As a founding member of the G7, the Organisation for Economic Co-operation and Development (OECD) and what is now the European Union, Italy has long been at the forefront of the economic and political development of modern-day Europe. Like many countries in the region, the 2008 financial crisis hit the country’s economy hard, and the struggle of Italian banks to regain their former position has long been a pertinent topic of discussion among the country’s legal community ever since. Despite the damage caused to the financial services industry, the Italian economy has fought to recover, leading to an increase in demand for legal services. With a nominal GDP in excess of $511.8 billion at the end of 2017, Italy is the world’s ninth largest economy and the third largest in the eurozone, demonstrating its position as a key player in the global market. This year the annual IBA conference will be held in Rome, providing a big opportunity for the Italian legal community to demonstrate its capabilities to the world. Rome has grown into a top destination for the international business community, spurring the growth of domestic legal outfits and attracting international players from across the globe.
Even after 10 years, Italy continues to feel the effects of the financial crisis, and lawyers across the country have been forced to adapt in order to meet the changing demands for legal services. Perhaps most notably, the banking crisis has led to a number of important developments in the corporate restructuring market. In October 2017, the Italian Parliament formally approved a delegation law (Law 155), instructing the government to adopt a number of reforms to the insolvency and pre-insolvency procedures within 12 months. At the time of writing the provisions of the law have not yet been enacted, likely in part due to the Italian political crisis, exacerbated by the 2018 general elections in March. The newly elected Parliament will likely need to reapprove the provisions for the new government to enact the new measures. However, despite delays, there is nothing to suggest this will not go ahead. Practitioners we spoke to voiced uncertainty over how Law 155 would affect the market, with one commenting: “Such a reform will constitute the creation of a completely new regulatory environment for banking, essentially creating a new market altogether.” Given that the majority of Italian bankruptcy and insolvency legislation dates back to the 1940s, an update is eagerly welcomed by practitioners in this space, who expect no shortage of work in the year ahead.
The energy space is another area which has seen an uptick in activity, and is only expected to grow. In parallel with the European decision to boost the renewable energy market, the Italian government has proved proactive in implementing policy measures to meet its targets despite the present political instability. Lawyers in this space have noted a the potential for a “huge and interesting secondary market”, indicating a positive outlook for the future. Global M&A activity in the renewables sector is expected to rise dramatically over the coming year, and Italy is likely to be no exception. Practitioners note that “the M&A market in this space is really starting to open up”, predicting bigger deals and projects filling the year ahead.
“Made in Italy” is internationally renowned as a hallmark of quality, and the demand for Italian goods has driven the country’s creative and innovative manufacturing industry. With the jurisdiction’s prominence in the automotive and fashion sectors, as well as a burgeoning pharmaceutical industry, intellectual property specialists are becoming ever more important within the Italian market. In recent years, adequate protection of IP rights has been a growing concern for the international business community. Italian lawyers that we spoke to are handling large caseloads of complex IP infringement proceedings, as well as advising on the management and enforcement of increasingly large IP portfolios. Despite the uptick in IP work, many practitioners noted that they were feeling the squeeze as the market becomes increasingly crowded, highlighting the need for firms to have a competitive edge through increased specialisation and expertise in order to succeed.
The introduction of the European General Data Protection Regulation (GDPR) in May 2018 is widely considered to be the biggest shakeup in the area of data privacy in the past 20 years. Unsurprisingly therefore, this new legislation was a key theme running through our research this year. Lawyers specialising in this area noted an “incredible increase” of advisory work on compliance issues for clients of all sizes. One leading data expert told us: “In Italy there are a number of large companies and many more small and medium-sized enterprises that have not yet started the process of implementing the new guidelines.” With the introduction of greater sanctions for non-compliance when the regulation comes into force the market is growing increasingly frantic, emphasising the central role lawyers in the jurisdiction will play over the coming year.
In highly technical industries such as the technology and life sciences areas, practitioners have noted that the past year seen a continuing segregation of the legal market. Notably, small and medium-sized domestic businesses seem to be favouring local firms and boutiques, who increasingly fit their tighter financial restraints. In contrast, larger corporations are seeking out international outfits with the facilities to satisfy growing expectations for efficiency, quality and coordination in other jurisdictions. Lawyers we spoke to described “a real divide between the local boutiques and the international players”, leading to the formation of “two distinct legal markets”. The past year has amply demonstrated the growing importance of large multinationals in the Italian market. For example, the start of 2018 saw international powerhouse Herbert Smith Freehills open its first office in Italy, to capitalise on the burgeoning IP market. With international players demonstrating more and more interest in the Italian market, the outcome of this remodelling of the legal landscape in Italy remains to be seen. As one lawyer put it: “This is only the beginning.”