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Estonia, like many other jurisdictions this year, is starting to see more optimism in the market, with the majority of restructuring and distressed work completed and the quest for new investment gaining some early wins."In general it is fairly good, the market is getting more confident, and banks are lending again....

Estonia, like many other jurisdictions this year, is starting to see more optimism in the market, with the majority of restructuring and distressed work completed and the quest for new investment gaining some early wins.

"In general it is fairly good, the market is getting more confident, and banks are lending again. We do a lot of trade with Finland, Sweden and to a lesser extent Russia and these are doing OK," says one partner, while another adds: "For the time being, the market is recovering. The number of new loans is up."

As ever though, there are always those who try to look at things a little more pragmatically, with one partner commenting: "Overall, the number of deals requiring lawyers has gone down," while another lawyer points to more global problems as an influence on Estonia: "The future is still a little uncertain. Problems in other countries like Greece, Spain and Ireland have an effect here".

The big story this year has undoubtedly been the adoption of the Euro, which was officially made the legal tender on January 1 2011. The move is seen as a positive one, by and large, with partners almost unanimous in their acceptance of the new coinage.

"Having the Euro is good, as it shows a lot more stability to foreign investors. I feel it can only have good consequences," says one, while another agrees: "Entering the Eurozone has had a positive effect on the country's credibility. We have been shown to be one of the best out of the EU countries in terms of budgeting too. By meeting these criteria it makes people look closer at Estonia."

"In broad terms it hasn't got much attention or made much affect on the market. We did have quite high inflation with the Euro but it's coming under control," comments another partner, showing that the Euro was not an unqualified success. Another lawyer was practical about it: "Although it is a good thing that we have taken the Euro, there has been no boom or anything like that".

One much talked about trend that has emerged from the market this year is the increasing tally of M&A work; a "climate of corporate expansion" as one partner puts it. There have been some sizeable M&A transactions, though with the incipient comeback of new finance, things might level out over the next year.

It also appears that Estonia is trying to position itself as a frontrunner in the technological sector: "Estonia wishes to be an IT tiger," says one partner. There has been a reported uptick in interest in intellectual property rights (IP) and internet gaming ventures, and this is definitely a continuing development in the market.

In a legislative sense, not much has changed materially, a lot of that down to this year being an election year, which reinstated the extremely well regarded government in Tallinn. "The commercial code changes are an ongoing process, always changing, but there have not been any traumatic changes due to the elections," says one partner on this.