Legal Market Overview
In addition to Italy’s natural flooding disasters and the collapse of Genoa’s Morandi bridge in 2018, the year was marked by significant political and economic crisis. At the end of September, the government’s populist Five Star Movement and far-right Lega Nord coalition, which promised a minimum income for the unemployed as well as tax reductions, declared its intention to increase deficit spending in 2019 to 2.4 per cent of the GDP. Italy’s high level of debt is seen by the European Commission (EC) as leaving Italy’s economy vulnerable; in July the EC had recommended that the debt be slashed by 0.6% of GDP in 2019 and that Italy revise its budget or prepare for potential fines.
Nonetheless, recent investment activity in Italy’s private equity and venture capital markets has showcased the interest of international investors in the country’s businesses; Italy’s lawyers have also benefited from transactional advice on large numbers of non-performing loan (NPL) sector deals, as a result of sales by Italian banks of NPL portfolios.
The market’s banking, regulatory, corporate and bankruptcy lawyers were impacted by capital strengthening initiatives and precautionary recapitalisation procedures, in anticipation of the application of the Banking Recovery and Resolution Directive. Examples include the headline precautionary recapitalisation of Italian bank, Monte dei Paschi di Siena, which the EC approved subject to an effective restructuring plan.
Significant legislative developments include Italy’s adoption of new measures, whereby investors acquiring significant stakes in listed companies must declare additional information to the market, including strategic plans, while the country’s golden powers’ rules, which compels transactions in certain strategic sectors to be notified to the Italian government, have been extended to certain high-tech intensive industries.
News in the legal market includes top Italian law firms continuing to invest outside of the country. Following the openings in Cairo and Addis Ababa in 2016 and Dubai in 2017, respectively, BonelliErede recently launched an outpost in Frankfurt at the offices of its best friend firm, Hengeler Mueller. 2017 saw the entry of Manchester-headquartered DWF to the Italian market with the opening of an office in Milan, hiring corporate finance specialist Michele Cicchetti and M&A expert Luca Cuomo from Pavia e Ansaldo. Elsewhere, Nicolò Bastianini left Carnelutti Studio Legale Associato to found Studio legale Bastianini Carnelutti.
Other high-profile movements in the legal market saw veteran rainmaker Roberto Casati leave Cleary Gottlieb Steen & Hamilton for Linklaters; infrastructure law specialist Oriana Granato exit Gianni, Origoni, Grippo, Cappelli & Partners for Studio Legale Tributario in Association with Ernst & Young; and Carmelo Raimondo join Fieldfisher Italy (which opened in 2016) as head of the banking and finance department from Chiomenti. Elsewhere, Molinari e Associati hired regulatory law expert Nicolò Juvara in 2017 from Norton Rose Fulbright, where he was Italy head, while Dentons expanded its offering, recruiting project finance specialist Giovanni Diotallevi and structured finance expert Gianpaolo Garofalo from Chiomenti and BonelliErede, respectively.