Northern exposure

In October 2008, as the credit crunch descended into outright global financial crisis, the Finnish Prime Minister, Matti Vanhanen, confidently declared that: ‘Finland is far from the eye of the storm.’ How far exactly was never fully determined, but experienced Nordic lawyers, be they from Finland, Norway, Denmark or Sweden, would all have predicted about six months. In other words, not far enough. It is the same rule of thumb that dictates that the British economy is roughly half a year behind the US. As such, most Nordic lawyers are now starting to get their first taste of financial turmoil, but at least most of them saw it coming, unlike Vanhanen.

It is too early to say what the medium- to long-term effect will be. The majority feel that they will avoid the pitfalls of their American and British counterparts. That means no downsizing and no layoffs, at least for now.

‘One must realise that there is a difference in the business model if you compare a tier-one Nordic firm with a City firm,’ says Mats Anderson, a former Linklaters partner in Sweden who now runs clear blue water, a strategic consultancy for professional services firms. ‘They are perhaps not as vulnerable to a drop in turnover as many UK firms because they have a healthy profit margin, from 45% to 55%, which is in line with or better than where most of the Magic Circle firms are. They have a much lower gearing than the UK firms and are not as specialised. They are not as vulnerable if they take a hit on the turnover. Having said that, M&A is going down very dramatically.’

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