Slovak Bar warns City firms

UK and US firms in Slovakia have been told to restrict the advice they give and tone down their marketing activities if they want to avoid criminal prosecutions for practising illegally in the country.A dispute has blown up between the Slovak Bar and six foreign firms - City firms Linklaters & Alliance and Allen & Overy, US firms White & Case, Squire Sanders & Dempsey and Altheimer & Gray, and Austrian firm Weinhold & Partners (see [2000] Gazette, 9 March, 8).The Bar contends the business consultancy licence under which foreign law firms are allowed to open in Slovakia does not permit the provision of any legal service; it just allows advice on 'economic matters'.

Marketing materials should reflect this, it says.It is thought that both Clifford Chance and CMS Cameron McKenna are actively considering moving into Slovakia, while others, such as Freshfields and Lovells, are also likely to be interested.In a recent meeting, Slovak Bar leaders told a Law Society delegation that they had evidence that foreign firms were breaking the Slovakian Act on Advocacy 1990 by providing legal advice.They had passed the basic information to the General Prosecutor's Office but had not yet supplied the evidence because they said they did not want to see prosecutions.

They just wanted to firms to realise the Bar was serious.It is understood that local concern over White & Case's victory in a tender to advise on bank privatisations in Slovakia triggered the current problems.The Slovak Bar is in the process of drafting an updated Act on Advocacy that would allow foreign law firms to practise more freely, but this position has come under attack from members of the Bar.

The earliest this law might come in is 2001.The Society has appealed to the European Commission and the British Embassy in Bratislava for help, mainly on the grounds that the threat of prosecution and restrictions on firms breach the European Association Agreement, which governs Slovakia's accession to the European Union.

The Society is pushing to have the issue on next month's meeting of the Association Council, which oversees the agreement.Hugh Owen, the only English solicitor based in Slovakia and joint head of Allen & Overy's office, said 'things have calmed down a bit' into an 'uneasy silence'.

He said a combination of 'economic, political and legal pressures' are likely to alleviate the problem as restrictions on foreign law firms' activities militate against the government's extensive privatisation programme.He said the Slovak Bar might require some minor concessions - on such matters as the name the firm uses to practise in Slovakia - as it moves towards this.Mr Owen said he was 'very surprised' that other top City firms have not yet opened in Bratislava, and while there is more than enough work to go around, he felt Allen & Overy had a 'head start' by being there first.Neil Rose