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Share and Share Alike: Montenegro’s Neighborly Legal Market

Market Spotlight-Share and Share Alike: Montenegro’s Neighborly Legal Market

Issue 9.10
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Serbian law firms seem to have carved out a considerable share of the Montenegrin legal market. CEE Legal Matters looks at the interplay of these two formerly linked legal markets and explores in what respects they are complementary, where they clash, and how this reflects on the work of lawyers.

Seizing the Moment

“During the past period, Montenegro was a quite vivid market, facing developments in a lot of areas, with a lot of opportunities,” Zivkovic Samardzic Partner Sava Pavlovic says. “That obviously caused more need for legal support as well, and Serbian law firms are seeing an opportunity in that.” According to him, “at the very beginning, the local market for legal services in Montenegro was quite undeveloped. There was a gap, and that gap was covered mainly by covering the Montenegrin jurisdiction from Serbia.” 

NKO Law Office Founding Partner Djuro Otasevic highlights that NKO has been physically present in Podgorica, ever since its formation. “I used to be registered at the Montenegrin bar and had significant experience in Serbia too, so it was only logical to set up a presence in Montenegro, since the very inception of NKO. Nowadays, we cooperate with a local attorney,” he says. Similarly, BDK Advokati Managing Partner Tijana Kojovic highlights that permanent cooperation with local lawyers was a natural step for the firm. “After several initial years of working on the most prominent Montenegrin privatizations from Serbia, it was natural for us to bring our Montenegrin practice to another level by establishing permanent cooperation with local lawyers already in 2009,” she says. JPM Partner in Montenegro Lana Vukmirovic Misic explains the rationale behind the partnership with a Serbian firm: “the growing needs of JPM clients who required legal services in the region were a key factor for JPM’s decision to increase its presence in Montenegro,” she notes. “For us in Montenegro, having the opportunity to provide clients in the country with niche expertise from a larger neighboring market was a natural move.”

On the Montenegrin side, Radonjic Associates Managing Partner Vladimir Radonjic and Jovovic, Mugosa & Vukovic Law Office Managing Partner Vanja Mugosa highlight that Serbian-based law firms used to have a considerable market share in the Montenegrin legal market. “In terms of representation before the courts, the number of lawyers and law offices from Serbia is high, and in terms of legal consulting before Montenegrin authorities and institutions, the presence of Serbian firms has been constant over the years, and even increasing lately,” Mugosa reports. 

Birds of a Feather

“Serbia and Montenegro are akin in many respects,” Kojovic points out. “First of all, Serbia and Montenegro formed part of the same country until 2006, so it was usual for Serbian lawyers to provide legal support in Montenegro and vice versa,” Otasevic adds. According to him, “even though the legal systems of the two countries had their differences even before the breakup of their union, they are still based on the same legal principles.”

Another factor that led to the likeness in the legal system between the two countries is the EU candidacy status. “The similarities of legislations derive from the harmonization with EU law,” Vukmirovic Misic notes, with Kojovic adding that “both are EU candidate countries in the process of harmonizing laws and regulations with EU acquis.” 

Other than that, Pavlovic highlights the current regulatory framework: “in comparison to other regional jurisdictions, Serbian lawyers are allowed to advise in Montenegro, based on the bilateral agreement between Serbia and Montenegro.” According to him, there is also no language barrier. “Finally, businesses in these two jurisdictions are quite interspersed and connected, and being able to support clients that cover both markets is a business necessity,” Pavlovic notes.

What Makes a Good Neighbor

Lawyers highlight the essential need for and benefits of cooperation. “No matter what we are thinking about ourselves, all markets in the Balkan region are quite small individually, in every sense,” Pavlovic says. “Such small individual markets, from the perspective of some clients, are and could be regarded jointly in an economic sense but, in the legal sense, each of them has its individual and different legal systems, and that obviously does not favor investors and big international or regional clients.” According to him, the primary motive behind any local gatherings of law firms “is the idea of providing clients with the most efficient solution to such complex situations,” considering that “big international or regional clients need to have one law firm covering as much territory as possible.”

“International law offices frequently want to partner with offices that are able to act as a single point of contact for advice concerning both Serbia and Montenegro,” Otasevic shares, in a similar vein. “We always had a lot of clients operating in Serbia, who had affiliates or subsidiaries in Montenegro, so we wanted to make sure that we could support them in an equally good manner in both countries.” Kojovic agrees with both and adds that the partnership is, normally, mutually beneficial: “the experience flow between two countries is not a one-way street. Some industries are more developed in Montenegro so, for example, we in BDK Advokati have built our hospitality and gaming practices across jurisdictions heavily relying on our experiences gained in Montenegro.”

As for the Montenegrin perspective, Vukmirovic Misic says that being present in both jurisdictions has its benefits: “it enables us to segmentize the expertise while using combined experience, knowledge, and resources,” she notes. According to her, “from the Montenegrin perspective, the market is too small for the firms to develop and follow all the legal technology solutions.” Even though law firms seem to have a strong interest in a partnership and mutual support, this might change in the future. “It could be seen that, in recent years, this situation has been changing a lot,” Pavlovic notes. 

Should I Stay or Should I Go?

“Serbian-based law firms used to have considerable market share in the relatively new and undeveloped Montenegrin corporate legal market but this, over the years, has started to fall,” Radonjic says. “That downward trend has continued, in my view, in the last two years with the strengthening of the locally rooted corporate law firms that have, slowly but surely, started taking over major mandates.”

Radonjic says that Montenegrin law firms should continue to develop their work. “I am definitely against any restrictive measures, as I strongly believe in the free market and fair competition,” he says. On the contrary, he notes, “Montenegrin law firms should set the goals of developing truly regional practices instead of restricting the competition of regional law firms.”

Mugosa, on the other hand, is in favor of clarifying and upholding those few restrictions that do exist. While Serbian lawyers may be able to practice in Montenegro, he says it’s their incorporation in the country that could raise issues, with foreign companies providing legal services or local companies providing representation not unheard of, and misrepresentation being rife. “The Bar Association could be more committed to certain restrictions,” he says, and to settling “certain illogical situations and irregularities.” For example, he reports “a certain number of renowned law offices from Serbia indicate that they are present in Montenegro and, frequently, place boards on their premises indicating their Serbian name.” This, according to him, “is impermissible, since under our regulations such offices or lawyers might not be registered in Montenegro.” 

This article was originally published in Issue 9.10 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here