Albania mania

Does Allen & Overy know something the rest of the City doesn’t? Alex Wade reports on the Albanian legal market

There is a road in Tirana, Albania’s capital, near the courts, that catches the eye. Not for the eclectic colour scheme of its buildings (a feature of much of the city); nor for the market that runs along one side, its hawkers bustling back and forth selling anything and everything.

No, this road – Gjergj Fishta – is notable for the endless array of lawyers practising on one side of the street, from small offices in buildings whose brickwork is crumbling and whose doors are almost always open, revealing nothing but a desk and a chair inside.

The words ‘Avocat’ and ‘Notare’ adorn one after the other of these buildings, often in bright yellow letters against a black background, giving the feel more of a hoarding for an amusement arcade than a solicitor’s practice. But whatever their offices may look like to Western eyes, people swarm in and out all day long, keeping these lawyers very busy indeed.

The chances are, however, that they are not engaged in complex multinational transactional work or international arbitration. The ‘avocats’ and ‘notares’ of Gjergj Fishta may, indeed, not even be fully qualified, having had funds to do only part of a law degree. If this may shock the austere denizens of Chancery Lane, they can take some comfort in the fact that many on Gjergj Fishta are simply helping people in Albania write official letters or visa applications. The quantity of actual legal work they undertake is small.

In a country with an average monthly wage (in Tirana) of around £210, there is a long way to go before law society rules and standards become the norm.

Which is not to say that Albania lacks a serious legal marketplace. There are a number of highly-regarded, reputable firms in Tirana, undertaking the full range of corporate and commercial legal work. They are run along familiar UK partnership lines and set their own standards of rigorous risk management. With Allen & Overy(A&O) having an office in Tirana, there is even an outpost of London. All of this would have been unthinkable just a little over 10 years ago.

Communist dictator Enver Hoxha ruled Albania for 40 years. Upon Hoxha’s death in 1985, his handpicked successor Ramiz Alia took the helm. Alia did his best to fend off the tide of reform sweeping Eastern Europe in 1989-1990, but eventually he was deposed in 1992.

Recognising that lip service should be paid to the reformers, he did, in 1990, recreate the Ministry of Justice, which Hoxha had decided was unnecessary in 1967. Under both Hoxha and Alia, lawyers had one option: to work for the state. There was no such thing as private practice, with the legal profession abolished by Hoxha in the same year as he did away with the Ministry of Justice.

The demise of communism brought chaos. Albania appeared to be slipping headlong into anarchy as its embrace of the free market went drastically wrong. However, after riots in 1997 the country began to settle down. Albania remains Europe’s poor relation, but it is stabilising. It has a flourishing media industry and is attracting overseas investment, particularly from the US, Italy and Greece.

Bearing witness to the country’s gradual emergence from Stalinist shadows, in 1999 A&O became the first premier international law firm to establish a presence in Albania when it merged with Italian practice Brosio Casati e Associati. The merger consolidated A&O’s existing expertise in Albanian matters, which had been developed since 1993 from its Rome office.

Historically, there are significant links between Italy and Albania, with trade over the centuries moving across the Adriatic from one country to the other, and now Riccardo Sallustio, an Italian-qualified lawyer, heads up A&O’s Tirana office. Sallustio is based in London, with the Tirana office run by Enyal Shuke, an Albanian lawyer.

Sallustio says that A&O has advised on a wide range of industry sectors in Albania, including banking and finance, oil, gas and water, commercial property, telecoms, agribusiness and privatisation.

The most complex in-structions came from Berlin-Wasser International, which was contracted to provide the water supply and waste water treatment for Elbasan, Albania’s second-largest city. This was the first water concession project in Albania (and the first major international project with which Sallustio’s client had been involved) and entailed grappling with seemingly innumerable legal issues, including: resolving ownership of a water system that was previously in state control; allowing for compensation for its exploitation; contracting for the build of a pumping station; organising state guarantees; and tackling the thorny problem of foreign exchange.

On top of that, Sallustio and his team had to draft appropriate legislation – Albania’s legal codes simply had nothing that dealt with concession financing. Sallustio spent over two years negotiating the deal, for much of which he was based in Tirana. Fortunately for him, one thing that Tirana has embrac-ed is Continental café society – there’s no shortage of places to get an espresso or cappuccino.

Indeed, the lure of Tirana proved too much for Genc Boga, the managing partner of one of Tirana’s leading practices, Boga & Asso-ciates. Boga had studied in France and could have remained to practise as a lawyer in Paris, but opted to return home and now runs a 20-lawyer practice.

As with A&O, Boga’s focus is commercial. His firm handles corporate, tax, licensing, M&A, construction and real estate issues. Unlike A&O, Boga also litigates, usually for banks. He has an impressive list of clients, including British Petroleum, Siemens and the European Bank for Reconstruction and Development, and for the past three years his firm has operated in association with KPMG, for which Boga & Associates is a correspondent firm.

“The relationship exists to ensure that clients have full access to problem-solving in Albania,” says Boga, emphasising that his firm maintains risk management procedures in keeping with Western standards. This is despite the fact that there is no obligation per se in Albania for law firms to have risk management policies at all.

Boga is a formidable man with considerable presence who used to practise with Perparim Kalo, now the managing partner of Kalo & Associates.

Kalo is cut from a different cloth; quieter, rather bookish, he has been intimately involved in remoulding Albania’s laws since he qualified in 1989.

Kalo has written extensively on Albania’s legal system, and if he appears very much the academic lawyer, this impression is belied by his client list, which again has a commercial bias. Kalo advised the UK’s Premier Oil on its set-up in Fier (Albania has rich, and yet very deep, oilfields, requiring state-of-the-art steaming technology), and has also acted for Italian petroleum company API Oil. Like Boga, he acts for many banks, but has also carved a niche in new media and technology, listing Reuters, Vodafone, Nokia and Ericsson as clients. Kalo is shortly to submit comments to Albania’s parliament on a draft electronic publishing law.

Kalo, Boga and Sallustio all agree that Albania has some way to go before its legal system can be regarded with complete confidence. This is hardly surprising in a country that has only emerged from a totalitarian dictatorship in the last decade. Albania’s laws are now largely a muddle of overseas codes imported post-communism, which may read fluently in abstract but are difficult to enforce. Laws that the West takes for granted – human rights, protection from sex and race discrimination, employee rights etc – are virtually unknown in Albania.

But just as smart new office blocks are going up in Tirana, bringing modernity to its skyline and money to its economy, so too is its legal marketplace developing all the time.

Sooner or later, the avocats and notares on Gjergj Fishta might find themselves outnumbered by their slicker brethren and, who knows, regulated by something analogous to the Law Society. Perhaps one day there will be rules about advertising ‘in keeping with the profession’ and on what qualifications they need. Which in some ways would be a shame, as you can have too much regulation.