UK firms dig in their heels

There’s nothing like a bit of protectionism for stirring up ill-feeling. As our lead story details, what started out as a group of Bulgarian firms marking their territory against an influx of foreign competition has turned into a full-scale battle, and each side is utterly incensed at the other’s actions.

The Bulgarians may have a point – it can’t be easy watching foreign firms with large international ­networks win mandates in what is, after all, one of the world’s smaller legal markets. And the country’s court system certainly seems to support the local firms’ view that UK firms in particular have an unfair advantage over them.

The problem is that, by acting as it has towards CMS Cameron McKenna and DLA Piper, the ­Bulgarian Supreme Administrative Court appears to have infringed European laws on EU lawyers being allowed to benefit from the same regulations regardless of the country they are in.

In the UK the Bulgarian attitude has been ­greeted with contempt, with Law Society president Paul Marsh saying he “rejects” the court’s decision to uphold fines against DLA Piper and Camerons. But the Bulgarians don’t appear keen to back down, with the country’s competition commission ­looking to have fines against two Austrian firms reinstated, in spite of the court striking them out.

To accuse the Bulgarians of xenophobia would be missing the point, when local firms are clearly just trying to protect their market at a time of already heightened competition. But given that the foreign firms are unlikely to be competing for the same work as the domestic players, the local firms may have shot themselves in the foot by taking such a protectionist stance.

Far from persuading the firms involved to cease operating in Bulgaria, the turf war has only served to strengthen the foreign firms’ resolve to stay put.
“We believe our clients deserve a high level of ­professional service and there’s no reason to stop serving our clients in Bulgaria,” says a defiant Anna Rizova-Clegg at DLA Piper.

At a time when UK firms are reassessing their Eastern Europe operations (Clifford Chance and Linklaters have both closed offices in the region), that’s no mean feat.