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Latvia is another Baltic market that has struggled to shake off the after-effects of the financial crisis. The country has almost served as a less dramatic version of the story in Greece, with the introduction of tough new laws to help address its mounting debt problems....

Latvia is another Baltic market that has struggled to shake off the after-effects of the financial crisis. The country has almost served as a less dramatic version of the story in Greece, with the introduction of tough new laws to help address its mounting debt problems. "We have toughed it out with the austerity measures," says a partner, "and most people acknowledge that they were necessary."

Things are still very difficult in Latvia though, with those active in the market very downbeat. "I am not so optimistic about the Latvian legal market as a whole. We still feel the crisis," comments one partner glumly.

The endemic political instability also adds to an uncertain climate in the country: "There will always be some form of political instability because of our system. There are too many parties and it is hard to get a majority," says one practitioner, while another explains the issue of why getting investment is difficult: "It's the dilemma of a small market, whether there is a valid reason to locate here. There is no critical mass, so in places like Russia and Poland they can afford loose ends - they have a toleration of uncertainty."

"It's a constant battle, as deals are fragile and clients are sensitive to risk and fees," says another partner.

There is something to cling to in terms of investment though, with a traditional trading partner with Latvia showing signs of interest in certain areas: "There is to be a certain amount of investment directed at infrastructure, port and transportation. Russia is very interested here."

Overall though, the economy has been slow, but it hasn't been a complete write-off for firms, with the banks becoming slightly more open to providing financing.

"Banks are beginning to lend again. They make the case that they were always open to lending but they wanted it going to the right people with the correct business plan," says one lawyer, while another agrees: "Proper credit isn't a problem, easy credit is."

"There has been new money coming in over the last nine months. There was some political pressure to get banks lending again. This has helped the economy get back on its feet," explains one partner. There is also a trend for venture capital providing funding in this area, challenging the banks.

As was the case in Estonia, some people active within the market actually believe that the government is inhibiting attempts to help the economy recover. "I, and the public, are critical of how the government conducts this situation. They are squeezing our business people and making sure there is no new employment. They are stopping us making things better," says one partner, while another says: "Strong legislation has increased taxes and put in place cuts, which does affect the economy of course."

This spate of new legislation has brought some positives however. "There is a new business rescue and insolvency law. Latvian law before didn't provide for bank rescues and this remedied that," explains a practitioner.

Another bright spot is Latvia's re-entry in the bond markets, raising almost €345 million in an offering this year. "Latvia is back in the bond market, so that shows where we are," comments a partner. This is seen as a positive step, and it will be hoped that this signals an increase in investor trust in the Latvian market over the coming 12 months.

All in all, it's been a year where firms have tried to hold ground and consolidate, leading to a bit of stasis in the legal market. "You know, there hasn't been too much activity or movement in the market so things are stable," comments a partner, while another concurs: "There is a type of market equilibrium here, in that not much has changed."