| Italy |
 Survival of the fittestWith the global downturn cutting several international and local law firms in Italy down to size, its top legal practices have undergone drastic restructuring. LB asks what the future holds for foreign firms in Italy and assesses which firms are capitalising on the difficult times. By Julian MatteucciItaly has been less critically affected by the economic crisis than many countries and its famously conservative banks less exposed to toxic assets. Whereas several international banks verged on bankruptcy or begged for government funds, Italian banks Intesa Sanpaolo and UniCredit rejected state aid through government bonds, preferring their own issues. Yet with Italy’s export-driven economy hurt by a strong euro, the country is by no means without problems. The banks are reluctant to lend, Italy’s public finances are dire and unemployment is creeping up. Many believe the worst is yet to come. ‘The Italian legal market has suffered one of its most negative periods in 30 years,’ says Gianni, Origoni, Grippo & Partners (GOGP) Rome-based senior partner, Francesco Gianni. Indeed, M&A activity is scarce, international capital markets battered and private equity funds preparing for a tough 2010. The consequences have been brutal. ‘Many firms have panicked and either downsized or signed up to defensive mergers,’ says Studio Legale Sutti Milan-based managing partner Stefano Sutti. Redundancies have taken place at partner level, and several foreign and local firms have frozen salaries and bonuses. The maths is simple: the number of lawyers in Italy exceeds current demand and serious restructuring has been required. ‘It’s a sad moment for the international firms,’ says Gianfranco Puopolo, a corporate partner at Puopolo Geffers Iacobelli & Partners (PGIP). ‘They’ve been punished by their huge overheads and the need to be all over the world.’ To read the rest of this article subscribe to Legal Business. 
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