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30 Years Young and Still Innovating Law

A law firm with a 30-year tradition of innovation and education this fall celebrates its foundation in Hungary, back in the days of the “Wild, Wild East”, even as it looks forward to ways in which new technologies and apps (many developed by Baker McKenzie) impact how lawyers are able to service their clients.

Zoltán Hegymegi-Barakonyi, managing partner of Hegymegi-Barakonyi és Társa Baker & McKenzie Ügyvédi Iroda.

“We have more than 20 apps, 16 of which are really unique,” says managing partner Dr. Zoltán Hegymegi-Barakonyi. Indeed, internet marketing service company Fliplet named Baker McKenzie as one of the top three law firms in the mobile app field. But before we get to today and the future, perhaps we should rewind.

When what is now Hegymegi-Barakonyi és Társa Baker & McKenzie Ügyvédi Iroda was established in 1987, Hungary was a very different place.

“Baker McKenzie made a very brave move to open behind the Iron Curtain. None of the other big firms were here then,” the managing partner points out. 1987 was just a couple of years before the fall of the Iron Curtain, but while the stresses and strains on the Eastern Bloc were clear to see, no one could have predicted at that time that things would unravel with the speed that they did.

Baker McKenzie was founded in America in 1949, and had a natural interest in Hungary: Lajos Schmidt, a Hungarian immigrant who spoke Spanish and German but no English when he first arrived in the States, had made partner at Baker McKenzie by 1952, and was its chairman from 1966-71.

Leading Legal Lights

“Russel Baker, the founder, was encouraging Lajos to work in Hungary from the 1960s, I think. By the 1980s Lajos was quite familiar with the scene here, and had good contacts.”

The firm originally opened in a flat Schmidt had rented. “There was one phone line, and sometimes it took hours to send a contract to the client via fax.”

Hegymegi-Barakonyi joined in 1994. The man who became managing partner says he chose Baker McKenzie because around half of its then 16 attorneys were Hungarian. These were some of the leading names in the local law scene, including János Martonyi and Géza Kajtár; also there then were two other principals of today’s firm: Pál P. Takács and Ines Radmilovic.

“I had studied in the States, where the firm had a very good reputation. In Budapest, it was quite sizeable with several senior Hungarian attorneys. I thought it would make for a good learning environment.”

That idea of Baker McKenzie as a proving ground for legal talent clearly still holds true. Many of the senior people at leading law firms in Budapest today have learned at least some of their craft while at the 30-year old pioneer.

And from the start, they were using cutting edge technology at the firm. “Baker McKenzie had started using computers in the 1970s, and had made a lot of progress with them by the 1980s. But markets were not global in the way they are today, and systems did not match up or always talk to each other,” recalls Hegymegi-Barakonyi.

Innovation and IT

“I mentioned that when the office opened they only had one line. By the time I joined we had a dedicated fax line and 10 phone lines – and you needed them. There was the MATÁV privatization, the Ford plant at Székesfehérvár, Pepsi was acquiring a leading natural water company; we had three or four big transactions running in parallel. It was an incredible workload, and all done without any of the technology we use today. Just the due diligence in those days was  colossal.”

Work that would take an associate a whole day to process 25 years ago can now be done in 30 minutes, says Hegymegi-Barakonyi. But the tech sector has also grown massively as an area of employment.

“Innovation and IT are also important in our work as lawyers, because these days you cannot imagine any major project without some IT or related issues. We work for some of the biggest IT companies in the world; even the ‘simplest’ question presents data protection or other IT law related issues.”

Baker McKenzie’s apps and software are available for clients in some cases, and lawyers in others, and handle everything from the relatively simple (contract templates), to the deeply complex. There is an internal app for checking your workload capacity, both today and four weeks down the line, for example. For clients, there is an app tracking what is happening with your global IP management, or to help you if you suffer a dawn raid. It will even put you in touch with the nearest Baker McKenzie expert so you can get on-site assistance as soon as possible.

Hegymegi-Barakonyi is not one of those doom-mongers who believe that artificial intelligence will one day mean the end of lawyers. The apps and technology are just the latest elements in the tool box, he says. Ultimately, they still need to be operated by a skilled professional with the experience to know how best to interpret the results. “We use the technology to become more precise, quicker and cheaper; that is how simple it is in today’s rapidly changing legal market.”

And competition is fierce, not least because clients have become very sophisticated and at the same time very demanding. “Ten years ago, compiling a compliance report might take several weeks. Nowadays the clients want it in a week. And they don’t want to plow through the whole report; they want to know about any ‘red flags’. It requires the same amount of legal work, but you no longer have three weeks to prepare it; you have three days.”

More Demanding

He dates that change in client mindset to the recent recession. “The crisis of 2008-9 had two results: clients became more concerned about budgets and more demanding about what they got for what they paid. Where technology can help is in satisfying the need of the client.”

If the apps are a visible symbol of the innovative approach of Baker McKenzie, they also illustrate another philosophical trait of the company: Design Thinking. “We are not trying to find problems just so we can innovate, but looking at what clients actually need. Where clients have a problem, what can be developed to help solve it? Innovation has become a vital part of what we do.” (See box for more details).

But it isn’t just the clients who like the apps, of course; so too do the millennials. “The new generation like to be mobile; We like them to be mobile. They are willing to work, but also want to strike a balance between their professional and personal lives. You need technology to help with that.”

Mobility doesn’t just refer to the ability to work remotely. With 77 offices to choose from, the law firm also encourages its associates to experience different countries and cultures. “These days with video conferencing you do not need to meet in person, but we still bring our people together to build networks and human connections. We also run associate transfer programs across the whole firm. They are getting shorter in duration but more frequent, and are sometimes very client or project specific.”

Another key is to make the work as interesting and challenging as possible. The law firm has long since moved to using practice groups, with teams of cross-practice experts coming together to work on each deal. Social outlook is also important. Baker McKenzie Hungary was voted “Pro Bono Law Firm of the Year” by the Hungarian Bar and PILnet, the global network for public interest law.

Innovative in Finding Talent

All of that helps with retention, but even hiring has changed. “Several years ago, if you were talking about a multinational law firm like Baker McKenzie, the talents would find you. Nowadays there is incredible competition for these talents, so you have to be innovative in how you find and hire them,” Hegymegi-Barakonyi explains.

There are six- or eight-week work experience placements, where the students can benefit from the good international atmosphere and learning opportunities at the firm, but there are also grander schemes.

“Baker McKenzie has a global scholarship program where ten students in their last year of studies get the chance to work for six weeks in the country where they study and six weeks in another country. Each office submits its own candidates; there was a Hungarian student among the winners in each of the last three years, which demonstrates that we have very good talents in this country, who can be successful in today’s international legal market.”

From left: Zoltán Hegymegi-Barakonyi, János Martonyi, Ines Radmilovic, Géza Kajtár, Pál P. Takács.

Innovation Program Reimagines the Business of Law

In February of this year, Baker McKenzie announced it had become the first law firm to apply Design Thinking on a global scale. A global innovation program was announced to address changing client needs, new industry dynamics, and the broader role of digitization across the economy. A cross-practice Innovation Committee ensures a firm-wide approach to innovation is incorporated into every aspect of the business’ global operations.
“Applying Design Thinking to client service will challenge the legal industry’s traditional capabilities-focused approach. Baker McKenzieʼs innovation program will extend well beyond introducing new technology or other solutions and will start from and hinge around client challenges,” the law firm said at the launch.

Areas for investment, include:

Machine Learning
Applying current AI tools to due diligence, contracts, e-discovery and any practice for which such technologies can ensure market-leading efficiency. The firm has deployed “Relativity” as its global e-Discovery platform to provide a common platform for clients worldwide and is in the process of doing the same for machine-learning based due diligence software to dramatically reduce lawyer time on transactions. Most recently, Baker McKenzie signed a deal to use U.S. AI provider eBrevia’s contract review technology in nine of its offices.Services Transformation
Using methods from Design Thinking to re-shape all aspects of the firm’s client services and the business models necessary to support them, focused around new ways to meet big common challenges faced by clients.Technology Investments
Longer-term investments in advanced technologies and data management to prepare for significant changes these will bring to the industry.  

Baker McKenzie Fact File

1949 U.S. business founded
1987 Hungarian business founded
77 Number of international offices
7,119 Number of fee-earners worldwide
40 Number of lawyers in Hungarian office