In a space of only 41,285 km², Switzerland has two major language areas and 26 cantons, giving it a fairly unique set-up. Known to be one of the richest countries in the world, it had little problem absorbing the impacts of the Covid-19 pandemic thanks to its stable economy. However, ‘the government hasn’t been very successful at combating the virus’, says Daniel Hochstrasser, senior partner and chair of Bär & Karrer, referring to the country’s at times high numbers of cases and deaths. ‘But that has not changed much in the overall assessment of Switzerland on a global scale.’
With high activity in the industrial, manufacturing and financial services sectors, Bär & Karrer can look back on a successful 2020 overall. ‘The effects were less pronounced than we anticipated when we drew up contingency plans in March,’ says Hochstrasser. ‘In the end, we fortunately didn’t have to take any of those measures’. A highlight for the firm was advising Libra Association on its bid to build a global payment system based on the Libra blockchain; a matter that combined expertise from its banking and finance, fintech and tax departments.
The recovery of the Swiss economy in the second half of 2020 was strong, particularly compared to its European neighbours. By September, Swiss GDP was only 2% below pre-crisis levels. This strong bounceback was also witnessed by Caroline Clemetson, partner and member of Schellenberg Wittmer’s management committee. ‘Except for a couple of M&A transactions that fell through, 2020 was a fantastic year,’ she says. She adds that having foresight and being proactive definitely paid off. ‘Thanks to our office in Singapore, we saw the lockdown coming and we shifted everyone to remote-working right away. Therefore, we got business done without any interruptions.’
For Schellenberg Wittmer, recent work includes advising the Russian Anti-Doping Agency in an international arbitration and assisting Swiss private investors in the acquisition of European home furnishings retailer Conforama. ‘As a lawyer, you should always ask yourself what a client wants,’ adds Clemetson. ‘In these times of uncertainty, more than ever, they look for a trusted adviser and an efficient person they can have direct contact with.’
‘Thanks to our office in Singapore, we saw the lockdown coming and we shifted everyone to remote-working right away. Therefore, we got business done without any interruptions.’ Caroline Clemetson, Schellenberg Wittmer
A few weeks into 2021 and ‘the economy remains remarkably resilient’, says René Bösch, a partner in the banking and finance and capital markets teams of Homburger. ‘I’m happy with the support SMEs received throughout the crisis, and I’m confident the other driving forces behind the Swiss economy will also survive.’ Switzerland introduced two types of loans under its Covid-19 loan programme, ‘Covid-lite’ loans with a principal amount of up to CHF500,000 (€462,000) and ‘Covid-plus’ loans with a principal amount of up to CHF20m (€18.5m). The government initially set its bridge loan programme to be at CHF20bn but later increased it to CHF40bn.
The general expectation is that a lot of strategic buyers will be looking for opportunities now. ‘As a lawyer, you’re definitely in the right place at the moment,’ says Bösch. Homburger also didn’t register a decrease in business because, besides assisting its usual client base, it was also instructed in matters originating from the pandemic. The capital markets team had a particularly strong year in debt transactions, and a group at the firm advised FIFA on the set-up of the FIFA Covid-19 Relief Plan.
According to Bösch, flexibility and innovation are crucial at this time. ‘Our firmwide initiative Homburger Exponential, which aims to redesign workflows and automate processes, is setting us on the right path for future challenges.’
Switzerland’s legal market is clearly dominated by independent full-service law firms. Beyond the aforementioned, established players also include Lenz & Staehelin, Walder Wyss, Niederer Kraft Frey, Vischer, Pestalozzi and Kellerhals Carrard who share the majority of national instructions and inbound business. This is something that is most likely not going to change in the future, according to all three interviewees, for various reasons.
‘The market leaders have nothing to gain to tie themselves to an exclusive network,’ says Hochstrasser. ‘International law firms looking into Switzerland struggle in particular hiring national talent,’ finds Clemetson; and Bösch adds: ‘It is a quite saturated market already, and Swiss law firms know how to take care of Swiss law.’ LB