Legal Landscapes: Slovenia- Mergers & Acquisitions

LUKA ZUPANČIČ

Founder and Managing Partner, Attorney Specialist for Corporate and Commercial Law , Zupancic Law


1. What is the current legal landscape for your practice area in your jurisdiction?

The current legal landscape in Slovenia is distinctly dynamic, complex, and subject to constant development, requiring law firms to demonstrate exceptional adaptability, specialization and continuous monitoring of changes. As such, it presents numerous challenges and opportunities for boutique law firms such as ours.

One of the fundamental characteristics of the legal landscape in which we operate is frequent legislative change and the influence of EU law. Slovenian legislation changes often, partly due to internal reforms and partly due to the necessity of harmonization with European Union law. This requires us to engage in continuous education and adaptation to new regulations. At the same time, legal advice must account for the direct effect of EU regulations and the significance of directives, which demands an in-depth understanding of the European legal order.

In the area of corporate law and mergers and acquisitions (M&A), the legal environment is marked by increasingly complex transactions, including cross-border mergers and acquisitions that require precise procedural knowledge. Understanding the relationship between general and special regulations is of key importance. Employment law extends far beyond classic termination procedures. Increasingly prominent are complex issues related to the status of management personnel and senior employees, where case law clearly distinguishes between the corporate-law and employment-law position. In M&A transactions, it is essential to master Article 75 of the Employment Relationships Act (ZDR-1), which governs the transfer of employees’ rights and obligations upon a change of employer and establishes joint and several liability. In the field of public procurement, the environment is moving away from the lowest-price criterion and encouraging innovation. The Public Procurement Act (ZJN-3), with instruments such as innovation partnerships, opens new possibilities for economic operators. At the same time, rules regarding contract modifications during their validity are strict and require precise legal advice to prevent unlawful material changes.

In dispute resolution, the emphasis is on efficiency. While court proceedings remain central, the importance of amicable dispute resolution is increasingly recognized. Mediation is gaining growing significance as an integral part of the legal system. Court proceedings in Slovenia, particularly civil litigation under the Civil Procedure Act (ZPP), are formalized and require strict adherence to deadlines and procedural rules. A delay in filing a preparatory pleading or in proposing evidence may result in the loss of a right, which demands exceptional discipline from parties and their representatives. The Constitutional Court has previously reviewed certain strict provisions, yet the general principle remains that procedural requirements are of paramount importance.

Increased regulatory obligations for lawyers are also present. Attorneys and law firms are obliged entities under the Prevention of Money Laundering and Terrorist Financing Act (ZPPDFT-2). This imposes additional obligations regarding client verification, transaction monitoring, and reporting suspicious transactions to the Office for Money Laundering Prevention (Article 100 of ZPPDFT-2).

In such an environment — marked by frequent legislative changes, procedural strictness, and growing regulatory demands — legal competence alone is no longer sufficient. Clients expect an advisor who understands complexity but also knows how to manage it: one who recognizes procedural risks but can prevent them in time; who commands the law but can explain it in plain language. This is precisely where we see the central space for the development of our firm.

2. What three essential pieces of advice would you give to clients involved in your practice area matters?

Based on our experience, our first and foremost advice to clients is to structure legal transactions carefully and act preventively. The most successful disputes are undoubtedly those that never begin. We advise clients to invest in a comprehensive legal review and preparation of contractual documentation before concluding significant transactions (M&A, real estate transactions, employment contracts, etc.). Proper structuring of contractual documentation can prevent many disputes from arising in the first place. In addition, the importance of a written trail must be taken into account, as oral agreements are difficult to prove and represent a significant risk. It is therefore highly advisable that all agreements, contracts, notices, and important communications are made in writing.

In mergers, acquisitions, and business transfers, comprehensive risk management is essential. Understanding liability for existing obligations is crucial. Clients must pay close attention to the provisions of the Employment Relationships Act (ZDR-1) regarding the transfer of employees and joint and several liability. A proper assessment of these risks is fundamental to determining the purchase price and warranties in a transaction.

In the event of a dispute, a strategic approach is indispensable. An immediate assessment of the situation and selection of the most appropriate strategy is of paramount importance — and that strategy is not always an immediate lawsuit. In resolving disputes, we encourage the use of alternative methods such as negotiation, mediation, or settlement. This can save clients time and financial resources while preserving business relationships, which is often more important than a court victory in itself. In this regard, complete transparency and proactive preparation are of great importance. It is essential that clients provide us, as their legal representatives, with all information and documentation — including that which may appear unfavorable to them. Only with a comprehensive understanding of the factual situation can we develop an optimal strategy.

3. What are the greatest threats and opportunities in your practice area law in the next 12 months?

From the threats perspective, mention must be made of the growing complexity of regulations, particularly in the areas of corporate governance, data protection, and environmental standards (ESG), which increases the compliance burden for clients and thereby the risk of sanctions. In addition, frequent and sometimes uncoordinated regulatory changes can create ambiguities and complicate business operations. This may also be reflected in shifting and inconsistent case law, which introduces additional legal uncertainty and makes it more difficult to predict the outcome of disputes and provide strategic legal advice.

Digitalization brings increased exposure to cyber attacks. As guardians of our clients’ confidential information, we must invest significant resources in information security to prevent breaches and data misuse.

From a macroeconomic perspective, economic uncertainty is also not negligible, as a potential cooling of the economy typically reduces the number of M&A transactions while increasing the number of insolvency proceedings and disputes arising from contractual non-performance.

From the opportunities perspective on the other hand, specialized advisory services in complex transactions must be highlighted first and foremost. The growing legal complexity, which is inevitable, is at the same time also an opportunity. A law firm that masters the interplay of corporate, employment, and tax law in M&A transactions can provide substantial added value.

The increasing environment dynamics is opening new market niches, within which new areas of law are also emerging and developing rapidly. Directing legal expertise toward areas such as information technology law, data protection, environmental law, and crypto-asset law enables us to offer services with high added value. In this context, intellectual property law must also be mentioned, particularly in relation to new technologies and innovation partnerships, which represents one of the promising directions for the further development of law and legal practice.

The economic rationality of both businesses and individuals demands not only sound legal knowledge but also economic risk assessment — especially in recent years, as pricing pressure has been steadily increasing. Clients are no longer merely seeking a lawyer to represent them in a given case; they are seeking a partner who will help them avoid a dispute or bring it to a close as swiftly as possible. This shift in client mindset is not merely a trend. It is a structural change in expectations. Consequently, for a law firm that builds on long-term trust and business relationships with its clients, a focus on preventive contractual advice and alternative dispute resolution, negotiation, and mediation is of great importance.

If client demands for efficiency — economic and otherwise — are creating appetite for a different approach to dispute resolution, it is technology that can contribute to the economic sustainability of such an approach. Technological development, advancements in artificial intelligence in particular, enables quicker and relatively precise searching and analysis of case law and legislation, drafting of contracts, and legal risk identification. However, this comes with an important caveat: artificial intelligence is merely a useful tool, the use of which must necessarily be guided by and subject to the critical judgment of its user — a judgment shaped by acquired extensive legal knowledge and experience of a professional lawyer.

4. How do you ensure high client satisfaction levels are maintained by your practice?

Client satisfaction is the foundation of our work, and we build it in several ways.

First and foremost, the emphasis is on high professional standards and dedication. Our team continuously monitors developments in legislation and case law. We approach every matter with the utmost care, aware that our client’s success depends on our expertise. This includes selecting the legally safest path to protect the client’s interests and presenting a realistic picture of the situation in each matter.

Proactive, transparent, and regular communication is also of great importance. We keep clients regularly and clearly informed about the progress of their matter, explain procedural steps, and provide a realistic assessment of possible outcomes and risks. We are also mindful that legal language is highly specific and often difficult for the average person to understand. It is therefore our responsibility to explain all the circumstances of a client’s case — and particularly complex legal concepts — in a clear and accessible way. We believe that a well-informed client is a partner in the process. Effective dialogue and a genuine understanding of client’s needs are therefore essential to long-term collaboration and trust.

Understanding the business context and the client’s operations is also of vital importance. We do not focus solely on the narrow legal problem at hand; we strive to understand the business context, objectives, and challenges of each client. This enables us to offer solutions that are not only legally sound but also commercially sensible, practical, and grounded in reality. We do not merely solve legal problems — we understand the broader business or personal context in which each client finds themselves. Emotional intelligence is, in the age of digitalization, an undeniable key factor of competitiveness.

5. What technological advancements are reshaping your practice area law and how can clients benefit from them?

Technology is undoubtedly transforming the legal profession and the way legal services are delivered. At the same time, we are mindful that technology is not a substitute for an experienced lawyer, but rather a useful tool that has to be used and guided by the critical judgment of a professional lawyer with extensive legal knowledge and experience. Administrative and organizational technology advancements in law firm management put aside, the following solutions among others enable us to apply our knowledge and expertise even more effectively in the interests of our clients:

i) AI-powered due diligence platforms — in M&A transactions, the use of advanced tools that automate the review of large volumes of contracts and other documentation is growing. This can accelerate the process, reduce costs, and increase accuracy in identifying risks.

ii) Case law analytics — tools for analysing judicial decisions allow faster and deeper insight into trends in case law. Clients benefit from this in the form of better-substantiated predictions regarding the likely outcome of a dispute and, consequently, better-informed strategic decisions.

iii) Document preparation automation — for standardised documents such as incorporation deeds, straightforward contracts, or intellectual property filings, it is possible to employ automation systems. This delivers lower costs, greater speed, and a reduced likelihood of human error for the clients.

iv) Digitalisation of public procurement and e-justice — we actively use and advise on the use of platforms for electronic submission of tenders and electronic filing of court submissions where legislation permits (or even requires). For clients, this means greater transparency, faster proceedings, and easier access to information.

By integrating these technologies into legal practice, a modern law firm can provide the clients not only with high-quality legal expertise, but also with a more efficient, faster, and cost-optimised service. As already highlighted, under the condition that it is used and reviewed by the critical judgment of an experienced legal professional.