Latvia’s defense sector is taking off, drawing fresh investments and reshaping legal work, while renewable energy projects move into full swing and law firms race to keep up with talent and tech changes, according to Partner Gatis Flinters.

“One of the biggest changes we’re seeing right now in Latvia is in the defense sector,” Flinters notes. “That’s probably the most significant shift, not just for lawyers, but for the country’s overall economic environment. It’s truly becoming a megatrend across Europe.” According to Flinters, “it all started as a huge challenge for many investors who had to figure out whether defense investments could be considered sustainable and ethically sound, especially when public or pension funds were involved.” Once that direction became clearer, he says, “it opened the door for the next stage: identifying opportunities for investment funds, launching new projects, and exploring the growing business potential in this area.”

“Right now, the sector still feels a bit like a startup community,” Flinters points out. “There are plenty of young, ambitious players trying to come up with new ideas. This stage requires a lot of legal support – not just for M&A work, but also for IP arrangements, early-stage investments, cooperation and procurement agreements, and more. At the same time, more established companies are starting to build up their capacities. We’re also seeing a trend of inward investments in defense: for example, a US producer recently acquired a drone manufacturing facility, and a Swedish defense company acquired an ammunition manufacturer.” He adds that these are the kinds of mandates no one could have imagined working on five years ago, and they’re profoundly reshaping how lawyers operate. “Specialized defense practice groups are emerging, trying to understand this evolving field and how to best serve it,” he notes.

“The energy industry is another area that continues to thrive,” Flinters emphasizes. “It’s been strong for a while, but what’s different now is that many projects have reached the Financial Investment Decision stage – the point where they’re actually being built or financed. This means a lot more transactions for renewable energy projects. The market is still dominated by institutional investors, while local lenders remain somewhat cautious and less assertive in this space. But overall, the energy sector is doing very well and generating plenty of interesting legal work. Some projects have been in the making for five years or more, so it’s incredibly rewarding to finally see them come to life.”

“If we zoom out a bit and look at the broader picture, two more major trends stand out,” Flinters says. “First, the fierce competition for talent – rivalry among law firms, both for mandates and for people, continues to intensify. What’s new is that firms are also having to invest in upgrading their infrastructure and integrating AI tools into their systems. That’s putting pressure on margins and changing how firms work. Larger law firms are finding themselves in a more competitive environment with second-tier firms stepping up and successfully competing for high-level mandates. In short, top- and mid-tier firms are doing relatively well, but smaller firms are really feeling the squeeze when it comes to both talent and client acquisition.”

Article: ceelegalmatters.com