The Serbian legal market has changed rapidly over the past five years. After less than 30 years of existence in this form, our legal market is still relatively young and its pioneers emerged in the early 1990s. Nevertheless, it is also a dynamic market and brings change every year, especially due to the European Union accession negotiations and additional harmonization of the country’s legislation with EU legislation. On the other hand, frequent changes in law have become a general rule, providing more work for law firms, but also bringing a high level of uncertainty for their clients.
One of the recent trends on the market is the emergence of boutique law firms – a number of spin-offs, opposite to the full-service law firms already on the market that provide a full range of legal services in all areas of client business. Because the Serbian market is relatively small and not fully developed, it does not allow law firms to be active only in one particular niche or practice, so we still cannot talk about the rise of the kind of boutique law firms now common across Europe and the USA. Several full-service commercial law firms are the traditional market leaders, but the rise of boutique law firms is a reminder to them that a strong focus on client service and relationships is the way forward for everyone in this ever-changing legal landscape.
Significantly, law firms are focusing on building brand awareness using a diverse range of proven public relations tools and activities. Social networks, including Facebook, Twitter, and LinkedIn, are used widely by local law firms. However, the Serbian Bar Association continues to struggle with accommodating its regulations to the commercial needs of modern law firms, particularly in terms of advertising and forms of conducting the legal profession, and existing Bar-imposed limitations should be reconsidered. In the meantime, Serbian commercial law firms are still trying to employ the typical marketing methods and tools used by international law firms under the existing, old-fashioned framework imposed by the Bar.
The Big Four play an increasing role on the Serbian legal market, as they expand aggressively from their core audit business. Thus, while the Big Four traditionally focus on practices that complement their audit and tax advisory businesses, such as tax, employment, and immigration, recently they are increasingly branching out into other areas, including M&A. This strategy, combined with the Big Four’s relationships with large clients, have allowed the Big Four to penetrate many areas of the legal industry and compete with the largest law firms on the market.
More than ever before Serbian lawyers are using technology, including legal database applications and video conference tools as well as other electronic devices, to complete daily tasks. Electronic legal research is the most common method of legal research and lawyers are using a wide range of legal databases. New software products are constantly entering the market. By embracing new technologies, many benefits have been achieved. Some of them have been passed on to clients in the form of lower fees and more transparent relationships.
Importantly, Serbian commercial law firms continue to promote female leadership, as the proportion of women in law firms is increasing both at the entry level and in senior positions. In this way, law firms support gender diversity and provide growth opportunities for all, regardless of gender.
The majority of commercial law firms on the market have built up networks and other ties with well-established law firms throughout Europe. These networks and ties have become an important way for Serbian law firms to develop their practices and to attract larger clients operating on a multi-jurisdictional basis. Furthermore, representatives of these international firms are very active in foreign investor associations in the country, which are among the main promoters of the investment-conducive business environment and solid business ethics.
Litigation practices have become important for commercial law firms. In the past, most of these firms had very small litigation teams. But, with the economic crisis and with an increasing number of disputes, many firms have built or significantly expanded litigation practices, and they have become more efficient and better positioned to represent clients in complex disputes.
Also, the wave of Chinese investments that hit Serbia over the past few years contributed significantly to the Serbian economy and consequently led to the increase of law firm activity in sectors with a heavy Chinese presence: heavy industry, infrastructure, renewable energy, electronic industry, solar projects, textiles, and automobile manufacturing. The Balkan Peninsula is a kind of terminal for China’s One Road, One Belt Initiative and the country is a center of Chinese activity in the region. It is in Belgrade where the Bank of China – the fourth biggest bank per founding capital value criteria – opened its branch office in 2017, from which it serves the Balkan region.
Last but not least, although there was lots of speculation about how Brexit would impact the traditional resort to English law as governing law in the majority of cross-border M&A transactions, we do not see any change happening. Indeed, from our perspective, English law is used as the governing law for cross-border M&A transactions more than ever before.
By Igor Zivkovski, Partner, Zivkovic | Samardzic
This Article was originally published in Issue 6.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.