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In the last year, the Albanian legal market has not seen a great deal of activity. In fact, there has been little to speak of. "There has been no change," says one partner, "we've seen more or less the same as before. It's a good sign for the moment. Stability is sometimes better than development."

The capital markets in the country have been at an embryonic stage for years. Despite having the legal framework fully in place, the financial market is not very effective. "The fact is, companies are not interested in listing shares," says one partner. Crucially, the lack of trust in the financial markets (a result of the public suffering big losses from failed financial schemes) hinders development.

Furthermore, there are few tax benefits and virtually no incentives for companies to list. "Our politicians make no effort or offer anything to change the situation," says one partner.

In the aftermath of the crisis, the banking system held up quite well. This was mainly due to the fact that the sector is comparatively closed and there is little integration into the European market. However, according to one partner: "There were psychological issues with the public. They started to withdraw [money] but this reaction stopped and for the rest, there was not much impact."

The banks also suffered a bit from real estate development projects and the lack of international investors saw projects delayed so there were delays in the repayment of loans. "There's a lot of reluctance to invest in the building industry, banks are not financing this," says one partner, adding: "Many buildings can't be finished or are not finished because of the lack of sale or financing." In this sense, there is the feeling that Tirana, especially, is "overbuilt".

However there is some interest from investors in the energy sector. To this end, there has been a good deal of purely private investments in renewables such as hydro and wind power. Concessions granted to local and some international investors facilitate such interest and lately there has been interest from Italian companies eying up Albania as a potential market for renewables to transfer back to Italy. M&A is the preferred approach for investors and it is the main way Italian companies access the Albanian market. Although there has been some activity this year (especially in energy), one should not be under any illusions, as such activity is described only as stable. Looking ahead there is hope for some new activity as the market anticipates a fresh drive toward privatisation from a government looking to rid itself of its remaining public assets.

In the legal market, one trend that has materialised is the lure of Kosovo with most of the high-end firms seeking to exploit the business opportunities that have arisen there. "Kosovo is a very young place. All the biggest firms have been there and tried to send their lawyers," says one partner. Other big news on the market is the demerger of last year's tier two firm, Zaka Kosta & Tashko Law Firm into Zaka & Kosta and Tashko Pustina. The market will wait to see how the two new firms fair and which areas of business they will target.

Established in 1994, Boga & Associates remains among the elite in Albania. Driven by Genc Boga, the firm has started to tap into the Kosovan market through its new office in Pristina, headed by partner Sokol Elmazaj. The move adds a new string to the firm's bow: "We benefit from all their possibilities, in Kosovo and the region," says one client.

Clients have generally been very pleased with the legal services offered by the firm. "They were capable and gave information and expertise. They took part in the meetings in the customer's presence and this was of added value. They were more experienced than us. Technically we rate them highly," says a client. Other clients are pleased with the firm's depth of knowledge: "They have much experience and also new staff who are qualified in specific fields. Sometimes this [added experience] is more profitable for us," says one client.

The firm advised Raiffeisen Bank on a €25 million loan agreement for the first important aircraft acquisition by an Albanian company.

The firm has also acted recently for the European Bank for Reconstruction and Development (EBRD). The bank has developed an investment facility to provide debt financing for renewable and industrial energy in the Western Balkans and in light of this, Boga & Associates advised the EBRD on a €6 million financing for the construction of two small hydro power plants over the Rapun river.

The firm also assisted the bank on a €2 million loan to brick manufacturer Volalba (an enterprise wholly owned by Italian company Albanova).

In M&A, the firm is currently advising Slovenian insurance company Zavarovalnica Triglav with regard to its acquisition of a stake in Albanian insurance company Alb-siguracion.

In project finance, Boga & Associates' Pristina office has been engaged in one of the biggest and the most important projects in Kosovo: the concession for the International Airport of Pristina (the only international airport of the country).

The firm has been praised by clients for being attentive to their needs and one described it as "accessible, responsive and wise".

Kalo & Associates provides clients with a sophistication that is rare in Albania. "I work with many law firms and I tell you, many law firms are a one man show, some are not well organised. Kalo is not like this. Kalo is organised. Several associates understand commercial law issues and can produce employment agreements and contracts," says one client.

The firm has displayed its strength in M&A after being involved in the major €633 million Delta Maxi deal which saw Belgian food retailer Delhaize Group buy all the shares in Serbia's largest retail company the Delta Maxi Group. After closing the initial transaction in February 2011, Delhaize then mandated the firm, which used a Chinese wall system, to advise on the acquisition of the Delta Maxi Group.

"They are very responsive. They act very quickly, they can move the deadline. We needed a short deadline and they managed it," says one client.

Furthermore, acting for the purchaser, the firm provided due diligence to Valeant Pharmaceuticals as the purchaser of the Albanian and Kosovo subsidiary of PharmaSwiss within the context of a wider €350 million global acquisition deal.

The firm is also strong in banking and finance, providing regulatory advice to various banks in Tirana and abroad. The firm is also recognised for its project finance work and has continued to act as legal counsel to the European Bank of Reconstruction and Devlopment (EBRD) and the International Finance Corporation (IFC) in relation to loan agreements and related agreements with CEZ, a large energy multi-utilities group.

In line with the market the firm has also exploited the opportunities offered by Kosovo. The firm has an office in the region and continues to act for Bechtel International and ENKA on a wide range of legal issues following their successful bid for the first ever large-scale public procurement for the construction of a motorway for €600-700 million.

Italian firm Tonucci & Partners has been active this year and is described as "pioneers" by some of its peers. Apart from the benefit of winning mandates from Italian clients, the multi-lingual firm prospers from its alliance with Mayer Brown and its regional network for cross-border deals. Driven by Marco Monaco Sorge and Neritan Kallfa, this year has been no different. Clients are pleased to engage the firm's network. "We like it very much when there is a broad menu," says one client.

There were however, elements of discontent when it came to the local team. "The Italian side was good. The local one has to improve here. They are not used to talking in front of the judges," says one client. Nevertheless, as another client says: "They are here. They are knowledgeable and have a good reputation." Artur Asllani is described as an "active and good lawyer" by one recent client.

The firm is described by clients as being technically very good, "accessible and responsive" and having the required "depth of knowledge". They are also considered good value for money with one client saying: "They were good value when compared with others."

Tonucci & Partners' strength for cross-border matters was exhibited in its deal list over the past year. The firm advised the EBRD (European Bank of Reconstruction and Development) on €36 million senior and mezzanine loans to TEG (Tirana East Gate -Shopping Mall). Furthermore, the firm advised Messer group on its expansion in Albania in the context of its takeover of Sofigaz, the Albanian subsidiary of the Italian gas group Sapio.

On the local front, the firm advised Plus Communication (the Albanian telecom operator) on a €35 million loan from a consortium of Banks including Raiffeisen Bank, Union Bank, Tirana Bank and Intesa San Paolo Bank.

According to competitors, Wolf Theiss has been very active this year. The firm benefits from its network and has attracted complex deals with the highest value on the market. Partners Sokol Nako and Endrit Shijaku have been the driving force behind such transactions.

At the hefty sum of €300 million, the firm advised Auto City (one of the largest car retail companies in Albania) in regard to an issuance of convertible bonds. The deal, which closed in September 2010, was significant in that it was the first issuance of convertible bonds in a large transaction in Albania. Moreover, the firm's innovation was on show as many of the features had to be tailored to the newly passed Albanian Company Law.

In project finance, the firm advised BAWAG on a €70 million syndicated loan to project company Energji Ashta, which is developing one of the largest hydro-power plants in Albania.

The firm's innovation was again on display when it advised Cosmote telecommunications on the purchase of a minority stake in AMC, its subsidiary in Albania. The deal saw the team set a precedent in regard to the protection of minority shareholders in controlled group companies in the context of Albania's new company law.

Still relatively new to the market, Hoxha Memi & Hoxha are developing rapidly and pushing for inclusion in the top tier. "I don't remember having any issues. If there are specific questions obviously more time is needed, but I've never felt unhappy with an answer. It brings comfort and as a foreign investor that is important," one client says.

The firm last year advised Energji Ashta Shpk on a €140 million loan agreement to the project company involved in the erection of the Ashta HPP (hydroelectric power plant). The firm also advised on a €7 million capital increase with new equity investment for Credins Bank relaunching the bank as a competitive entity in the sector. Furthermore the firm advised Vienna Insurance Group on the €7.5 million acquisition of InterAlbanian.

"Very responsive, professional and high quality, we're very satisfied," are the words of one client who adds: "Their price is reasonable for the service they provide. It is competitive." The partners of the firm have been part of the legal team that drafted the new Business Registration Law and the new company law of 2008. The firm continues to act as local partner of the World Bank's "Doing Business Project".

Shpati Hoxha (Leading lawyer bio)
Andi Memi (Leading lawyer bio)

Under the guidance of Krenar Loloci, Loloci & Associates remains in the second tier this year. The firm has close ties with the Albanian Government and gathered a lot of experience during the country's privatisation of strategic sector companies.

Apicella & Partners is a relatively young firm that is steadily growing. Ever since Berardino Apicella left Tonucci to set up office in 2007, he has been carving out a space for his firm in the market. "They deserve a little more," says one peer, adding: "The former Tonucci guy has good knowledge of the Albanian market."

Driven by Gjergji Gjika, Greek firm Drakopoulos Law Firm consolidates its position in tier three. Having recently joined the rankings, the firm is still relatively unknown to its peers. "Drakopoulos is more involved in trademark issues," says one such peer. However, with its commercial awareness, the firm is well liked by clients and one of its strengths is its ability to offer legal services akin to the Western-European or US law firm standard.

The firm advised Megatek in the €40 million merger of the largest DIY / Home Improvement Retailers in Albania with one of the largest import/export companies in the country. Furthermore, the firm advised Marinopoulos Group in the €9.5 million structuring and development of a retail and wholesale hypermarket in Albania.