of the pandemic it is essential that we meet more regularly in an informal environment and bond together, especially given the increased number of new hires in the CMS Sofia office.
Miroslav Dubovsky, Country Managing Partner, DLA Piper Czech Republic: We continue to invest in our people, as we have done in recent months with the appointment of two new Partners – Michal Hink to strengthen our real estate practice, Tomas Scerba to strengthen our IPT offering – and the addition of a Counsel to our banking and finance practice, Leo Javorek.
More broadly, DLA Piper is committed to investing in and developing the careers of our lawyers. This includes reinvigorating our international development and secondment opportunities. Many people join DLA Piper because we are a global law firm, and they want to gain global experience. But the pandemic has dramatically reduced travel. We are devoting significant resources to reinvigorating this important part of our business. And we’re also working to ensure that we have a development plan in place to support career growth and ambition.
Istvan Szatmary, Managing Partner, Oppenheim: When considering our budget for 2024, we will be carefully evaluating the key areas where we anticipate increasing our allocations. The focus here is on strategic investments that will have a long-term impact on the operational environment, performance, and profitability.
Our IT infrastructure is a major contender for increased funding. The “why” behind this decision is clear. In today’s rapidly evolving business landscape, technology plays a critical role. To remain competitive and adaptable, we need to invest in our IT infrastructure. This investment will ensure our systems remain agile, secure, and capable of accommodating emerging technologies. As part of the IT infrastructure, we plan to allocate more resources to software and digital tools. In an increasingly digital world, optimizing our operations and enriching customer engagement through innovative software solutions is critical to our success. These investments are driven by our proactive desire to shape our future, ensuring we’re not just reacting to external factors but actively positioning ourselves for sustained success.
Tomas Bagdanskis, Managing Partner, Ilaw Lextal: Lawyers are in a unique position. They tend to be high-income earners but work long hours which leaves them little time to devote to planning their finances. Our focus for the coming year will center on three main areas: our people (keeping and attracting new lawyers); marketing and business development; and IT tools that would help maintain administrative workflow and further improve the speed and quality of our client service. We see marketing as a necessary expenditure for promoting our law firm. This includes questions related to branding, building a new website, etc. Furthermore, we’ll focus on meetings with clients, and expanding our network locally and internationally. Most digital marketers operating in the legal industry recommend spending between 2-18% of your firm’s gross revenue on marketing. I think we will spend anywhere between 7-10% of our gross revenue. There are no plans for further costs related to our office space. The same applies to other expenses, such as hardware.
Nenad Cvjeticanin, Managing Partner, Cvjeticanin & Partners: We plan to focus on several budget lines for 2024. (1) Increased hires: we intend to hire additional attorneys and one paralegal so we can better distribute workloads, reduce overtime costs, improve client service, and allow the firm to take on more cases, thereby increasing revenue. (2) Legal practice management software: we have office management software, but we intend to upgrade it to facilitate streamlined case management, time tracking, billing, and document management. This will enhance efficiency, reduce administrative errors, and ensure better compliance, ultimately leading to increased billable hours and revenue. (3) Business development trips: essential for building and maintaining client relationships. Meeting clients in person fosters trust and can result in more referrals and repeat business, ultimately driving revenue growth. (4) IT infrastructure upgrades: we use the Microsoft Office 365 clouding system because we believe it offers a high level of data security and operational efficiency. Upgrading hardware, software, and cybersecurity measures can prevent costly data breaches and downtime, ensuring uninterrupted client service and trust. Finally, (5) continuing legal education and training: regular CLE and training programs keep attorneys updated on legal developments and best practices, so we intend to invest in education in order to improve specialization.
Borivoj Libal, Managing Partner, Eversheds Sutherland Czech Republic: In the upcoming budgeting period for 2024, we anticipate a deliberate focus on strategic investments that would reinforce Eversheds’ growth trajectory in the Czech Republic. Notably, the main budgeting lines that we want to prioritize include increased hiring and training initiatives, advanced software integration, and strategic business development activities in our core and niche legal areas. Firstly, increasing our workforce is essential to effectively meet the growing demands of the market and maintain our competitive edge. We are planning to increase our team by at least 15% in the following year. Moreover, following recent investments into document management systems, we aim to invest in even more advanced software solutions, particularly to streamline client communication effectively. Also, strategically allocating resources for PR activities, particularly in our legal core and niche disciplines, will be crucial in enhancing Eversheds’ brand visibility and establishing a strong industry presence in the local market. These strategic investments, in my view, would serve as the cornerstone for our continued success and resilience in the dynamic business landscape of 2024.
Tarik Guleryuz, Partner, Guleryuz Partners: With 2024 around the corner, we do have a lot to be excited about with plans to solidify our growing position in the market while also seeking to reach new horizons making use of novel ideas and technologies. In this respect, one of the items we plan to invest significant financial and human capital into in the coming years is the development and adoption of new legal technology making use of artificial intelligence technologies. We have had projects and collaborations in the pipeline for quite a while, but with the recent surge in both supply and demand, we have also increased our efforts in the area.
Also, in line with the same goal of broader horizons, we will be seeking to scale up our work further, following the trend of growth we have managed to follow in the last few years. In this context, we will be making significant investments in international client outreach and business development in Europe and surrounding markets. We expect this will result in an even more diverse client portfolio for us, and provide a high return as we will be able to establish ourselves as a regional or even a global player in the coming years.
Octavian Popescu, Managing Partner, Popescu & Asociatii: Regarding the budget for 2024, our increases will target key points we consider essential to growth. As I mention every time I have the chance, at Popescu & Asociatii we put our team first. People are the most important pillars for building a solid team and achieving clients’ trust and outstanding results.
Then, digital transformation and cybersecurity represent fundamental areas to invest in permanently as IT technologies continue to evolve and help many industries, with an amazing speed.
On the other hand, in an increasingly technological world, greatly accelerated by the pandemic, I believe we all feel the need for face-to-face meetings. As a team, we work from the office and we encourage essential meetings to be offline. Valuing permanent education and training that require constant involvement and budget, we will continue to invest in physical attendance at various events and team buildings, participations that bring more added value than a simple online meeting.
Definitely, our team and our results represent our business card. However, we also need to share our achievements, to be present at important events. In this regard, our budget will be increased as we aim for high standards and great objectives that require time, quality, and the right budget.
Bernhard Hager, Managing Partner, Eversheds Sutherland Slovakia: Our Slovak budget for 2024 accounts for increased costs for the operation of the office (people, energy, IT) and increased fees. However, we do not expect that fee increases will keep pace with the increase in operational costs. We also reserved some money for the implementation of the NIS2 Directive. Although our law firm is not directly impacted by the NIS2, many of our clients have to comply with it and, as their supplier, we have to have certain IT standards. At the same time, Eversheds Sutherland has initiated 1Europe, an ambitious program to increase resilience against cybercrime. This requires investments above the usual IT updates.
Further, we earmarked additional money for recruiting, training, and BD. Digitalization, ESG, supply chain, and resilience (energy, cybercrime, political disruption) are the key words, and we invest in our people and look for new people in order to excel in these new areas of law.
This article was originally published in Issue 10.10 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.