Legal Market Overview
2019 has been a challenging year for Sri Lanka as a result of the Easter terrorist attacks and the ramifications of the 2018 political crisis. Firms report an ongoing deceleration in foreign direct investment and the government has predicted a 30% drop in tourism – an industry which accounts for 5% of the nation’s GDP. These circumstances threaten to undermine the economic recovery Sri Lanka has been working towards since 2016, with the IMF cutting the country’s growth target from 3.5% to 2.7%. In a recent major political development, Gotabaya Rajapaksa was elected President of Sri Lanka in November 2019, although the impact of this remains to be seen.
Despite these difficulties, the legal market remains active. Firms report that a number of infrastructure projects are underway and the implementation of the Inland Revenue Act – a major tax reform – is expected to drive an increase in direct taxation and government revenue. On the corporate side, there has been an increase in interest in restructuring work, notably for M&A mandates, while patents work has been prominent in the IP sphere.
Sri Lanka continues to be a difficult market for international firms, and is instead dominated by domestic firms that field close working relationships with foreign players, often providing a local perspective on cross-border legal matters. Full-service firms Nithya Partners, Julius & Creasy and D. L. & F. De Saram excel across several practice areas, while Sudath Perera Associates and LegalBase stand out in the IP market. Also noteworthy are Tiruchelvam Associates, John Wilson Partners and traditional powerhouses F. J. & G. De Saram and Neelakandan & Neelakandan (formerly Murugesu & Neelakandan).