Legal Market Overview
A vibrant tourism sector continues to positively impact Croatia’s gross domestic product (GDP) figures, with growth for the first half of 2018 at 2.7%. Consequently, financing and real estate work related to this sector continues to inform a significant amount of work handled by law firms based in the country. However, the last year has been dominated by the spectre of the restructuring of food and retail conglomerate, Agrokor, and the majority of law firms referenced in the rankings have picked up some form of mandate, whether it be for a creditor, debtor or supplier. Given the sheer size of the company, and its importance to the economy as a whole (approximately 60,000 people are directly employed by the food and retail conglomerate throughout the Balkans, and with its €6.5bn annual revenues equivalent to roughly 15% of Croatia’s GDP), its ongoing survival was vital to ensuring the avoidance of potentially disastrous knock-on effects. Indeed, such was the importance of the company to the wider economy, that a special law was introduced in April 2017 designed to ensure an orderly restructuring ensued. Nicknamed “Lex Agrokor”, the company was taken into state administration and since then the majority of creditors have approved a settlement plan, which if finalised (various creditors are appealing the settlement before the courts) is expected to lead to the company exiting state-run administration towards the end of the first half of 2019.
Although relatively established (given the youth of Croatia as a country) full-service firms including Divjak, Topic & Bahtijarevic, Žuric i Partneri and Šavorić & Partners continue to perform well in the market, the dynamics are shifting somewhat with a whole host of new firms established in the last couple of years – formed by junior partners and high-level associates at some of these aforementioned larger firms looking to go it alone. Firms such as Law Office Žarković and Batarelo Dvojkovic Vuchetich Law Firm LLP have recently been established and are part of a new breed of law firm in the country, including other slightly more established but still young firms including Law Firm Kovacevic Prpic Simeunovic, which are challenging the status quo in the market.