The Eastern Mediterranean countries featured in the Euro Elite – namely Greece, Turkey and Israel – occupy a region where, for one reason or another, international law firms largely refrain from active participation in the local legal markets; leaving a void for high-end, international expertise, willingly filled by domestic, independent firms.
In Israel, international law firms were not permitted to operate in the nation until an amendment made to the Israel Bar Association Law in August 2012. Understandably, eight years is not sufficient time for the foundations of the legal market to drastically shift meaning that very few international firms have any form of presence in the nation. Those that do only have a handful of on-the-ground lawyers between them.
The market is therefore populated largely by Israeli firms who thrive on the cross-border front, not least due to the vast number of lawyers who studied in Europe and the US or grew up in the West and made Aliyah (a move to Israel by birthright).
Despite the Covid-19 pandemic, 2020 was an eventful year for the Israeli legal market. In particular, the energy sector thrived and seemingly defied the global economic downturn with a number of multi-billion-dollar transactions, most notably Chevron’s $5bn acquisition of gas field operator Noble Energy and Shikun & Binui and Edeltech’s $1.24bn acquisition of Ramat Hovav Power Plant.
Elsewhere, the high-tech sector, a long-term driver of Israel’s economic growth, saw lower levels of investments in start-ups compared to previous years yet, at the top-end, its most prominent players still made various headline M&A transactions such as Checkmarx’s $1.2bn sale to Hellman & Friedman and TPG Capital, as well as Moovit’s $900m sale to Intel.
The pandemic itself also became a generator of work, particularly on the disputes front where alleged infringements of consumer protection law and bankruptcy cases were abundant. Given Israel’s early lead in the vaccine race, there is optimism that the country can return to some form of normality sooner than most.
Meanwhile, over in Greece, the bulk of the legal market is almost entirely dominated by Athens-based domestic firms, some of which have been founded and managed by a single family across multiple generations.
With the worst of its crisis behind it, Greece was primed for a GDP expansion of 2.8% in 2020, following on from 2019’s economic growth of 1.9%. Covid-19, of course, has resulted in a much different reality with estimates projecting a contraction of over 10% in 2020, a substantial figure reflective of the nation’s economic dependency on tourism.
Despite the dire economic consequences, Greece has fared better than most European nations in terms of containing the spread of the virus. Many lawyers have been able to safely divide their time safely between home and the office and have remained incredibly busy throughout 2020, owing in part to a thriving energy sector, which saw the high-profile privatisation of DEPA, a state-controlled natural gas company. Levels of international investment are also increasingly reminiscent of their pre-economic crisis level, a fact evident in Microsoft’s October 2020 announcement that it will be investing $1bn to build three data centres across the country.
Says Panayotis Bernitsas, managing partner of Bernitsas Law: ‘Sole practitioners and smaller outfits have been quite severely impacted by the pandemic, in particular those which focus on litigation or private client work. Court closures, delays in securing court appearances and the inability to meet clients face to face have all impacted their work inflow. This is also true of boutique litigation firms. The lawyers operating within law firm structures which handle advisory work and whose client base is made up of domestic and international corporates and high-net-worth individuals have continued to work well.’
Lawyers believe that, despite the temporary setback, 2020 was still far-removed from the worst years of the global financial crisis and are optimistic that the country is well-placed to make a rapid recovery; a forecast supported by the IMF, which predicts a GDP growth of 4.1% for Greece in 2021.
In neighbouring Turkey, international firms are solely permitted to participate in the market via affiliations with local entities. A number of these internationally-affiliated outfits are major players across multiple practice areas though much like Greece and Israel, the legal landscape is predominantly populated by domestic firms.
The country’s recent economic stagnation and weak currency have understandably been deepened by the coronavirus yet law firms have remained engaged on a number of fronts. In the project space, a number of state-funded energy, oil and infrastructure schemes, commissioned to commemorate the nation’s centenary of independence in 2023, have been undisrupted by the pandemic.
Elsewhere, the technology sector has begun to thrive, largely due to the Covid-19-enforced necessity of remote working, creating an affluence of transactional, data privacy and cyber security mandates.
As with other jurisdictions, the uncertainty created by the pandemic has also understandably resulted in an uptick of banking, restructuring, insolvency and disputes work. LB