Perry V. Zizzi, who leads Dentons’ local office, talks about the legal market trends and evolutions, and how the firm is adapting to the new reality in a new BR exclusive interview.
Which sectors have seen most activity in Romania in 2020?
It has been an unusual year. While the office sector of real estate has cooled (aside from one notable transaction in Romania, i.e. the AFI acquisition of the NEPI portfolio, on which we advised), logistics remains an attractive area. During the past year, Dentons has advised on both acquisitions and financings of logistics properties (involving CTP, Atrium and others). Notwithstanding a tightening of both export restrictions and rules for transfers of farmland, agricultural deals are in full swing; we advised KC Agro on what turned out to be the largest agricultural deal of 2020. Energy – especially renewables – have seen the most interest since the gold rush of 2011-2012. Finally, tech continues to be an increasingly important sector for Romania, with UiPath and others blazing the path forward to global prominence.
What have been the most significant changes in law in Romania this year?
Aside from all the Covid-related law, many crucial improvements might have slipped by unnoticed. The most important change was the elimination of the senseless 30-day waiting period for transfer of shares in a limited liability company. Prior to 2011, this period did not exist; title transferred immediately when parties signed their sale-purchase contracts. The waiting period added much uncertainty to transactions, especially acquisitions involving multiple target companies, as it gave alleged creditors the chance to object – usually, as it turned out, abusively. Dentons was the only major law firm to call for the repeal of this waiting period, as did the Netherlands-Romanian Chamber of Commerce, which I proudly serve as a Board member.
In addition to that change of law, Parliament eliminated the prohibition on owning 100% of the shares of more than one limited liability company, as well as the prohibition on a limited liability being owned 100% by a limited liability company that was in its turn owned by a sole shareholder. Without these strictures, it is much simpler and less costly to structure an acquisition.
How did Dentons Romania manage during the past year?
Without doubt, we emerged stronger, more agile and with greater flexibility in how we serve clients. Our attorneys performed admirably, staying on top of the ever-changing Covid measures that were introduced literally overnight. They kept close to clients and provided boardroom level consultancy. And they remained integrally connected to our more than 10,000 colleagues around the globe, benefiting from a broad view of global and regional trends and activity, as well as insights into client needs.
As a matter of fact, in spite of the economic crashes that shook the planet, we still grew in key practice areas of finance, M&A, real estate, competition & compliance and dispute resolution, with key hires from the market.
What M&A deals has Dentons Romania been involved in during 2020?
Dentons has one of the strongest M&A practices in Romania, and last year we advised on several high-profile transactions such as KPS on its acquisition of the Lufkin rod solutions business from Baker Hughes (https://www.dentons.com/en/whats-different-about-dentons/connecting-you-to-talented-lawyers-around-the-globe/news/2020/may/dentons-advises-kps-on-acquisition-of-lufkin-rod-lift-solutions-business-from-baker-hughes). We also advised on several ongoing matters such as the purchase of a financial services firm and what will undoubtedly be the largest agriculture deal of 2021 and the largest warehouse acquisition of 2021. Finally, we advised on the aborted deal by which Nexans was to purchase the cable manufacturing business of Cenergy.
You have been Managing Partner of Dentons Romania for almost two-and-a-half years. What were the milestones during this period?
Our office has a storied history. Founded in 1997 as the Bucharest office of Altheimer & Gray, we later merged with pan-European firm Salans and finally entered a four-way tie up in 2013 to become Dentons, the largest law firm in the world. In the early years through the late 2000s, we had a passion for advocacy and promoting good governance and international best practices. Our first Managing Partner, Obie Moore, is a legend who worked tirelessly at improving the business climate in Romania at a time when many doubted that European Union accession was even possible. We have now returned to our roots and Obie’s shining example. The success we had in working to repeal the 30-day notice period for transfer of shares in a limited liability company is an example.
Since I became Managing Partner, we have entered the phase of what I like to call Dentons Romania 2.0. It is a reset in most respects – from building a strong team, to speeding up digitalization and improving efficiency, so that our clients reap the benefits.
As a first step, building on our already strong team, we have reached out to the market to attract top talent. We started out by creating a Capital Markets practice, led by Loredana Chitu, who is one of the top five cap markets attorneys in Romania. Immediately following on that, we grew to have the largest banking practice in the country: 14 attorneys with local, regional and global experience and the only firm with capabilities on the ground in Romanian law, English law and New York law, including market leaders Simona Marin and Simon Dayes. We next pivoted to M&A and hired six attorneys including Partner Cristian Popescu. Simona now leads our Banking practice, while I took the helm of our M&A practice. We have also tapped Cristina Daianu to run our Venture Tech Practice, while Raul Mihu has taken on Compliance in addition to his longstanding leadership of the Competition group.
Furthermore, we have prioritized our people. Together with Dentons Europe region, we launched in 2020 our career playbook. Knowing that lives do not all need to follow the same path, we envision a firm in which an attorney or a business services employee can achieve satisfaction in one’s career by seeking traditional advancement, or by working part time, living in a different location from where one’s office is located or taking a sabbatical for personal fulfilment. Our office also, for the first time ever, will be sending qualified attorneys for secondment in other Dentons locations.
How did Dentons cope with the acceleration in digitalization?
We are the most technologically advanced law firm in the world. We therefore knew that our own office needed a refresh of equipment and apps, as well as a compelling vision. For us, everything is digital – because that is the future and Dentons is the law firm of future, now. Legaltech now plays a role in document production and due diligence, with our offices participating in pilot programs of new software. We allocated iPads to attorneys and business services employees in order to discourage printing and encourage notetaking, marking up documents and reviewing docs in a more modern, useful way that at the same promotes one of the most cherished values at Dentons: collaboration.
Dentons is a founding member of the Romanian Diversity Chamber of Commerce, how did this come about?
We are very proud to be pioneers in the matters of diversity. Together with Accenture, Fokker, Mega Image, Kaufland, Orasul Meu and Visa, as well as our clients Raiffeisen Bank Romania and ING Bank, we launched in 2020 the Romanian Diversity Chamber of Commerce (RDCC). Inspired by the principles of the European Union-sponsored Diversity Charter, the RDCC is the first of its kind in the world and seeks to promote the economic enfranchisement of women, LGBTQ+, Roma, persons with disabilities and other disadvantaged groups by developing business skills, contacts and opportunities within the framework of diversity in partnership with like-minded organizations.
What do you foresee for Dentons and for Romania in 2021?
At Dentons, we continue to grow and expand our practice offerings, with M&A, litigation, TMT and tax being priorities for 2021.
I am also optimistic when it comes to Romania’s economic outlook. With a new administration in Washington, we anticipate a spike in interest in Romania among American investors. This is because Joe Biden has consistently prioritized Romania and the rest of the region. Romania also is becoming increasingly pivotal to the NATO alliance. Our own expertise and ties to the U.S. (myself and several others in the office who are citizens or dual-qualified as U.S. lawyers) will position us as a top choice among these new investors, who usually prefer lawyers well-versed in their cultural, legal and business expectations.
And with a new administration in Bucharest, too, there is ample opportunity for legal reforms that will make Romania more competitive and introduce or reinforce international best practices. As a member of the board of directors of the Netherlands-Romanian Chamber of Commerce, I have already been working closely with the business community and scored a notable success in getting repealed the 30-day notice period for transfer of shares in a limited liability company.