Annual Report of Sorainen Estonia: 2023 had economic challenges, but was strategically strong

Annual reports have been published on the Company Registration Portal of the Estonian e-business register.

The Sorainen office in Tallinn continues to be one of the biggest employers in the legal market in Estonia. The average number of employees in the firm has grown organically since its foundation in 1995, reaching 85 employees in 2023 (jumping up from 82 in 2022). The circle of owners also widened as Maria Pihlak, head of the firm’s International Arbitration sub-practice in Estonia, was promoted to partner. For several years, we have been among the legal sector’s biggest payers of state taxes. In 2023, the firm paid EUR 4,606,685 in social, income and value-added tax. The sales revenue grew by 3.4% compared to 2022, reaching EUR 15,063,617.

“Unfor­tunately, the Estonian economy continued to decline in 2023, and overall business activity remained lower than expected,” says Kaupo Lepasepp, country managing partner of Sorainen Estonia. “Faster growth in real estate law and dispute resolution fields somewhat offset the stagnation of the M&A and financial services market. Nevertheless, the growth was insufficient to compensate for the overall increase in labour costs, resulting in lower-than-planned revenue growth and prof­its.”

Lepasepp confirms that despite the economic challenges, we consider the year strategically successful: “Our strategy focuses on providing excellent client service, developing and empowering our team, and implementing new technologies to support our clients and team members. We made significant progress in these areas in 2023.”

Our achievements from the year 2023

• Sorainen ranks first in the “Best legal competence” category among top-tier Baltic law firms, according to the annual Baltic Kantar Prospera Tier 1 Law Firm Review. Sorainen placed first in 9 out of 14 legal competence categories to earn this ranking, including dispute resolution, govern­ment relations, real estate and energy servic­es, competition and EU law, employment, tax and corporate advisory law. Additionally, cli­ents highly valued our lawyers’ availability and excellent service, good personal contacts with the lawyers, and our culture of operating as a unified regional firm. The Sorainen brand also remains the most well-known among law firms in Estonia.
• The Estonian Ministry of Defence recog­nised our contribution to the security of our country. For the first time in 2023, 50 Es­tonian companies and organisations received this recognition. The purpose of the award is to highlight the employers that not only sup­port our national security by exempting reserve soldiers from their work duties but also con­sciously support them. We fully support our employees’ participation in national defence. We continue to pay their salaries and provide additional leave for the reservist training participants and for the members of the Defence League and the Women’s Voluntary Defence Organization during the training. National defence topics are closely related to our firm’s identity, both in internal and public communication, as well as in the activities of our management.
• Sorainen Estonia is among the most attractive employers in the legal sector. According to the survey conduct­ed by the Instar employer branding agency in 2023, law students chose Sorainen as the most attractive pri­vate-sector employer in the legal field.
• Our firm received nominations for The Financial Time Innovative Lawyers Awards Europe 2023, including the “Most Innovative Law Firm in Europe” and the “Innovative Lawyers in Technology” awards. Sorainen was the only law firm from the Baltic and Nordic regions ranked among 50 of the most innovative European law firms, placing 29th. We received the nomination for pioneering innovative legal solutions and applying innovation in developing and training our people and in social responsibility.
• Sorainen was named Baltic Law Firm of the Year at the Chambers Europe Awards 2023. The award recognises our law firm’s pre-eminence in key regional jurisdictions, outstanding work, impressive strategic growth, and excellence in client service.
• Certified IT security. Our IT security has been certified with the ISO/IEC 27001 stand­ard since 2021.
• Sorainen spin-off technology company. Crespect, our spin-off technology company developing comprehensive work management software for law firms, received innovative product development support and closed its first investment round.
• As part of the Shared Mission program, we provide EUR 100,000 worth of free legal assistance every year. In 2023, we selected 17 innovative and sustainable en­ergy projects, alongside our pro bono work focused on Ukraine, to receive free legal and tax advice from Sorainen through the Shared Mission program.
• The Legal 500 Global Green Guide, a prestigious legal publication, recognises our ESG achievements in all Baltic coun­tries. The recognition is awarded based on the firm’s efforts and legal work in the ESG field.
• As part of the ISO 14001 certification pro­cess, we developed an office-wide Envi­ronmental Management System guideline. The guideline includes the environmental as­pects and impacts of our activities, objectives, and indicators.
• Our Tallinn office’s commitment and efforts in environmental sustainability were recognised with the European Green Office certifica­tion.

Some notable transactions and cases Sorainen Estonia advised on in 2023

• We advised the Estonian Ministry of Climate on the possibility of introducing nuclear energy to Estonia.
• We advised Deutsche Bank on a EUR 600 million syndicated loan agreement with Eesti Energia, the largest energy company in Estonia.
• We successfully represented Saaremaa Laevakompanii, an Estonian-based shipping company, in a dispute over the recovery of a compromise agreement of over EUR 60 million.
• We advised AstraZeneca, a global research-based biopharmaceutical company, regarding its participation in a novel public-private partnership to improve the lung cancer patient pathway and implementation of the national cancer control plan.
• We advised Škoda on signing a cooperation agreement with Elron, a government-owned passenger train operator in Estonia, for the construction of 10 additional electric trains. As a result of the contract, Elron’s train fleet will increase by more than 40% by 2027.
• We successfully represented Lux Express and several other Estonian bus operators in their dispute with the Estonian state. The Estonian state is required to compensate bus operators for free rides.
• We advised Northern Horizon Capital, an independent real asset manager pursuing healthcare and other specialized real estate investment strategies in Northern Europe, on issuing EUR 42 million of Baltic Horizon Fund corporate bonds to refinance outstanding bonds.
• We advised Sunly, an independent power producer, on raising EUR 30 million from the European Bank for Reconstruction and Development (EBRD).
• We represented Elisa, Estonia’s leading telecommunications services provider, in a public procurement dispute with Estonian Railways regarding the terms of a public tender announced by the latter. The parties reached an agreement, essentially a compromise, a rare occurrence in public procurement.
• We advised Energiasalv, an energy storage solutions company, on acquiring EUR 11 million in additional financing for its EU Project of Common Interest (PCI project), the “Zero Terrain Paldiski” Pumped Hydro Energy Storage (PHS) plant in Estonia.
• We advised Nova Post, a Ukrainian company, on opening its Estonian branch and obtaining a postal license.
• We helped the Estonian art association Kanvas.ai, which offers technical solutions for artists, collectors, and galleries, open its Web3 platform Nft.kanvas.ai.

Read more about our activities and results from the Sorainen Estonia annual report!

Sworn auditor’s report