Legal market overview in Estonia

After overcoming and adapting to the unique challenges that the Covid-19 pandemic provided to the Estonian legal market throughout 2020 and 2021, 2022 saw the Estonian legal market rise and stabilise after the turbulent years, whereby many firms saw an increase in growth both in sizes of their teams, international clients interested in the region, size of matters and increased demand for certain services. Such an example could be seen in the banking, finance and capital markets sphere, whereby capital markets saw an increase in public offerings, with the largest IPO in the Baltics taking place in Tallinn. One area that has rapidly expanded this year has been the world of fintech and other technology, with Estonia becoming a central hub as one of the most technically advanced countries in the EU regions. Many IT start-ups have relocated to Estonia recently due to a variety of reasons, such as the high skill gap from the overwhelming popularity of IT in University, with students predominantly studying IT/tech based subjects, beneficial tax law systems and Estonia’s geographical location benefiting from links to the EU and its central position in the Baltics. As such, there has been an increase in investments in cryptocurrency and blockchain technology, with Estonia widely being seen in the international community as blockchain friendly.

Early into the year in February 2022, the start of the war between Ukraine and Russia began, which has led to a number of issues for Estonia, a region which shares a land border with Russia and has close proximity to the conflict. In the banking, finance and corporate space, there was an expectation early on that the war would collapse the entire market, with Estonia potentially losing a high number of investors. Instead, to the surprise of attorneys, the opposite took place. While at the beginning a few investors pulled out, a number of new ones moved into the old space left behind, with more investors returning to the region over the course of the year. Within the employment and contract space, a lot of work has come from Estonian business trying to sever connections to Russian shareholders/investors and business partners, and there has been a lot of work coming from aiding Ukrainian based business and banks to relocate to Estonia for the duration of the war.

However, other legal areas have suffered a number of consequences due to the war. In the real estate and construction space, the rise in inflation, especially in prices for raw construction materials, has led to issues for construction companies who have struggled to fulfil contracts for the purchase of raw materials, alongside the energy crisis proving to be problematic for the transport of oil, gas and other energy forms. Although, this has led to Estonia pushing towards greener forms of energy and expanding investment, both from the government and private individuals in the hopes to not be as dependent on Russian gas.

Looking into the employment law side of Estonia, Estonian law firms have met a unique problem with the amount of IT start-ups that have entered the region, with staff and potential trainee candidates migrating to the smaller tech-based start ups for a variety of reasons, including start ups offering a friendlier and attractive workspace. This has provided a unique challenge for law firms as companies on all levels of the legal spectrum have had to adapt to the modern employment climate in order to compete against an increasingly competitive market.

Looking at the structure of the Estonian legal market generally, there are four areas that the legal market can be divided into. Firstly, there is the top part of the bracket known as ‘the Big Three’ law firms Ellex, Cobalt and Sorainen, who offer full-service practices covering all areas of law in Estonia and are often the go-to firms for regional and international clients. The second area include international firms including law firms and consultancy firms such as Eversheds Sutherland Ots & Co, KPMG Law in Estonia and PricewaterhouseCoopers Legal, which benefit from their established international reputations and are able to provide specialist services, especially when drawing upon expertise from all parts of the globe using their shared networks with their other offices. Thirdly, are the large to mid-sized firms which have notable attorneys servicing clients both in the Baltics and to some international capacity, such as FORT, TGS Baltic,RASK Attorneys-at-Law, WALLESS and LEADELL Pilv. Finally, there are the highly regarded boutique firms such as HansaLaw OÜ and Hedman Partners who are pure specialists in a few areas of law.

Practice Areas