Market trends

Across Europe, legal markets are navigating lower transaction volumes but higher‑value, more complex deals, driven by geopolitical uncertainty and shifting interest rates.

At the same time, disputes and regulatory enforcement are expanding rapidly, fuelled by new European Union directives, active competition and tax authorities, and rising environmental, social and governance (ESG) and climate‑related claims. Finally, energy transition pressures, data‑centre development and accelerating artificial intelligence (AI) adoption are reshaping legal demand across multiple practices, driving demand for strategic legal advice in these areas.

“Over the next 12 months, key external factors likely to impact our need for legal advice include continued geopolitical and economic uncertainty, evolving regulatory requirements, particularly around ESG and data/privacy, and a potential uptick in distressed opportunities or restructuring scenarios. These dynamics may drive increased demand for cross-border M&A, regulatory and litigation support.”

Co-founder of a European private equity investment firm

Foreign direct investment rising across key sectors

Europe continues to attract strong foreign direct investment (FDI) across key sectors, such as technology, renewable energy and services. Italy and Spain stand out as major FDI destinations. Italy benefits from political stability, a favourable tax regime and a credit rating upgrade. Spain’s high-growth economy, renewable capacity and emerging data-centre sector draw sustained inbound capital. Meanwhile, jurisdictions across the Central and Eastern Europe (CEE) region see growing FDI tied to manufacturing, in addition to technology and energy.

Litigation and regulatory enforcement rising

Litigation and regulatory enforcement are rising sharply across Europe, driven by expanding class‑action regimes, more assertive enforcement authorities and a growing volume of ESG‑, employment‑ and consumer‑related disputes. Italy and the Netherlands are emerging as major contentious hubs. Italy is seeing increases in climate, product liability and trade‑secrets claims. In the Netherlands’ the Wet Afwikkeling Massaschade in Collectieve Actie framework (WAMCA) fuels large cross‑border consumer, healthcare and GDPR actions alongside increasingly aggressive tax and competition authorities. Across the Nordics, Iberia and CEE, disputes are also increasing, especially in energy, construction, post‑M&A and regulatory compliance.

“Economic pressure and interest rate fluctuations continue to reshape deal dynamics and financing conditions. They require more strategic legal input, especially in M&A and restructuring scenarios. Increasing regulatory complexity, particularly in foreign direct investment and competition law, is raising the need for early-stage legal guidance in cross-border transactions.”

Head of Business Development, Real estate developer, Nordics

Spain

Spain is one of Europe’s strongest performers, with a high‑growth economy, a surge in residential real‑estate demand and continued strength in tourism, making it an attractive country for foreign capital. Despite slightly lower M&A volumes, transaction values rose nearly 20%, driven by large strategic deals in technology, tourism and energy. Spain’s booming data‑centre market and its deep pipeline of renewable energy projects align with Europe‑wide investor priorities around digital infrastructure and the energy transition, attracting significant inbound investment from US, UK and EU funds. As in many other European jurisdictions, increasing regulatory complexity and sector‑specific scrutiny are reshaping legal demand, with Spanish law firms seeing strong growth in regulatory advisory, ESG, public law, litigation and project finance mandates.

Italy

Italy saw lower overall deal momentum early in 2025 due to geopolitical uncertainty, but this was offset by strong private credit activity, SME‑focused M&A and increasing inbound capital. The country’s disputes landscape is also intensifying, with rising class actions, climate and product liability litigation, and a strengthened role in European patent disputes through the Unified Patent Court (UPC), reflecting the continent‑wide surge in contentious regulatory and ESG‑related matters. Italy’s growing emphasis on ESG compliance, fintech regulation and AI adoption aligns with broader European priorities, illustrating how digital transformation, sustainability reporting obligations and evolving regulatory frameworks are transforming legal requirements across the European market.

Netherlands

The Netherlands is navigating a period of caution and transition, with political change, US tariff exposure and regulatory uncertainty contributing to a muted deal market across M&A, initial public offerings (IPOs) and real estate. On the contentious side, the Netherlands continues to strengthen its role as a leading European litigation hub, with the WAMCA regime enabling major consumer, healthcare and GDPR mass actions and increasingly assertive tax and competition authorities. The market’s focus on AI adoption, workforce restructuring and compliance with new EU employment directives also aligns with broader European trends, underscoring how digital transformation and
regulatory complexity are reshaping legal demand across the region.

The Nordics

Across the Nordics, legal work is becoming increasingly complex and international, with larger cross‑border mandates and a notable rise in disputes, particularly in renewable energy, construction, sanctions and post‑M&A matters. FDI activity is rising in the region, driven by security concerns, defence-sector investment and significant energy‑transition initiatives. As in other European jurisdictions, AI is becoming a central focus, prompting both opportunities for efficiency and concerns about accuracy, confidentiality and regulatory exposure, while sparking increased client demand for advice on the AI Act, Data Act, DORA
and NIS2.

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Maria Rocha Barros, SVP and Chief Legal & Public Affairs Officer, Booking.com