The Slovak legal market is being pulled in two directions at once at the moment – inward by the practical realities of AI adoption inside law firms, and outward by geopolitical uncertainty that’s cooling foreign investment, according to Taylor Wessing Co-Managing Partner Andrej Leontiev.
"The environment is complex; we’re dealing with both global and distinctly local factors," Leontiev begins. "On one hand, law firms and clients alike are grappling with the practical integration of AI; not just which tools to adopt, but how to price AI-assisted legal services, adjust internal workflows, and address liability. Questions such as whether clients must be explicitly informed of AI use, or whether this changes the general terms of business, are still open. It’s a much deeper shift than simply choosing the right software; it’s redefining how legal work is structured, billed, and managed," he explains.
Going beyond technology, Leontiev focuses on what's driving the business sentiment in Slovakia right now, saying that geopolitics has become the dominant factor. "The war in Ukraine and the resulting regional polarization have exposed a lack of clarity in Slovakia’s own geopolitical orientation. While countries like Poland or the Czech Republic project a clear, pro-Western strategic vision, Slovakia’s position appears more ambiguous, and that uncertainty makes international investors cautious," he posits. "We see multinationals scaling down or halting previously approved projects due to fears about long-term stability or potential escalation in Ukraine. This directly impacts foreign direct investment flows, which in turn affects M&A and transactional work, particularly for international law firms."
Focusing on how this reflects in the legal market’s day-to-day business, Leontiev reports that, "for firms like ours, the shift is tangible. M&A has slowed significantly, while operational mandates, labor law, restructurings, redundancies, and factory closures have become more frequent." According to him, this mirrors a broader economic slowdown and a more risk-averse investor sentiment. "Over the next three to four years, we expect continued uncertainty as elections approach and potential reforms won’t show results immediately. Law firms are therefore focusing on cost control, with rising personnel expenses putting additional strain. Compared to neighboring markets like Austria or Poland, costs and salary upticks here have been faster and less linear, increasing pressure on margins."
Considering potential structural changes within the Slovak legal market in the future, Leontiev shares that consolidation could be on the horizon. "Some international firms may exit, while senior partners at local firms might transfer ownership to younger lawyers to maintain profitability as the overall 'cake' gets smaller. The political landscape also matters: firms closely linked to public-sector contracts continue to grow, often showing double-digit revenue increases, but those relying on purely private work are under stronger financial pressure. We would wish for a more level playing field and less distortions by politically motivated tendering of legal services," he elaborates.
Still, looking ahead, Leontiev does see potential for positive opportunities. "One interesting development is the increasing presence of Chinese entrepreneurs, a politically sensitive but potentially lucrative trend, similar to what we’ve seen in Serbia or Hungary. Our firm, with offices in China, is well-positioned to handle these clients, including cultural nuances in M&A and joint ventures. Beyond that, I believe Slovakia’s defense industry could become a future growth engine." As he explains it, the country has strong manufacturing capabilities, historically tied to the automotive sector, which can easily pivot to defense production. "We’re already seeing activity around ammunition supplies to Ukraine and renewed investment in domestic defense capacities. If I were to bet on one sector that will grow in the coming years, it would be defense; it may well become one of the future pillars for Slovakia’s economy."
