Founded in 1997, Esin Law Firm has over the past 14 years grown to become one of the premier corporate law firms in Istanbul. Esin Law Firm’s main practice areas are M&A, corporate law, dispute resolution, competition law and real estate, and the firm works with prominent counsels and advisors in other areas of activity. The firm is creative, dynamic and solution-orientated and uniquely combines solid legal knowledge with its capacity for understanding business matters to serve its clients in the most effective manner. The firm has a passion for excellence in legal services and strives to create added value for its clients.
In 2010, among others, the firm received awards from the Financial Times, Mergermarket and this magazine, recognising it as the best M&A law firm in Turkey. As well as dealing with domestic clients, it acts as a local partner for international law firms carrying out transactions in Turkey thanks to its fully independant and long-standing relationships with those law firms. Consequently, it is ideally positioned to assist clients in cross-border transactions.
Before establishing Esin Law Firm, Dr Esin studied law at the University of Istanbul, before undertaking his LL.M degree at Tubingen University Law Faculty, Germany. He subsequently returned to Istanbul as a teaching assistant at the university, where he remained for four and a half years. He then decided to gain a PhD, where the focus of his research was the liability of the seller in mergers and acquisitions. With this expertise he returned to Turkey in 1997 and established Esin Law Firm with two partners – both of whom remain with the company today. He lectured on Civil Law and Law of Obligations between 1992 and 2004 at the Marmara University Law Faculty and gave graduate lectures on M&A transactions at Galatasaray University in 2005 and 2006. He also lectured at Bilgi University on M&A between 2001 and 2009. Since 2008, he has lectured at Bahcesehir University on financing models at graduate level.
Focus for understanding
Dr Esin makes a point of underlining the fact that Esin Law Firm is not a full service firm. Instead it is concerned entirely with corporate law, with a particular focus on mergers and acquisitions. “60 percent of our income is purely from M&A transactions, with 60 percent of our lawyers handling these cases at any one time,” Dr Esin says. “We take interest in both domestic and international litigation and arbitration in this area, as well as competition law and real estate law. Of course, we sometimes have to deal with related areas too, such as capital markets, acquisition finance and so on, but these are only in relation to M&A.”
This is an important point of differentiation for Esin Law Firm: focusing on this area of speciality has allowed it to develop a deep technical knowledge that surpasses many competitors. Indeed, the knowledge of the firm in this field is so respected that three of the four partners are either currently university lecturers, or have taught at that level in the past. “Thanks to this level of engagement not just at a practical level but also at a theoretical level, we as a firm are able to see and analyse the legal landscape better than many others. This allows us to identify changes, opportunities and potential challenges ahead of a number of our competitors,” explains Dr Esin.
A second point of differentiation that Dr Esin is particularly proud of is the amount of time given over to the training of young lawyers at the firm. “One of the main things we try to avoid and try to discourage in our junior associates is a ‘copy and paste’ mentality, where large sections of old documents are simply imported into a new one,” he says. “We insist that they think before they act and this is the foundation of our training. The phrase ‘but we have always done it that way’ is forbidden here! If you keep that mentality, then accidents and mistakes can end up becoming ‘truths’ that are repeated again and again without thought.”
The mantra of not doing things in a certain way simply because that is how it has always been done and giving attention to detail is also important with regard to due diligence. Of course, this is a crucial part of an M&A transaction, but confounding factors can rise up and derail a deal if everything is not carefully scrutinised. There are basic elements such as laws regarding tax liability and whether it falls to the buyer or the seller to pay this duty. There is also a problem in Turkey with companies not necessarily maintaining their documentation and tax records in the way that they should be – pieces may be missing, or it may not be up to date. “In these situations, it can be a real headache trying to get a meaningful due diligence done. This is the first challenge we face at the initiation of an M&A transaction,” explains Dr Esin.
Devil in the detail
While this is a challenge and an inconvenience, there are even greater issues that can arise. Occasionally, a company may be in the position where it has more than one share ledger, with each one listing different shareholders. “The question in this situation is, well, which share ledger is the buyer purchasing? Which of these three or so ledgers has the correct share listing? You do not want to be in a position where, a few months down the line, a third party appears saying ‘Ah no, my friend – according to this ledger I am the majority shareholder and it is I who owns the company, not you.’ So attention to detail is vital.”
Because of these possible issues, Dr Esin also emphasises the importance of co-operation and communication between the takeover negotiators and the firm carrying out the due diligence: “If there is no link between these two sets of people, it can cause real problems.”
While the firm is very well versed in its business, the recent introduction of two new legal codes will have an effect, to a greater or lesser extent, on M&A transactions. “The Turkish Code of Obligations will not really have a big impact on us, as it is mostly concerned with banking elements. It is also not dissimilar to the existing regulations,” says Dr Esin. “The Turkish Commercial Code, however, does represent a real change in the legal landscape. It will have a significant impact especially on the shareholder agreement structures.”
This particular code drastically changes the rules governing company structure, operations and corporate governance. As a result, all Turkish lawyers have had to go back and ‘re-learn’ their own laws as this code is a complete revolution on what came before. “Within Esin Law Firm, we have developed some training programmes for our lawyers with the atendance of professors of the highest calibre,” says Dr Esin. “We have also hired some counsels who worked on the drafting of this code to help ensure all our staff are up to speed. Basically, we are ensuring that we are well prepared for when these two codes come into effect next year.”
And what does the future hold for a law firm that is internationally recognised as one of the best in its field? Well, growth is on the cards, but not at any cost. “We have always maintained that we would rather have to turn down work than ruin our reputation. In this business, reputation is everything and that is what will bring clients to your door, even if you have to turn them away sometimes due to our workload. While everyone working at Esin Law Firm is expected to work very hard, we take care not to overload ourselves, as that is when mistakes happen. Esin Law Firm’s quality orientated approach with respect to rendering legal services distinguishes the Firm from its tiers. In order to ensure such quality, partners lead every transaction in detail and are involved in every meeting, conference call and thus fully focus on each and every detail of the projects.”
Nevertheless, the firm is expecting a 43 percent increase in the number of deals it closes by the end of the year. “In 2010 we closed a total of 14 deals. This year we have already completed eight transactions and expect that number to rise to at least 20 by the end of the year.”
Over the next five years, Dr Esin is expecting an increasing number of big international law firms to set up offices in Istanbul – but he’s not worried. “In terms of competition, even if 10 or 15 global firms enter into the Turkish market, there will still be at least another 20 without a local office who will want assistance from someone like us on a transaction. The most important thing is for us to ensure that we are in a strong position with excellent staff and a reputation for outstanding service every time. You can never look too far into the future, but with that as our foundation we are confident of our success.”
