The Turkish legal market is, if not “over-lawyered,” at least populated by an unusually large and ever-growing number of smaller firms led by lawyers with significant international and cross-border experience. As a result, complaints about downward fee-pressure are more common than in many other markets, and the competition for clients is unusually fierce.
Speaking on the subject last winter, several well-known experts predicted a consolidation of the market. Kenan Yilmaz the Chief Legal Counsel at Koc Holding, suggested that the market is in a “transition period,” and said of the many smaller firms that, “eventually some of them will be eliminated, and some of them will unite.” Ismail Esin, the Managing Partner of the Turkish firm associated with Baker & McKenzie, mirrored this analysis, predicting that "most probably some law firms will be forced to come together, to merge, to survive.”
And Cem Davutoglu, the owner of Davutoglu Attorneys at Law — one of the firms fighting to establish itself in the crowded market — said of the smaller firms that, “they're inevitably going to merge at some point.”
Davutoglu's prediction, it turns out, was perhaps not entirely theoretical, and his choice of pronoun perhaps disingenuous, as the former White & Case Partner announced this week that his eponymous boutique will be combining with the larger and more established Bener Law Firm, effective as of September 1. The merger may well constitute the first ever merger of two established firms in the Turkish legal market.
Davutoglu says he and Erim Bener first became acquainted while working on a bank acquisition transaction over a decade ago, and the possibility of joining forces was raised and tabled several times over the intervening decade. His decision that the time for the merger had come, Davutoglu says, followed from his analysis of the market: “I think it was a decision based on the thought that in a market where competition is getting stronger every day, consolidation and forming larger and stronger firms offering a wider scope of services with more senior and specialized attorneys would create a difference.”
His entire team — with the exception of partner Eda Cemali, who will remain independent — will be subsumed into the Bener Law Firm, which will grow to over 50 fee earners while continuing to operate under its current name. Davutoglu says that he is “not really” concerned about no longer seeing his name on the charter, as “I believe in synergies and success in bigger structures with better capabilities.”
Both he and Bener have high expectations about the success of the merger, Davutoglu says, as they have received positive feedback from the market and clients, and “you can sense the vibrant energy of our colleagues in the firm.” As for the exact nature of the partnership, Davutoglu would say only that at Bener he will operate under “a hybrid structure of fixed income and income based on revenue generated.”
Finally, when asked about the significance of this first ever merger, Davutoglu refers to the changing nature of the market itself. “Things are moving fast in Turkey,” he says. "Magic Circle firms are coming in, old firms with a big presence are still losing blood, etc., and the clients are becoming more sophisticated in terms of hiring legal counsel and closely watching developments in the market.” As a result, he says, "I think consolidation is inevitable across the spectrum of small, mid-sized, and large law firms.” As inevitable as it may be, Davutoglu notes that combinations are never simple, as "matching with partners that give you comfort is not very easy and conflicts of interest, client reactions against potential partners, etc., just makes it more difficult.”
