Interview with Dr. Erika Papp, Managing Partner, CMS Budapest

10 Jun Interview with Dr. Erika Papp, Managing Partner, CMS Budapest

CMS Budapest is now Hungary’s largest law firm. Can you share how the firm has grown and positioned itself in the market over the years?

CMS Budapest has been active for 35 years and was one of the first law firms to open after the end of communism, when private practice became possible. Back then, all lawyers worked in cooperatives, as private firms weren’t allowed. We started as a banking and finance law firm in association with our UK headquarters, but over the past three decades, we have expanded significantly. Today, we are the largestfull-service law firm in the country that operates in sectors including technology, automotive and infrastructure, serving a wide range of client needs across Hungary.

Which practice areas are the most successful and how do you see growth potential across different sectors?

Our strength lies in handling complex, multi-specialist projects where we can bring together all our expertise, something many competitors can’t match. A great example is our work on the sale of Budapest Airport, one of the largest transactions in Hungary and Eastern Europe in the past decade. The deal involved a €3.1 billion acquisition and a €1.44 billion financing rollover, with our finance, corporate, employment, public procurement, EU and competition teams all involved. These are the kind of high-impact, full-spectrum deals we excel at. Additionally, we are the only law firm that has pure Tier 1 rankings in all eleven legal areas ranked by the independent legal directory, Legal 500.

How do you assess the legal environment for business in Hungary and what advantages does Hungary offer over other Central European countries?

Hungary is an ideal entry point for US investors in Central and Eastern Europe. We have strong USrelations, EU membership and offer easy access to the wider European market through an EU passport. Setting up in Hungary provides a solid base for expansion across Europe, especially in sectors like technology, automotive and financial services. We aim to be that perfect first step for international growth.

One of my favorite projects on which I have worked was advising a major US investor on the acquisition of a financial institution from a Japanese bank. We handled the deal end-to-end, from negotiations to securing regulatory approvals. We understand the needs of US investors and work closely with top US law firms. In fact, interest in Hungary continues to grow and US firms are actively seeking partners here.

How important is it for law firms to expand from just legal advice to offering consulting and business services for their growth and the industry’s future?

US law firms differ from European ones in that they often operate more like consultancies, employing industry and economic experts in-house. European firms, including ours, remain more traditional, focusing strictly on legal advice. If we need economic input, we typically turn to firms like EY or PwC. This approach is also shaped by Hungarian Bar regulations, which prohibit lawyers from engaging in business activities beyond legal services.

What benefits does Hungary offer foreign investors, especially those establishing a base here, in terms of tax incentives and government support?

Hungary offers strong incentives for foreign investors, including tax breaks and a streamlined company setup process: you can now incorporate within a day. The legal framework is fully aligned with EU regulations and while the system is complex, the government has made significant efforts to simplify compliance and attract international business. We have had the privilege of advising many international clients exploring investments in Central and Eastern Europe. Hungary often stands out thanks to its affordable cost of living and high quality of life for expats. Recently, the National Bank of Hungary launched a program to attract fintech and crypto companies, offering a transparent and fair licensing process, part of a broader effort to bring in more international business.

Which sectors in Hungary offer the best investment and partnership opportunities?

The most attractive sectors in Hungary are technology, defense, telecommunications, automotive and life sciences. Due to our geopolitical situation, defense investments are growing, making Hungary a promising base for US defense contractors. Many clients are already here and we expect more US investors soon.

How do you approach technology and digitalization at CMS and how will it impact the legal sector?

We are investing heavily in technology and AI, which has now become practical for daily legal work. Over the past year, we have integrated AI into tasks like drafting agreements and due diligence. While AI is a great starting point, all outputs are carefully reviewed by our lawyers. Clients are eager for legal tech and we provide training on tools like Harvey and Copilot, which are now widely used at CMS. We have a forward-looking approach, with preparations ongoing for over two years. Our specialists are in place and we provide advice even at the international level thanks to our deep knowledge and experience. It’s a strong and promising setup. Hungary is very welcoming to US investors and serves as a great base for business in Central and Eastern Europe. Our multi-jurisdictional law firm supports clients across the entire region, so wherever they expand, we are ready to assist.

Where do you see CMS going in the next five to 10 years?

We will become even more technology-driven and expand our client portfolio beyond litigation, corporate and banking advice, building on our strong traditional service offering while also having been early movers in developing new practice areas. For example, we are developing an AI-based managed legal service with a major US multinational, handling their global procurement contracts using a playbook and a dedicated team. This outsourcing model will grow, especially for international firms like us, as we can advise under multiple laws — Indian one day, Polish the next. With internationally qualified lawyers from Germany, China, the USand the UK, we cover many jurisdictions from Hungary, making us a truly international law firm.

For instance, we have a CMS office in Montenegro and collaborate with them on regional projects. As client relationship partners for many banks and companies, we work closely across Central and Eastern Europe on cross-border transactions. Our strength lies in being part of a strong regional network, with banking teams in seven countries. Financing here often spans multiple countries like Hungary, Poland and the Czech Republic and we handle these complex multi-country deals regularly.

Can you tell us briefly about yourself and how you reached your current position?

I have been with CMS for nearly 30 years, having started my career here and progressed step by step. It’s been a fantastic journey — CMS Budapest is now the largest law firm in Hungary with a strong presence across Central and Eastern Europe. As a banking and finance lawyer, I enjoy working in Hungary’s vibrant financial sector. We have a strong banking community, though we would love to see more US banks enter the market. Citibank is already here, but others could find great opportunities in the coming years. I am originally from Debrecen and now live in Budapest with my Canadian husband and our son. We travel to North America every year to visit family in Canada, which is always a special time for us.