Euro elite: focus Greece, Turkey and The Balkans – Bouncing back

They may not be out of the woods yet, but independent firms from the south-east tip of Europe are showing their resilience.

In a region of Europe marred by economic crisis and political unrest, many firms in Greece, Turkey, Cyprus and the Balkan Peninsula have remained resilient. The expectation that testing circumstances could lead to bad news for many firms has been offset by international interest or domestic legal work that came with the uncertainty.

John Dryllerakis, managing senior partner of Greece’s Dryllerakis & Associates – a firm that despite having just 44 lawyers scores highly in The Legal 500 EMEA – has the most ominous outlook. Capital controls, a possible exit from the Eurozone and two general elections have caused significant uncertainty in the country.

‘The economic crisis has hit the legal profession very badly,’ he says. ‘The market was always very competitive because there are a lot of firms compared to the amount of business. The work has reduced, the number of firms remains the same, the standard and the competition has increased. The market is small. I don’t mean every other firm is in crisis, but in general the profession has a problem and I know that firms have reduced the number of employees.’

Despite this, four other firms from Greece feature in the Euro Elite 100: PotamitisVekris, M & P Bernitsas Law Offices, Kyriakides Georgopoulos Law Firm and Zepos & Yannopoulos. This representation is assured because, although all five firms in the table have fewer than 100 lawyers, they dominate the Greek market for transactional and disputes work and compete among themselves in a space that has been largely untouched by large international players.

The Euro Elite: Greece, Turkey and the Balkans	Country	Total lawyers	Total partners	No. of offices
Karanovi´c & Nikoli´c	Serbia	93	16	7
YükselKarkınKüçük	Turkey	110	13	2
Andreas Neocleous & Co	Cyprus	134	18	9
Hergüner Bilgen Özeke	Turkey	85	12	1
Dryllerakis & Associates	Greece	44	29	1
PotamitisVekris	Greece	55	9	1
M & P Bernitsas Law Offices	Greece	52	12	1
Kyriakides Georgopoulos Law Firm	Greece	84	18	2
Zepos & Yannopoulos	Greece	57	22	1
Pekin & Pekin	Turkey	60	10	1

Turkey, which straddles Europe and the Middle East, has faced two general elections, political turmoil and civil war both internally and across the border in Syria and Iraq over the past year. Nonetheless, three Turkish law firms – Hergüner Bilgen Özeke, Pekin & Pekin and YükselKarkınKüçük – feature in the year’s top 100.

Hergüner senior partner, Ümit Hergüner, describes a difficult environment for any law firm to operate in.

‘The environment has caused international investors – be they private equity or strategic investors – to hesitate in investing into Turkey,’ he says. ‘For a firm like ours, which normally acts for international companies investing here, November and December of 2015, and January and February of this year, were comparatively slow months. But starting from the end of February, throughout March and currently, there has been a constant and steady increase in the workload; people seem to have decided to invest once more. This may have something to do with the belief that oil prices will go up again to tolerable levels, so companies have continued their investment projects, most of which were put on hold.’

Regional players in Central and Eastern Europe (CEE) are also well positioned to realise the long-term potential of Turkey. ‘Although Turkey is a large country, the legal market there is relatively small,’ says Jason Mogg, managing partner of progressive CEE firm Kinstellar, which has been in Istanbul since 2010.

However, Schoenherr, an Austria-based top-ten Euro Elite firm, formed a formal co-operation with Turkish firm Türkoğlu & Çelepçi in 2012 and managing partner Christoph Lindinger does not anticipate any significant upside just yet, while his counterpart at rival firm Wolf Theiss, Erik Steger, would only consider an Istanbul office if it were client-driven.

In Cyprus, there is much more of a sense of optimism as the island has emerged from its three-year economic adjustment programme, a part of its €10bn bailout package it agreed to in 2013. There’s a cautious hope a range of policies implemented by the government have stabilised the country’s economy, generating confidence in the legal market.

Speaking to Legal Business recently, Elias Neocleous, head of corporate at the only Cypriot firm to feature in the Euro Elite 100, Andreas Neocleous & Co, says that Cyprus and its professional services industry is trying to diversify from an external perception that it is largely an offshore jurisdiction for Russian individuals and companies.

‘The key is that Cyprus has decided to move upscale, which means we’re trying to target a different audience as a potentially new jurisdiction for bigger clients,’ he says. ‘We’ll be looking at bigger, more sophisticated companies.’

Meanwhile, Serbia has recently re-elected its pro-western prime minister Aleksandar Vučić, who presided over a period of austerity, partly forced by the terms of a €1.2bn loan agreement with the International Monetary Fund, and launched EU membership talks in December on track for completion by 2019.

Serbia’s legal market, which has a leading pack of six to seven domestic and international firms, is described by BDK Advokati founding and managing partner Tijana Kojović as ‘very competitive’. The market is led by one independent firm, which features in the Euro Elite, Karanović & Nikolić, which also ranks strongly in Croatia.

‘Together with Croatia, Serbia is probably the most competitive market in the region,’ says Kojović. ‘A lot of mid-sized firms and smaller firms are actually spin-offs from larger firms, firms that have some strong individuals but do not have sufficient capacity to be full service. Most of them aspire to be full-service firms rather than focused boutiques.’

The country currently has plans to privatise or place into bankruptcy 514 commercial and state-owned assets that are still in the hands of the Serbian Privatisation Agency as part of its structural reform agenda, which has sparked international interest, but political and social pressure has stalled plans. Regardless, Kojović expects there will be a boost in work over the next 18 months.

‘We’re looking at South African and possibly Persian investors who see Serbia as a gateway to begin investments in Europe.’ LB

madeleine.farman@legalease.co.uk