Euro Elite’s Southern Europe contingent comprises firms from the highly competitive Israeli and Greek markets, all of which have been required to weather a substantial storm after several years of heightened activity.
Israel has long been known for its enterprising market of tech and life science start-ups, and recent years have seen the industry riding high with premium valuations and US public listings. That has changed in the last 12 months, as inert public markets and global economic conditions saw the well of capital begin to run dry.
Mike Rimon, a corporate partner at Meitar, describes the extent of the slowdown: ‘2022 was quite different from 2021. We were very busy, even if not at the level of 2021. Equity investments in companies in Israel went down from nearly $27bn to approximately $16bn. There were hardly any IPOs of Israeli companies on Wall Street, compared to 21 in 2021. The first quarter, and the second quarter to a lesser extent, were busy, piggybacking on the end of 2021. Then in Q3, and more so in Q4, you started feeling the slowdown more significantly. Even those companies that are well funded with good technology have been cutting their costs and many of them have fired employees.’
The fall in investment has led to an increase in M&A transactions, as domestic companies look to consolidate, and opportunistic buyers exploit lower valuations. A striking example was the $4.4bn union of gaming developers Unity and app creator ironSource. Herzog Fox & Neeman advised Unity, while Meitar represented ironSource.
A less fertile market may also be the reason for the recent movement towards consolidation among law firms. Yigal Arnon and Tadmor Levy announced their union in 2022, to become the country’s third-largest firm. 2023 has already seen Goldfarb Seligman and Gross & Co unveil their tie-up. When that merger is finalised, Israel will have a new largest law firm.
Nevertheless, there are reasons for optimism. The Abraham Accords, which came into effect in 2020, established diplomatic relations between Israel, UAE and Bahrain, and brought expectations of floods of inbound investment from the wealthy neighbouring states. There has been movement in that direction, such as a joint Israel-UAE R&D fund to support Israeli and Emirati tech companies, but there is a feeling that the full benefit of the agreement is yet to be felt.
‘Governments do not cancel projects because there’s a downturn in the economy.’
Mark Phillips, Herzog Fox & Neeman
‘Everyone was very optimistic, expecting that there would suddenly [be] huge amounts of investment. I never thought that would happen straight away because people have to take their time to become familiar with it, find the right opportunities, dip a toe in the water. Over the next couple of years, I think we will see some more interesting things coming up. Developing business relationships in new countries is a marathon, not a sprint,’ says Herzog Fox & Neeman head of project finance, Mark Phillips.
Equally, some areas of the market have continued to prosper. Phillips explains how a slowing economy has not hindered infrastructure investment: ‘Israel is lagging a long way behind where it should be in terms of public transport. Having said that, in the last year, we’ve had three tenders for light rail, two in Tel Aviv, one in Jerusalem. There’s another one going ahead now for light rail in the north of Israel, between Haifa and Nazareth. And then, at some point in the future, there may or may not be a metro project, which is an enormous undertaking.
‘Governments do not cancel projects because there’s a downturn in the economy. In fact, they sometimes see them as a way of helping get out of downturns. Where the downturn does have an impact is interest rates. As interest rates go up, the projects become more expensive.’
Despite recent turbulence, many remain confident that the current period is an aberration, rather than a new normal. Rimon concludes: ‘I am carefully optimistic. If you look back historically, the slowdowns typically did not last more than 12 to 18 months. Now, we’ve been in this slowdown for six to nine months, which means that, if the future will be similar to the past, then we should start feeling that the slowdown is over in the second half of 2023.’
Despite global pressures, the Greek economy maintained its steady 5.9% growth in the first nine months of 2022. The market continues to rebound strongly from the after-effects of the Covid-19 pandemic. Private equity funds are increasingly exploring investment opportunities in Greece and see the country as a potential hub by which to access the entire region.
Tourism and real estate have seen a demonstrable post-pandemic boom. Demand for properties has soared; 2022 saw prices increase 40% against pre-pandemic levels as the global travel industry recovers. The large-scale Hellinikon project continues to be touted by firms as transformative for the region – said to be worth €8bn in total, with high demand for the residential and office space making it appealing to high-end investors.
Following the impact of the conflict in Ukraine on the global fuel supply, the energy sector has seen a flurry of activity across both renewable and traditional sources. ‘Greece is a pole of attraction for green energy, renewable, and liquefied natural gas projects,’ explains Panayotis Bernitsas – managing partner of Bernitsas Law – regarding the current dynamism in the market. Italian energy company, Italgas, acquired 100% of the shares of Greek state-owned gas distribution operator, DEPA Infrastructure, in a significant privatisation deal worth €733m.
Other major projects include the official launch of the Alexandroupolis FSRU floating liquefied natural gas terminal, having closed financing in 2022 – Bernitsas Law provides ongoing advice to Gastrade on the project. There is optimism that the project will aid in alleviating concerns regarding gas supply, while increasing energy security and will be of strategic importance to both Greece and the entire SEE region. Greece also sees continued robust performance for green and renewable energy sources. For five hours in October 2022, the country ran entirely on renewable energy for the first time, following a climb in demand for renewable sources to 47% of the market in the first ten months of the year. LB
| Rank (by Legal 500 ranking) | Firm name | Region | Total lawyers | Total partners | Promotions | Offices | Partner hires |
|---|---|---|---|---|---|---|---|
| 40 | Meitar Law Offices | Southern Europe | 447 | 152 | 1 | 3 | |
| 41 | FISCHER (FBC & Co) | Southern Europe | 280 | 85 | 1 | 5 | |
| 51 | Herzog Fox & Neeman | Southern Europe | 450 | 189 | 18 | 3 | 1 |
| 52 | Goldfarb Seligman & Co | Southern Europe | 300 | 120 | 11 | 2 | 5 |
| 54 | Gornitzky & Co | Southern Europe | 240 | 90 | 1 | 2 | |
| 62 | Yigal Arnon & Co | Southern Europe | 420 | 120 | 2 | 2 | 5 |
| 66 | PotamitisVekris | Southern Europe | 130 | 13 | 1 | 1 | 2 |
| 67 | Bernitsas Law | Southern Europe | 50 | 11 | 1 | 1 | 2 |
| 68 | S. Horowitz & Co | Southern Europe | 200 | 72 | 1 | ||
| 72 | Karatzas & Partners | Southern Europe | 64 | 10 | 1 | 1 | |
| 78 | Koutalidis Law Firm | Southern Europe | 61 | 12 | 1 | 1 | |
| 93 | M. Firon & Co | Southern Europe | 300 | 95 | 13 | 1 | |
| 95 | Agmon & Co. Rosenberg Hacohen & Co. | Southern Europe | 180 | 58 | 3 | ||
| 96 | Lambadarios | Southern Europe | 51 | 12 | 1 | ||
| 97 | Zepos & Yannopoulos | Southern Europe | 82 | 31 | 1 | 2 | |
| 99 | Naschitz Brandes Amir | Southern Europe | 220 | 86 | 2 |