Strict capital controls in place at all Greek banks are preventing the collection of legal fees owed to international law firms, the Gazette has learned as the country’s referendum result sets it on course to leave the euro.
The crisis is endangering transactions that are dependent on Greek parties or which use funds held at Greek banks, Dimitris Paraskevas (pictured), managing partner of international Greek law firm Paraskevas Law, told the Gazette.
‘Capital controls are causing huge problems with the payment of international suppliers, with permission needed from the authorities for any foreign payments.’
Transactions were being routed to foreign bank accounts wherever possible, with in-bound transfers credited to accounts held at Greek banks being impossible to access in full.
An additional problem for solicitors working in Greece is the strict regulatory ‘duty to ensure that client money is safe’. The referendum’s rejection of proposed bailout terms has increased the risk of bank failures, freezing of accounts, or of a ‘haircut’ for all bank deposits – a challenge for solicitors whose duty to protect client money is absolute.
According to Solicitors Regulation Authority figures, several hundred solicitors work in Greece, including those at international firms Allen & Overy, Clyde & Co, Hill Dickinson, Norton Rose Fulbright, Reed Smith, Stephenson Harwood, TLT, and Watson Farley & Williams.
Among Greece’s 40,000 lawyers, law firm partners are personally liable for meeting all of their firm’s financial obligations. Clients are commonly finding the fees are being demanded in cash, and pre-payment is being widely adopted.