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With a population of two million, the Republic of Slovenia is a small country with a small legal market. The majority of foreign investment that enters the country comes from either Austria or Germany....

With a population of two million, the Republic of Slovenia is a small country with a small legal market. The majority of foreign investment that enters the country comes from either Austria or Germany. In such a small market, the presence of a handful of high profile entities has an amplifying effect. "Slovenia is a small market, so big entities like Société Générale and Renault have a big presence," one partner says.

The economy in Slovenia is still stagnant. "This is due to the political situation. The government is not stable and things move because life has to go on," one partner says. However, there has been talk of initiatives to privatise with the state attempting to sell stakes in insurance and energy. "It's not like European privatisation," says one partner, adding: "The state is an indirect owner [in relevant companies] and to exit certain investments is problematic." An important avenue for privatisation lies in the banking sector and the government has important stakes in Nova Ljubljanska Banka and Nova KBM, the country's two largest banks. It is possible that the privatisations might occur in the form of IPOs. In fact, this was evidenced by Nova KBM 's €104 million IPO that was dual listed on Ljubljana Stock Exchange and the Warsaw Stock Exchange.

There hasn't been a significant shift in the bank's stringent approach to lending. Banks are raising loans on foreign markets and so money is still arriving. However, when it comes to retail the point is most poignant. "Slovenian banks are always conservative in terms of retail," says one partner, adding: "The number of cases where we act for banks when creating securities, mortgages has decreased a lot."

There has been a slight pickup in M&A activity. This is particularly so with regard to international deals where a Slovenian subsidiary is involved. There is hope and quiet optimism on the market that domestic transactions will gradually increase. "Transactions are more and more with different expectations in terms of prices, a lot higher. Transactions are becoming more complex," one partner says.

Restructuring and insolvency continues to be an area that is a source of much work for lawyers. The Slovenian air carrier Adria Airways is in deep financial trouble and a lot of restructuring work will need to be done. "A lot of financing is involved. All the aircrafts are leased and not owned," one partner says.

In construction, the sector is "more or less bankrupt". All the major players are in bankruptcy or have been ahead of the pack. "This does not create work other than restructuring," one partner said. Real estate on the other hand is interesting. As a consequence to the crisis, various projects were put on hold. However, many have restructured and now there is discussion to get them going again in a piecemeal "step by step" manner. "Real estate is not booming but it's coming back," one partner says.