Euro elite: focus Nordics – Power, soft and hard

The Euro Elite is dominated by independents from the Nordics – large, high-quality and able to resist the advance of international firms.

The Nordic countries – Sweden, Denmark, Norway, Finland and Iceland – are diverse legal markets that are home to a strong array of independent domestic firms, including Mannheimer Swartling and Vinge in Sweden, and Denmark’s ‘big four’: Kromann Reumert, Plesner, Gorrissen Federspiel and Bech-Bruun.

Sweden, the largest economy and legal market in the Nordic countries, saw a period of high-end transactions on the Nasdaq Stockholm exchange throughout 2015, which has provided a bounty of work for lawyers, although the private M&A market has been slower. Says Fredrik Rydin, managing partner-elect of Roschier: ‘The Nasdaq Stockholm exchange has been very popular to list new companies in the Nordic region. We have seen companies from Denmark and Finland choosing to list on the Stockholm exchange because the market is bigger. There has been a huge inflow of new companies on the Stockholm exchange over the past year.’

‘If you had asked me two years ago, I would have said I wanted our market to be like Norway, but they are really suffering right now in Oslo.’
Fredrik Rydin, Roschier

One of the standout mandates in 2015 was on the public M&A side, with the €6.6bn acquisition of Fortum Distribution, the owner of Fortum’s electricity distribution business in Sweden, by Borealis Infrastructure Management. The two largest domestic firms played key roles, with Mannheimer Swartling acting as lead counsel to the purchaser with a team including M&A partner Adam Green, while Vinge also advised on the deal with a team led by Johan Göthberg. Linklaters, led by finance partner Ian Andrews, advised the Swedish-Canadian consortium on UK law aspects of the purchase.

Sweden’s reliance on technology and industry, like its neighbour Finland, has left the country mostly unaffected by the fall in oil prices, which is currently being felt among Norwegian businesses and the legal community, relying on the industries of oil and gas, maritime transportation and fisheries.

The Euro Elite: Nordics	Country	Total lawyers	Total partners	No. of offices
Mannheimer Swartling	Sweden	400	92	11
Roschier	Finland	210	39	3
Glimstedt	Sweden	180	75	17
Hannes Snellman	Finland	176	45	4
Wikborg Rein	Norway	212	64	3
Thommessen	Norway	165	50	3
BA-HR DA	Norway	146	36	1
Wiersholm	Norway	155	46	1
Vinge	Sweden	280	72	5
Castrén & Snellman	Finland	142	29	3
Kromann Reumert	Denmark	250	64	3
Schjødt	Norway	150	47	4
Plesner	Denmark	190	42	1
Gorrissen Federspiel	Denmark	225	46	2
Bech-Bruun	Denmark	260	78	3
Borenius	Finland	117	25	4
Lindahl	Sweden	240	86	6
Haavind	Norway	105	38	1
Selmer	Norway	110	40	2
Magnusson	Sweden	200	47	15
LETT Law Firm	Denmark	154	56	2
Bruun & Hjejle	Denmark	105	27	1
Krogerus	Finland	105	27	1
Arntzen de Besche	Norway	140	51	3

Adds Rydin: ‘If you had asked me two years ago, I would have said I wanted our market to be like Norway, but now I don’t, with an oil price that is plunging to around $40 per barrel. North Sea oil is profitable when you are at the levels of between $60 and $70 per barrel. They are really suffering right now in Oslo.’

However, according to Gisele Marchand, chief executive of Norwegian practice Haavind, although the economic situation in the country is depressed, those law firms with a more diverse business model will be better protected. This is despite her firm seeing revenues fall 7% to €34.2m in 2015.

‘For us it is important to be in different businesses,’ she says. ‘For example, we’re very involved in transactions that may be affected by these kinds of situations, but we are also heavily involved with dispute resolution and different branches of the Norwegian economy. We feel that we’re quite well dispersed to meet the challenges.’

Although the Norwegian legal market has been affected by the fall in oil prices, local full-service law firms in the country are seeing an upside in other practice areas, particularly restructuring and insolvency matters, despite a fall in transactional activity. Simon Evers Kalsmose-Hjelmborg, managing partner at Danish leader Bech-Bruun, strikes a more positive note: ‘Being a lawyer, regardless of whether an industry is going up or down, you have work to do and there might well be lots of work in the bankruptcy area in Norway over the next few years. Things might not hit the legal industry that hard.’

Denmark, on the other hand, has seen its economy grow and law firms report dispute resolution practices performing well in particular, in addition to real estate and construction, intellectual property and M&A. However, although the larger firms have seen an increase in turnover – Bech-Bruun for example enjoyed a revenue increase of 6% last year – according to Evers Kalsmose-Hjelmborg, the legal market declined by 1.5% in turnover overall.

‘If I could guess where this drop came from, I would say it is the smaller and mid-sized law firms that are struggling,’ says Evers Kalsmose-Hjelmborg. ‘We don’t publish financials, but my guess would be that the big four [Danish law firms] all saw progress in 2015.’

Denmark, like Sweden and Norway, is one in which international firms have traditionally struggled to gain a foothold. Despite a brief dalliance for Linklaters with Swedish firm Lagerlöf & Leman in the late 1990s, before the UK-based global firm established its own presence in Stockholm, the major international firms have left Scandinavia relatively untouched.

This is most obvious in Iceland, which has no international firms and where local firms instead face competition from the legal arms of the Big Four accountancy firms.

‘It has to do with market size,’ says Örn Gunnarsson, managing director of legal affairs at Icelandic firm Lex Law Offices. ‘If you look at Denmark, there are almost no foreign firms there either. There are two large Icelandic law firms – ourselves and LOGOS.’

According to Gunnarsson, the legal market in Iceland has doubled since 2008, with banking, insolvency, bankruptcy and finance restructuring all remaining key areas of activity for Icelandic firms.

Similarly, the Finnish market is largely dominated by independent local law firms.

‘Last year we had a lot of initial public offerings (IPOs) on the Finnish market,’ says Borenius managing partner Casper Herler, who saw his firm’s revenues stay largely flat in 2015 at €37.4m (-1%). ‘Real estate has come back. There has been a lot of activity on the real estate side because of the interest rates on real estate investments. Capital markets is also definitely something that has been very active during the last year.’

No doubt the highlight deal of the year in the Finnish legal market was Nokia’s €15.6bn takeover of its French rival Alcatel-Lucent. Roschier represented Nokia in the combination, alongside Skadden, Arps, Slate, Meagher & Flom, which underlined a healthy appetite for mega-deals within the market. Borenius, meanwhile, lays claim to a record-breaking 50% market share of the Finnish IPOs completed in 2015, having acted as the issuer’s counsel in six of the 12 IPOs completed last year. LB

kathryn.mccann@legalease.co.uk