International law firms in Romania face challenges

The Lawyer, 3 January 2011 – An article published in The Lawyer (3 January 2011) explains in-depth the difficulties facing international law firms in the Romanian market. The article begins by pointing out that Spanish law firm Garrigues had decided to pull out of Romania in November 2010, just two years after entering the country.

The article highlights the negative impact that the financial crisis, sluggish economic recovery, and significantly reduced deal volumes in Romania are having on all international law firms with practices in the country.

Garrigues explained its decision to exit Romania as part of its overall strategy to streamline its operations in CEE and to focus on its core markets. The article goes on to ask if the departure of Garrigues from Romania is a sign of things to come. According to the article, there is speculation that other big international firms may follow suit, as Romania and the CEE region are not their core markets. Some observers, however, believe that Garrigues is an isolated case.

“It’s pretty hard to say whether Garrigues’ departure indicates a trend,” Daniel Torsher, Managing Partner of Kinstellar’s Bucharest office, is quoted as saying. “Romania’s a pretty challenging market for anyone who isn’t fully prepared, and I think firms where local practices are held to global standards of profitability see it as particularly difficult.”

Kinstellar’s core market is Emerging Europe, which includes Romania and the CEE region. Kinstellar provides consistent, top-quality service across Emerging Europe to leading international, regional and local clients with investments in the region.