Elisabeth Eleftheriades, M&A and Project Finance Partner at the Kyriakides Georgopoulos Law Firm in Athens, can hardly contain her enthusiasm about developments in the Greek legal market.
"I’m in the pleasant situation of not having to complain nearly as much as even three months ago,” she says. “Personally speaking, and from the firm’s perspective, things are looking much impressively better. Work seems to be pouring in, in terms of RFPs, and projects are ongoing that had been frozen due to the complexity of the market for the past three years.” As a result, she smiles, “we’re very busy — more than in some time.”
Last year, Eleftheriades reports, activity was effectively halted by a massive strike across the legal industry in response to the announcement that, to conform with the Troika’s demands, a new social security regime for freelancers like lawyers and engineers that would increase the cap on social security contributions per year from EUR 5000 to EUR 80,000 would be put into effect on January 1 of this year. Thousands of lawyers put down their pens to join the strike for the first 9 months of 2016, putting almost all disputes on hold and slowing down dramatically what had already been a slow market in terms of volume of work and fee compression.
Ultimately, Eleftheriades reports, lawyers began to accept the inevitable and recognize that, in her words, the strike was “killing the profession.” So, she says, “in October of 2016 things began to pick up again, with litigation lawyers returning to work and some level of normalcy being restored.”
As a result of the new regime, which did come into effect on January 1 as expected, many solo practitioners and smaller firms closed up shops and started looking for positions in larger law firms. Eleftheriades believes that “this is going to be a driver for consolidation of law firms.” She explains: "It was a saturated and very fragmented legal market — lots of Mom & Pop firms, not really partnerships. Up to a certain point it made economic sense, but the new measures are a blow to solo practitioners … the bright side is that it will attract talent from the smaller firms to the bigger ones.” Indeed, she says, “we’ve already seen it with junior lawyers. We had trouble recruiting junior lawyers in the past — especially male junior lawyers, many of whom preferred the independence of solo practice — but now we’re seeing much more talent gravitating to the big firms. It remains to be seen what the long-term effect will be, but so far we have seen the change, and we think it’s going to be good for bigger, better organized firms— and for clients.”
Movement in the market is also being generated by “the closing of the cycle for NPLs,” which she calls “one of the big drivers.” Long-awaited legislation has now come into force and banks have finally starting to clean up their portfolios. Eleftheriades says “we have a lot of distressed assets in Greece, so this is a real driver of economic movement.” The banks, she says, “are now, finally, dealing with what can be saved and what not — what can be sold, with shareholders participating in the process. Distressed business has come to an end, with shareholders realizing they won’t get any more credit, unless things start to happen.”
Banks are not yet starting to extend more credit, she says — that’s the next step. “We’re still in transition, but it seems we’re at the end of the cycle of shock, and coming to grips with what the reality actually means.
She returns to the big picture. “A corner is being turned. This is how I feel. I hope I don’t look back in six months and scoff at my naiveté. But it feels like we have been going through a cycle of vicious creative destruction and now the cycle is turning. This is a slow and difficult process for everyone, but if we are to remain in this profession and try to see positive signals, then this is the only explanation that makes sense and can keep us going. "
Editor's Note: Ms. Eleftheriades has asked us to note that her comments reflect her personal views, and that her comments do not necessarily reflect the Kyriakides Georgopoulos Law Firm’s position on these matters.