Sponsored briefing: Mitigating the risks of the current economic climate

Oktay Şener, managing partner of Aksan Law Firm, examines how his team has reacted to the changing Turkish legal market

How are the recent economic problems, including the currency crash and inflation, affecting your firm?

Experiencing difficulties is quite normal in the current economic climate and unfortunately, we also witness the reflections of this issue among our clients. However, our country’s economic history and past have accustomed us to such ups and downs. At Aksan, in line with the precautions we have taken after Covid, we have been discussing, contemplating and implementing measures related to this situation for a while now.

What adjustments have you made in the current climate – fees, staffing levels etc?

We initially took steps to reduce expenses. Our office employs a comprehensive reporting system, allowing us to delve into the minutest cost details of every product we produce, which in our case translates to the services we provide, much like a factory. Naturally, the greatest cost of this service is the salary of our employees. However, we are well aware of the significance of working with the best attorneys to deliver quality service. To boost our employees’ motivation, we began to utilise our various programmes more effectively. We have initiated a Talent Pool project, which holds substantial importance for cultivating young managers.

Regarding the fees, we have devised solutions in tandem with our existing clients to balance mutual interests. We have shortened fee adjustment periods and placed this topic prominently in our new proposals. In essence, the attorney-client relationship is built on trust and just like any other relationship, it necessitates the satisfaction of both parties. I am pleased to note that during this challenging period, we have observed a client portfolio that understands one another. Looking ahead to the difficult years, this is incredibly promising from our perspective.

How can you and your clients mitigate the risks?

As I mentioned before, both our clients and we acknowledge that we are facing common economic risks, and we must find collaborative solutions. Our office culture positions us like an in-house attorney within our clients’ structure, so we are not only evaluating these risks from our own standpoint, but can see that our clients understand and feel this as well. With a diverse range of clients, each case requires individual assessment.

Both our firm and our clients can mitigate risks by fostering open communication and proactive legal planning. By staying informed about changing regulations and market conditions, we can identify potential challenges proactively and develop strategies to navigate them effectively.

‘By staying informed about changing regulations and market conditions, we can identify potential challenges proactively and develop strategies to navigate them effectively.’
Oktay Şener, Aksan Law Firm

What practice areas are busy, ie, the biggest areas for your firm, and why?

We are a full-service law firm, promising to provide the right solutions for any legal issue a client may encounter. In this sense, perhaps the most distinct feature that sets us apart from other law firms is our focus on general monthly consultancy services. This naturally encompasses corporate law, employment law and contract law services to a large extent. Additionally, we have witnessed remarkable growth in capital markets and startup legal consultancy, where we also stand out confidently in those areas.

We can confidently say that the partnership structure of our firm is unlike any other in our country. We have a highly dynamic and liberal approach. We believe in pecialisation and proficiency, but we also believe that it becomes sustainable when it develops organically.

The most important sectors for us can be identified as energy, construction, retail and food.

How much of your work is local versus international?

In this economic climate, we have come to understand and feel the importance of foreign investment even more. Both the geographical and political position of our country further emphasise the significance of international business.

In the past ten years, our primary focus has been on Asia-Pacific countries, which continues to this day. However, in the coming year and beyond, we will witness significant strides in the German market – that is what we are hoping and working for. We have declared 2023 to be Germany year at Aksan.

Currently, we can say that our clientele consists of 50% domestic and 50% international clients. There is increasing interest from Middle Eastern countries, and our relationship with English law firms has been growing stronger in recent times.

‘We hold a positive stance on AI, and with a dedicated team, we are actively exploring how we can enhance our services using AI.’
Oktay Şener, Aksan Law Firm

What changes do you expect once the effects of the economic challenges have passed?

When economic challenges decrease and the Turkish business landscape gains clearer visibility, we anticipate a rapid growth and an increase in business activities. This pattern has been also observed in the past. Türkiye is a significant and substantial country in the region.

As the economy stabilises, we also anticipate a rise in foreign investor interest. This, in turn, will bolster the legal services. Foreign investors seek ‘security’ in the country they invest in. This encompasses not only economic security but also ‘legal’ security, which is equally vital. We believe that attorneys and large firms should prioritise these aspects as key areas of focus.

Which sectors are growing in Istanbul and how is your firm positioning for an anticipated resurgence in activity within the region? How much more growth do you see happening in 2023 and 2024 for the city?

Istanbul is the economic hub of our country. Any developments in Istanbul have implications for the entire nation. In the coming years, we anticipate that Istanbul will accelerate its journey towards becoming the financial centre of the region. Of course, real estate is an incredibly exciting aspect of Istanbul. Despite the city’s expansion, it continues to offer a promising real estate market for both local and foreign investors. Additionally, the healthcare sector should be also mentioned. With its population size comparable to many European countries, the demand for healthcare services in Istanbul is considerably high and likely to continue for an extended period.

How much progression has been made in the country on the issues of diversity, sustainability and environmental, social and governance (ESG)?

This topic is indeed crucial. For all clients above a certain scale, our number one agenda item is ESG. We closely monitor developments in Europe and we believe there is tremendous potential in the ESG realm. We believe that the compliance policies of companies and their future positioning will progress in parallel with the importance they attribute to ESG. We anticipate the same trend for law firms as well. ESG is set to be the top subject for the next decade.

Which Turkish legislation in 2023/24 will affect your clients and drive advisory work?

There was a new draft amendment in progress concerning the KVKK (Personal Data Protection Law), which seems to have been postponed for a while due to the elections. However, we anticipate that in the coming years, changes in personal data protection legislation will generate significant attention. Moreover, we foresee the increasing importance of capital markets. Additionally, new regulations regarding investment incentive mechanisms will gain importance in line with the economic recovery.

Furthermore, we are keeping an eye on adapting legislation with the evolving technologies in the IT sector. Technological advancements in Blockchain and artificial intelligence (AI) will lead to substantial changes in the legal landscape. Law firms that lag behind in adopting AI might struggle to maintain their current positions. We hold a positive stance on AI, and with a dedicated team, we are actively exploring how we can enhance our services using AI. In fact, even during the process of conducting this interview, we incorporated AI into our editorial team. We are researching methods to further develop and utilise this application.

Where do you see the Turkish legal business market heading in 2024?

Looking ahead to 2024, we envision the Turkish legal business market will continue its path of growth and modernisation. With increasing globalisation and the country’s strategic geographic position, there are opportunities for expansion in areas such as cross-border trade, technology and innovation. Our firm remains committed to being at the forefront of these developments, providing exceptional legal services to our clients and contributing to the advancement of the legal industry in Türkiye. Furthermore, as foreign investor interest grows, it is only natural that foreign law firms’ interest will also increase in the legal business market. Therefore, forming a presence on the international stage is of paramount importance. For this reason, we aim to enhance our foreign collaborations. The Turkish legal community is more than capable of providing services at an international standard, and indeed, it already does. In fact, due to the increase in costs caused by global inflation, Turkish attorneys and law firms are likely to be preferred for certain aspects of international transactions. We believe it is important to be prepared for this development as well.