At a time when Bulgaria has fallen into disgrace with the European Union following the severe criticism by the European Commission (EC) in its latest report on the country's progress in the fight against organised crime and corruption, gaps in Bulgarian legislation are about to take more victims.

The fight that 11 Bulgarian law firms initiated earlier this year at the Commission for Protection of Competition (CPC) against eight of the biggest foreign law companies operating in Bulgaria, accusing them of violations of Bulgaria's Attorneys Act and unethical behaviour, is to come to an end soon. The competition watchdog is expected to issue its decision in the days to come, following a July 22 hearing of the case.

The main accusations are focused on the fact that the defendant foreign law firms are registered and operate in the country as commercial enterprises, while according to the Attorneys Act they need to be registered explicitly as law firms. Furthermore, to comply with the law, the names of the law firms can be composed only of the names of the partners registered in one of Bulgaria's bar associations. This is something the foreign lawyers in the country are fiercely opposing, as to them being able to operate under the name that they are internationally recognised is vital for the success of their business.

In June, the foreign law firms came out with a statement slamming the move by their Bulgarian counterparts as an attempt "to restrict competition and the fundamental right of establishment under the EU Treaty". They threatened that unless the accusations of Bulgarian law firms were rejected, they could well take the case to the EC, making reference to Directive 98/5/EC, "which allows a foreign lawyer to practice in the member states under the name of his office or national law firm name".

"This is an anti-competitive move by a number of Bulgarian law firms who fear competition. This is nothing else but an attempt to drive foreign firms out of the country," Peter Valert, managing partner of DLA Piper Weiss-Tessbach in Sofia, said.

Gentscho Pavlov, partner at CMS Reich-Rohrwig Hainz Sofia, said: "What these firms are trying to do is essentially restraint of trade and a return to the sort of old-fashioned protectionism, which has no place in a modern Europe."

From the Bulgarian angle, however, things look quite different. Yavor Kambourov, managing partner at Kambourov & Partners, told The Sofia Echo that he expected CPC to respect the complaint filed by himself and his colleagues and rule in their favour, explaining that if this did not happen, they would appeal against the ruling. "Other companies such as PricewaterhouseCoopers and Ernst & Young registered their law firms in Bulgaria, it is a shame that these big law companies do not do the same," he said. "It is more convenient to me and my colleagues as well, to work through commercial enterprises, but we are observing the law. If we go to Vienna and register a commercial enterprise to provide attorney services, we will be arrested instead of going to any competition protection commission."

The foreign lawyers also expressed their hope that the CPC would rule in their favour, though they said they were prepared for a negative decision as well. "We're hoping for the best, but we're also ready for the worst. If the decision is not in our favour, we will appeal against it in the Supreme Administrative Court, there are also a number of other options," Valert told The Sofia Echo. "We don't say it's wrong, but certain parts of Bulgarian law need to be made better. Bulgaria is an EU country as far as I know. We don't feel we've done anything wrong."

Vladimir Kinkin, partner at Dobrev, Kinkin & Lyutskanov, shared Kambourov's view that the laws have to be observed. "We don't deny Bulgarian legislation needs some changes, but after all, the laws are made to be kept," he told The Sofia Echo. Kinkin described the claim by the foreign law firms that their Bulgarian colleagues only wanted to chase them out of the country and limit competition as a "populist". Asked to comment on their opponents' statement that they could take the case to Brussels, he said: "I don't see why they should be more of European citizens than we are. Brussels is supposed to protect the interests of all European citizens." While the Bulgarian firms understood that the foreign companies suffered from the situation as well, what they could do is initiate the process of finding a legal solution to the case, he said.