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Entering a new jurisdiction is never easy. On top of the start-up costs, the need to establish a strong team of local lawyers and a solid client base, there is also the tricky matter of timing. It can take up to two or three years of planning before you are finally able to put that new city onto your law firm’s website. By which time, the market that so attracted you in the first place might have altered drastically.

In 2006, Romania must have seemed like a sure thing to law firms seeking new markets. It had entered Nato in 2004, and on 1 January 2007 was set to join the European Union. Its GDP growth rate was 7.9%, a figure that peaked at 9.4% in 2008, according to The World Bank. It had several industries left to privatise, as well as ailing infrastructure crying out for foreign investment. It also serves as a hub for south-eastern Europe and the Balkans. Among the EU’s new eastern European entrants, Romania’s population of 22 million put it second only to Poland in terms of size. And Poland’s legal market was already saturated with international law firms, whereas Romania was relatively untouched.

So, when Allen & Overy, DLA Piper, Garrigues and White & Case all considered entering the Romanian market, it wasn’t a matter of why, but when. Unfortunately for them, foresight doesn’t boast the same crystal clear, 20/20 vision that hindsight offers. At the time, 2008 probably seemed like as good a year as any to set up shop. The global economy had other ideas, however, as did Romania’s precipitous 7.2% drop in GDP in 2009. Real estate, which had been such a driver for much of the legal market, was the worst hit. To add to the challenge of starting up in a downwardly mobile economy, the new international arrivals also have to contend with an entrenched domestic legal market whose leading firms definitely shouldn’t be underestimated.

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