IFLR 1000
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While the world around it continues to change dramatically, Iran's legal market remains stable.A lack of substantial foreign investment continues to be the main barrier to expansion both in the number of law firms and their individual size....

While the world around it continues to change dramatically, Iran's legal market remains stable.

A lack of substantial foreign investment continues to be the main barrier to expansion both in the number of law firms and their individual size. International sanctions are one of the key reasons for this, as one partner explains: "Since last year they haven't notched up the sanctions but the sanctions do put people off investing in Iran." The US presidential election was highlighted by some partners as a reason for a slight increase in investor interest. "Over the last month or so, we have been getting a lot of instructions from companies that didn't want to invest a year ago," says a partner.

Some firms see potential for work coming from investors based in emerging jurisdictions. As one partner says: "We're seeing a shift towards the eastern side of our borders, creating links with China, India and the Middle East."

Another possible source of work is the privatisation of companies through the use of Iranian legal doctrine Principle 44 – although up to now progress has not been as fast as many would have liked. "The government was reluctant to give up these cash cows; also there are not many companies to privatise," explains a partner. Other reasons the lawyer cites are, "inefficiency ... the companies are basically insolvent; and the credit crisis."

Some have a sense this is changing however. "There has been progress," says another practitioner: "We have seen it in the last few months and weeks – Iranian banks being listed on the stock exchange."

Lingering political uncertainty makes any long-term trends impossible to predict but many firms feel that a more liberal economic policy would help their cause. "We would like to see the government adopting less radical policies. If the government put less emphasis on nuclear and other things the economy would improve," says a lawyer.