Dear energy, conflict between Russia and Ukraine and a new government at the helm of Italy.
The last few months have been full of events and changes for the country, and in some cases this is generating worries and difficulties, especially for businesses. And even the law firms, which represent consultants for many companies, are trying to understand, amidst all these uncertainties, which sectors will be the sectors on which they will be called to work the most.
«The current international scenario is strongly conditioned by the pandemic, by climate disasters, by unresolved geopolitical crises, by inflation and by economic shocks which, especially in recent months, have led to heavy disruptions in global value chains», says Stefania Radou- ce, managing partner of the Tax and Law area of EY.
«On the other hand, there are also opportunities to be seized, especially in light of the transition towards more sustainable growth and the challenges this entails in all sectors, starting from the energy and digital innovation. In the coming months, therefore, lawyers will be very busy on everything related to sustainability and ecological transition, as well as on issues related to digital and innovation, with the new scenarios opened up by AI, Nft and Metaverse and the related legal repercussions . The evolution of the labor market and the transition towards hybrid corporate organizational models are also fundamental. Without forgetting that the transformation also passes, and in large part, from the Pnrr which requires the support of legal operators in the execution activities and in the grounding of the structural reforms, starting from the tax authorities».
In the sector of corporate operations and industrial, financial and real estate investments, the effects of the crisis remain limited for the moment and many of the deals in the field in recent months are expected to see positive completion by the end of the year. “We cannot exclude that the increase in energy costs and the war in Ukraine could have significant effects on various economic activities, even in a rather short time horizon,” he explains.
Guido Testa, partner and office leader of the Italian offices of Orrick, «It is realistic to hypothesize that in particular the increase in the cost of energy will lead in 2023 to performance in the industrial sector below expectations, with a consequent slowdown in investment operations. If this hypothesis were to occur, companies will probably need to rethink their debt structure, with the aim of having more resources to overcome the critical phase. Currently, Orrick continues to work at a very high pace on core corporate activities such as mergers, acquisitions, private equity, finance and real estate transactions; at the same time the tech sector is experiencing a phase of exponential and constant growth over the years. To date, we have not felt the need to reconsider our forecasts for 2023 and we remain positive on the law firm’s overall activity. It is possible that 2023 will see an increase in restructuring team activities for law firms, due to the need for companies to renegotiate their debt with banking institutions, and litigation, for the management of more delicate situations» . Another hot sector is that of ecological transition in the infrastructure sector. «The issue is transversal, both from the point of view of the sectors involved (from transport to local public services and health) and from the point of view of the legal instruments available (from tenders to joint ventures, from the concession of works to public leasing, passing through the simplification tools for the authorization of plants powered by renewable sources and the various forms of public-private partnership)», explains Fabio G. Angelini, founding partner of Parola Angelini , «A first example is represented by the strong interest we are registering for the installation of solar panels along the motorways. In the past, and also in Italy, initiatives of this type have been carried out with significant results in terms of energy production and in terms of socio-economic repercussions on the territories concerned, also providing a contribution to the so-called Nimby effect. It is a question of following this direction on a larger scale, combining the green approach with the social one, i.e. using the resources in the Pnrr as a lever to favor green investments and maximize the positive impact that the ecological transition can generate on the communities affected by these works. A second example is instead that of the health sector which, driven by the increase in energy costs, both in the public and in the private sector, requires
and invests in the field of redevelopment and energy efficiency interventions in structures. A phenomenon that undoubtedly affects large hospital complexes, often the subject of important Ppp operations, but also small realities (RSA, nursing homes, community hospitals, health centers) pre – feel on the territory whose sustainability is strongly endangered. In this ambit there are numerous opportunities offered by the legislation for the realization of new investments and for the strengthening of the network of social-health services in the area».
According to Marco Giustiniani, partner of Pavia e Ansaldo «in the coming months the law firms will have to face a double challenge: the first of internal management of the firms themselves; the second is instead related to the need to further focus one’s business on certain sectors which, as being driven, could be counted among the driving ones in the next few years. In relation to the internal profiles, the energy crisis and the war (with the correlated inflationary effects) will lead the management of the studios to pay greater attention to costs (for energy and the location of the premises in pri- mis) which will inevitably skyrocket in the next 18 months. In relation to the assistance profiles, the Studios will instead have to ‘come to terms’ with the sectors affected by the Pnrr. Indeed, the significant influx of economic resources that will be spent by the public sector thanks to European funding will lead to the need for spe- cialist assistance in the sector of public contracts: both on the adminis- trative side ni (in the organization and management of tenders), and on the private side (in advising companies in participating in tenders or contesting them before the courts). And this also by setting up dedicated focus groups or so-called structures. of missions transversal to several departments. Furthermore, indirectly, there will be an increase in interest in the sector of mergers and acquisitions of those targets consisting of companies that will become holders of contracts financed with the Recovery Plan”.
«In this period of overlapping and multiplying difficulties, we register an ever-increasing attention of companies to management control», says Francesca Pierleoni, partner of Sm&a, «with inflation and the growth of costs , raw materials and energy, companies equip themselves and go to leverage and pay more attention to the company’s work in order to improve their performance by reducing waste and inefficiencies . Professionals are required to work alongside clients to identify the most profitable sectors of the business and to improve the less performing ones, examining economic resources and production factors, ensuring the use of these resources in the most appropriate way . Although not mandatory, management control responds to important internal needs, in order to make decisions for the business and to overcome complex periods such as the current ones. Another trend that we register is related to smart working which is taken into consideration again by some customers because it can contribute to a cut in energy consumption and which consti- tutes, also for employees, a form of savings on consumption related to transport and in some cases a tool to improve the work-life balance of the same».
For Francesco Dagnino, managing partner of Lexia Avvocati «the limited impact of the pandemic and wars on the performance of business law firms have shown that it is an extremely resilient sector. Our forecasts for closing 2022 and for 2023 remain very positive. We expect a strong increase in jobs in the Tech, FinTech and renewable energy sectors».
Studies expect strong growth in the areas connected to the Pnrr measures.
«We expect a growth in the demand for services connected to the energy sector and to the recovery processes of corporate crises», says Giovanni Stefanin, co-Managing partner of PwC Tls. «In general, issues related to the ESG agenda should grow in all components. The last year was very active in the Middle Market segment where we expect growth to continue. Another area in which we have assisted various customers is that of renewables, infrastructure and logistics. It is evident that the general situation creates a climate of uncertainty which does not facilitate the investment decisions of companies, but we are confident that the new year can also confirm the current trend since the possible drop in demand in some areas such as M&A could be offset by the strong growth of other energy-related services, restructuring of debt and NPL portfolio transfer transactions».
As far as labor law is concerned, the issues pertaining to the reorganization of human resources should be observed. «The events of recent years have determined a scenario of precariousness and continuous evolution that forces companies to immediately rethink the organization of resources and, in a wider time horizon, to verify – mind the coherence with the market and the reference context», explains Marco Chiesara, senior partner of Lexellent. «I am thinking in particular of the need to proceed in the transition towards a world of work linked to the achievement of objectives rather than to respecting a fixed timetable, which will involve the need to structure processes of assessment and job management. I am not referring only to agreements for the implementation of smart working or to the identification of more flexible organizational methods, but also to the need to adopt procedures for identifying, communicating and assessing objectives and, closely connected to this, to the creation of remuneration plans that reflect the new work organization and reward the achievement of objectives. I also believe that the changed sensitivity, especially among the younger groups, with respect to the life/work balance on the one hand, and the economic and demographic, and therefore legislative, evolutions on the other hand, com- they will also bring greater attention to non-monetary remuneration elements and the need to build non-standardized welfare plans that guarantee personalization of remuneration. Finally, we are witnessing a new sensitivity towards inclusion, environmental and safety issues: all of this determines the need for companies to adopt policies, codes and regulations, aimed both at ensuring of the legislation, and to give testimony of its own policies vis-à-vis external interlocutors, both public and private».
The global landscape is rapidly evolving and it is no mystery that the Eurozone is in sharp contraction. «The impact that manufacturing companies are suffering from the shortage of raw materials, the increases in their prices and, last but not least, the exponential increase in the cost of energy is undeniable; and if we add to this the sudden disappearance of the Russian market, which is so important for our exports, the horizons are far from rosy», says Eugenio Bettella, founding and managing partner of Bergs & More – Legal, tax and business advisory,
«By contrast, there is a great interest from operators in the dollar area who, thanks to an extremely favorable exchange rate, are looking for opportunities in our market, both products and businesses. The digital trend is continuing its path by widening the challenge of companies on the online side where the traditional problems that historically characterized only the real world are pouring; let us also think only of digital marketing, of e-commerce, of counterfeiting phenomena in the various sites
Studies expect one strong growth in the areas connected to the Pnrr measures.
«We expect a growth in the demand for services connected to the energy sector and to the recovery processes of corporate crises», says Giovanni Stefanin, co-Managing partner of PwC Tls. «In general, issues related to the ESG agenda should grow in all components. The last year was very active in the Middle Market segment where we expect growth to continue. Another area in which we have assisted various customers is that of renewables, infrastructure and logistics. It is evident that the general situation creates a climate of uncertainty which does not facilitate the investment decisions of companies, but we are confident that the new year can also confirm the current trend since the The possible drop in demand in some areas such as M&A could be offset by the strong growth of other services connected to energy, debt restructuring and NPL portfolio transfer transactions».
As for the of-labor law, issues relating to the reorganization of human resources must be observed. «The events of recent years have determined a scenario of precariousness and continuous evolution that forces companies to immediately rethink the organization of resources and, in a wider time horizon, to verify – mind the coherence with the market and the reference context», explains Marco Chiesara, senior partner of Lexellent. «I am thinking in particular of the need to proceed with the transition towards a world of work linked to the achievement of
vi instead of respecting a fixed timetable, which will imply the need to structure work evaluation and management processes. I am not referring only to agreements for the implementation of smart working or to the identification of more flexible organizational methods, but also to the need to adopt procedures for identifying, communicating and assessing objectives and, closely connected to this, to the creation of remuneration plans that reflect the new work organization and reward the achievement of objectives. I also believe that the changed sensitivity, especially among the younger groups, with respect to the life/work balance on the one hand, and the economic and demographic, and therefore legislative, evolutions on the other hand, com- they will also bring greater attention to non-monetary remuneration elements and the need to build non-standardized welfare plans that guarantee personalization of remuneration. Finally, we are witnessing a new sensitivity towards inclusion, environmental and safety issues: all of this determines the need for companies to adopt policies, codes and regulations, aimed both at ensuring of the legislation, and to give testimony of its own policies vis-à-vis external interlocutors, both public and private».
The world landscape stands
rapidly evolving and it is no mystery that the Eurozone is in sharp contraction. «The impact that manufacturing companies are suffering from the shortage of raw materials, the increases in their prices and, last but not least, the exponential increase in the cost of energy is undeniable; and if we add to this the sudden disappearance of the Russian market, which is so important for our exports, the horizons are far from rosy», says Eugenio Bettella, founding and managing partner of Bergs & More – Legal, tax and business advisory,
«On the other hand, there is great interest from operators in the dollar area who, thanks to an extremely favorable exchange rate, are looking for opportunities in our market, both products and businesses. The digital trend is continuing its path by widening the challenge of companies on the online side where the traditional problems that historically characterized only the real world are pouring; let us also think only of digital marketing, of e-commerce, of counterfeiting phenomena in the various sites
you, to the scams that are consumed every day on the web. In this difficult panorama, it is not easy to identify future trends since we have often learned that while we prepare for a certain type of situation, something else happens. But if we have to make a forecast, the dispute is certainly destined to grow; there is an undeniable contraction of cash in companies, even if only due to the effect of the recent weight of gas bills and the price increases that the market is struggling to absorb and this, by now, is well known to be transformed in payment deferments poorly digested by suppliers and instrumental disputes; also constantly increasing are the disputes deriving from the impacts on the contracts in progress due to the defaults linked to the long tail of the Covid, before, and the recent evolutions in the market of the supply chain, now. Restructuring will certainly experience a new wave, even if only to freeze the serious debt situations and safeguard the core business. And consequently the trend of restructuring and distressed M&A will reappear, especially in the manufacturing sectors where, moreover, the big luxury brands are rounding up companies to consolidate their supply chains, enhancing them and making them grow according to more virtuous and sustainable business models. The difficulties of the Eurozone and an incentive exchange rate for exports in the dollar zone together with the need to replace the Russian market as soon as possible will lead many companies to look for new markets; Usa, Gulf and Africa in primis, for various reasons but above all because they are receptive markets strongly interested in Italian products of all types, from food, to fashion, to supplies, to building materials, to machinery and, last but not least, to plant engineering. The internationalization processes will therefore also continue along their path with the need for assistance on the aforementioned markets pending the return of those that have frozen in the meantime. Lastly, digitization will be an incredible driver: presumable
a doubling of volumes because it is now an indispensable work tool, which requires not only technical but also legal assistance at 360 degrees, not least with regard to compliance with increasingly stringent Community regulations – people (b
asta mention those relating to payments, data protection and cybersecurity)”.
For Luca Tufarelli, managing partner of Ristuccia Tufarelli and Partners «the pandemic has left visible signs in particular in the organization of work and in the digitization of the same which, with the current phases of change and uncertainty, take root, becoming in the case of our studio, a strength. The use of remote collaboration tools and work divided into phases and with activities to be carried out asynchronously but in parallel between the various collaborators, have become an essential element of the offer to isti customers. – tu- tional that expects those modalities also in the interaction with its own structures. In this perspective, the relationship with the customer has become more efficient and also more challenging because not only has people’s productivity increased but the times for performing services have significantly reduced. This way of cooperating with the outside makes the evaluation of the professional’s effort more transparent because it has significantly increased the moments of confrontation with the client.
Hence the expectation of institutional customers to obtain a service at correct and real costs that are often more contained and with shorter times. This new organizational model then prompted customers to request more and more legal design advice on the digitization of processes including compliance in this matter to ensure safety, traceability and correct archiving of the computerized documentation produced as well as of the actions carried out in the ambit of administrative procedures. It is now a fact that the customer can work in a disjointed context with full access to all information sources, processes and digital tools available today. An epochal change is underway that will have major impacts on the survival of studies incapable of organizing a rapid, collaborative response based on the use of modern digital systems and tools”.
There is recent news that the Italian economy in the second half of 2022 recorded a growth of +4.6% compared to the previous half-year and is a candidate as a leading economy among the G7 countries for the year 2022. «However, the forecasts are not so rosy for 2023, as inflation continues to be the central theme for the global economy with a sharp increase in the risk of recession», says Andrea Accar – do, partner of Slata Studio Legale, «The uncontrolled increase in the prices of materi- als, raw materials and energy costs that has already lashed the production, trade and construction sectors in 2021 and 2022 , giving rise to some extraordinary interventions by the Government, does not seem to let up even in the light of the news coming from the Russian-Ukrainian war theater. This crisis scenario is a reason for profound reflection and reorganization of law firms. In fact, if high prices have been a daily topic for at least a year on the table of professionals dealing with administrative law and tenders, also in the Pnrr perspective, in general the crisis will impact on strategic choices and of investment by companies and on the expenditure and priorities of citizens, and therefore it will concern every area of the law. In this context, firms will be suc- cessful if they know how to direct the expenditure that clients allocate to legal assistance, preferring strategic and decision-making consultancy, and disincentivising recourse to contentious justice which suffers serious dysfunctions for years, the resolution of which the recent enabling law does not seem to be able to affect».
