When I was presented with the opportunity to share my views on lawyering in Serbia and the current legal market, one of my first thoughts was where we were 20 years ago, when Serbia had just opened its doors to foreign capital, privatization started, and international banks and investors began their search for the same quality of advice and advisers they had back home. The bar was dramatically increased, traditional law firms thought they were untouchable, and only a handful of new-generation lawyers, although with very modest international experience, was able to adapt and meet this challenge.
20 years ago
To refresh my memory, I opened the Legal500 edition I received back in 2001, when I started to consider switching from an in-house role in a state-owned company to becoming an attorney at law. I looked again at the names of the ranked law firms at the time and a lot has changed. In total 13 firms were ranked. Seven foreign and six local firms. The largest law firms reported between five and ten lawyers. Only half of those firms are still ranked, others have disappeared, and some, although still active, are unnoticeable, as they were not able to recognize the momentum and shift their law firm and lawyers into a business model.
Times were difficult. The physical data room was your second office, with no AC, no internet, not enough laptop switches, a scent of old books, and files with dusty old pages that you had to read one by one. No Wolt or Glovo when you were hungry, no Teams or Zoom for Q&As, only the good old cantina where you were also able to discuss your questions with the Head of Legal, over a usually very hearty lunch.
Here we are, at the end of 2021, with AI and very advanced legal tech. Currently, 27 law firms are ranked for Commercial, Corporate, and M&A, but there is at least the same number of unranked law firms looking for top-notch clients and mandates that will bring them into the big league.
Five Tier 1 law firms have around 200 fee earners in total and have generated approximately EUR 22 million in revenues in 2020, which counts for more than 50% of the total revenues reported by all ranked law firms. Only 12 law firms have revenues exceeding EUR 1 million, so still, there is space for further growth.
All Tier 1 law firms are present in multiple jurisdictions, while the majority of Tier 1, Tier 2, and Tier 3 law firms have established or joined regional legal networks. This indicates that, although Serbia is not a small market, with a population of around 7 million, being present in the neighboring countries or being a member of a regional network is a good recipe for getting more work.
Many firms are a spin-off from the larger firms and, with no integration in sight, mainly due to our Balkan mentality, it is difficult to see any major shifts on the market for at least the next five years. Another reason for that is the limited number of large transactions, with only eight transactions above EUR 100 million reported by CEE Legal Matters during 2021 – and you need a role in these big transactions if you want to stay or become a market leader.
Connecting talent to opportunities for their personal and professional development will be a key factor for the development of law firms in the years to come. Working on big transactions and for major international clients is still very important but working on pro-bono cases and ESG-related work is another huge driver for talent, when they are selecting law firms. Yes, they are the ones selecting, not us anymore. The partners’ dedication in working closely with talent is another driver, as are constant appreciation, recognition, flexibility, and the cultural values of the firm. With all this in mind, and with appropriate succession planning, we can set the right model and shape of the law firms which will continue their life beyond the era of their named partners.