There’s "an enormous amount of legislation" coming in Turkey at the moment, according to Bezen & Partners Senior Partner Yesim Bezen, "both on the constitutional front and the secondary front." As an example, Bezen describes the government’s proposed creation of a sovereign wealth fund designed to facilitate "big ticket transactions," though she says, "nobody knows yet how it will affect the market and all await the secondary legislation in this respect." Bezen says there’s also “substantial new legislation in the energy sector,” and cites two recent major tenders in the renewables sector.
And, Bezen says, at least the government’s attempts to jumpstart the economy seem to be working, as — since May of this year — she and her colleagues have noticed a marked uptick. "The past two months have been extremely busy for us," she says, though she’s quick to point out that "I don’t know if that’s the same for other law firms." According to Bezen, "last year was a difficult year, as were the first 4-5 months of 2017 — there was not much activity in the financing and corporate/M&A markets, which is where you could see that the economy was somehow at a halt. Now things have been picking up, especially since the [April 16 constitutional] referendum." Thus, the past two months have seen "activities on the corporate front, setting up JVs and companies, and on the financing front, trying to find financing for certain projects, by not only Eastern but also Western investors."
Of course, not all of the increase can be credited to the government. Bezen notes that “in certain sectors — particularly energy and infrastructure — Turkey is still seen as a growth market.”
Bezen is quick to emphasize that she pays little attention to the day-to-day developments on the Istanbul legal marketplace itself — “I’m the last one to hear about rumors," she says; "even our junior associates hear more" — but she does note that the international firms which a decade ago were opening offices in Istanbul on what seemed to be a monthly basis have "not really been growing in size in the past few years." According to Bezen, "this is an indication that it remains very much a local market, and it means you really need good local lawyers involved in your deals, regardless whether they’re working with international or local firms."
And the slowdown that the Turkish economy experienced over the last year or two had a significant effect on all firms in the country, according to Bezen, who reports that a number of firms had to downsize. The only alternative firms had, according to Bezen, was to cut their profits per partner, which is what she and her colleagues decided to do, rather than laying off associates. The problem was only exacerbated by the continuing downward pressure on fees in the country. "This is a difficult market in terms of fees,” she says, noting that a significant downward push comes from an unexpected source. "In our experience," she says, "we haven’t had many issues with our peers — other prominent local law firms — which have a similar cost structure and therefore quote similar to us. We’ve had more pressure from international law firms — they can charge less — much less in certain cases and compensate elsewhere. We have been surprised to hear they were able to give fee quotes at that value." As a result, she says, "fees dropped as more international firms came into the market, even though we were hoping for the opposite effect."