Switzerland – Between a rock and a hard place

Switzerland – Between a rock and a hard place

As the eurozone economy slows down after six years of uninterrupted growth, Switzerland is an anxious spectator. Amid increased concerns among the EU27 over the potential impact of a disorderly Brexit and the halt to quantitative easing from the European Central Bank’s asset-purchasing programme, Europe’s big three are bracing themselves while Switzerland sits in the middle, watching intently.

To the west, France endures its gilets jaunes; to the south, Italy faces a looming debt crisis with its banks. In the north, Germany has just avoided a technical recession and, like many of the other 18 eurozone countries, forecasters suggest that it will be fortunate to see 1% GDP growth this year. ‘What I see in Italy and France is scary, in particular the rise of populism,’ says Manuel Bianchi della Porta, managing partner of BianchiSchwald in Geneva. ‘A lot is going on in the eurozone: most Swiss trade depends upon Germany, France and Italy. But it seems that we are living on a small island unaffected by all the turmoil that is happening around us. It is like the political stability of our country is protecting us and the business community we are serving.’ Continue reading “Switzerland – Between a rock and a hard place”

Sponsored briefing: The end of Libor in Switzerland

Sponsored briefing: The end of Libor in Switzerland

The UK Financial Conduct Authority (FCA) announced on 27 July 2017 it would no longer require that banks that are members of the Libor panel be obliged to communicate a daily rate after 2021.

2021 is perhaps not tomorrow, but it is definitely very soon after tomorrow. Financial institutions should now review their Libor-based contracts and products to quantify their exposure to the discontinuation of such a rate. While the effort is obviously larger for financial institutions, other enterprises, and even retail investors and borrowers, should assess their risk and determine what measures to take. We provide below an overview of the contracts that may be affected and possible remedies. Continue reading “Sponsored briefing: The end of Libor in Switzerland”

Practice Area Spotlight: Dispute resolution – Strategic case management with legal acumen

Practice Area Spotlight: Dispute resolution – Strategic case management with legal acumen

State court litigation and private arbitration proceedings require practitioners to combine legal thoroughness and the management of evidence with strategic ingenuity. Understanding court processes, legal practice and tactical procedural advantages all add up to sound advice in contentious legal matters.

Dispute resolution in all its appearances enjoys a longstanding tradition at Prager Dreifuss. Our attorneys represent parties before local state courts as well as administrative authorities. Debt collection and bankruptcy matters are strong areas of our practice, in particular in disputes involving foreign parties. International arbitration has attained special significance in our firm, and a number of our attorneys are regularly appointed as arbitrators in institutional and ad hoc arbitration tribunals. Continue reading “Practice Area Spotlight: Dispute resolution – Strategic case management with legal acumen”

Switzerland – The rough and the smooth

Switzerland – The rough and the smooth

Switzerland has not been in a foreign conflict since 1815 when its neutrality was first established by the Treaty of Paris. But, two centuries on, the peace-loving nation could be set to experience a discreet civil war – this time between its law firms.

Despite a cluster of top domestic players vying for the best work, Swiss lawyers have never experienced the level of international competition felt by France and Germany. The market has perhaps been too cosy, the work too plentiful and the outlook too certain. Yet there is something in the Alpine air that suggests this might change – and when it does, the battle for business will intensify. To be fought entirely by stealth rather than with steel, it may nevertheless reshape the domestic legal landscape. Continue reading “Switzerland – The rough and the smooth”

Making ripples – Turbulent times ahead for the Swiss legal market

Making ripples – Turbulent times ahead for the Swiss legal market

Switzerland is changing. Among the country’s traditionally-minded law firms, conservatism is in decline, fuelled by a greater appetite for domestic mergers, increased lawyer mobility between firms and a belated focus on alternative legal service provision. Accordingly, Swiss lawyers are much like the swans on Lake Geneva: smooth and serene on the surface, all the while paddling furiously underneath. An energetic response to the fresh demands of an evolving legal services landscape is paying dividends for some.

The wider economy presents a mixed picture, as Urs Klöti, managing partner of Pestalozzi, outlines: ‘Challenging times remain. The Swiss franc is still very strong, which means that export services are extremely expensive compared with previously. That’s an issue for bigger law firms, because many of our invoice payers are non-Swiss counterparts: in relative terms, we’re certainly more expensive than two or three years ago. We often hear it when we talk about fees.’ Continue reading “Making ripples – Turbulent times ahead for the Swiss legal market”

Red dragon, white cross – Can Chinese money kickstart Swiss markets

Red dragon, white cross – Can Chinese money kickstart Swiss markets

‘In our worldwide business, the volume of mergers is at a record high. However, in Switzerland we can talk about a stagnation of deals,’ says Guy Vermeil, managing partner of Lenz & Staehelin. His downbeat assessment of the domestic M&A market is supported by last year’s numbers. As the broader Swiss economy stalled with GDP growth of only 0.8%, KPMG’s annual transactional review labelled 2015 as ‘troubled for the M&A market in Switzerland’. Transaction volume declined 17% compared to 2014, from 420 to 350 deals, while the aggregate value of completed M&A with a Swiss component fell 55% to $84.9bn.

Benedict Christ, co-head of M&A at Vischer, identifies removal of the currency peg as a particular problem: ‘There was certainly no growth in M&A, that’s probably mostly due to the appreciation of the Swiss franc in early January [2015], which made it considerably more expensive for foreign investors. The hit we took from the appreciation was probably not as bad as it could have been, but this will certainly continue to have an effect on the markets.’

Continue reading “Red dragon, white cross – Can Chinese money kickstart Swiss markets”

Aftershocks – hard decisions for Swiss lawyers amid a turbulent market

Aftershocks – hard decisions for Swiss lawyers amid a turbulent market

When even that most venerable of Swiss industries, watch-making, comes under threat, you know the country has a problem. But this proved to be the case in the early weeks of 2015: global brand Swatch saw its share price slump 15% after the Swiss National Bank (SNB) announced on 15 January that it would abandon the cap on the Swiss franc against the euro that it first introduced in September 2011. Keeping the franc at CHF1.20 to the euro had became increasingly expensive for the SNB, as it sold its own currency and bought up euros, sterling, US and Canadian dollars and yen, usually in the form of government bonds.

Many were shocked by the move, which has left investors worrying that with the CHF now floating against the euro, Swiss companies will struggle to maintain export levels. Swatch chief executive Nick Hayek called the decision ‘a tsunami’ for Switzerland’s economy. Mark Haefele, chief investment officer of UBS, has estimated that the policy will cost Swiss exporters close to CHF5bn (£3.3bn), equivalent to 0.7% of Swiss economic output.

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A wider horizon – Switzerland edges into the global economy

A wider horizon – Switzerland edges into the global economy

While historically relatively untouched by the globalisation of legal services, international firms have continued their recent surge into Switzerland, with Geneva – home to a third of the world’s private wealth – emerging as the most popular hotspot. As recently as January, CMS von Erlach Henrici – the local Swiss member of the global CMS network – merged with Geneva practice ZPG Avocats, adding six partners, including former ZPG managing partner Charles Poncet to the firm, now known as CMS von Erlach Poncet.

In September last year, Speechly Bircham also opened in Geneva – an office led by Michael Wells-Greco and of counsel Francis Rojas, who joined from the Luxembourg-based Maitland. This was the LB100 firm’s second office launch in the country in recent years, having first launched in Zürich in 2011. Continue reading “A wider horizon – Switzerland edges into the global economy”

Switzerland – Being Prepared

Switzerland – Being Prepared

In most markets, it wouldn’t qualify as news but in the conservative Swiss legal community, the creation last April of Meyerlustenberger Lachenal via a merger between Zürich’s meyerlustenberger and Geneva’s Lachenal & Le Fort is still making waves. Currently listed as one of the largest law firms in Switzerland, it is present in Zug, Lausanne and Brussels, in addition to Zürich and Geneva.

The roots of Lachenal & Le Fort date back to 1882, while meyerlustenberger was established in 1975. According to Christophe Rapin – a Lausanne-based partner at the combined firm – an important driver behind the merger, which created a 30-partner practice, was to ensure national coverage of the Swiss market, particularly for the firm’s international clientele.

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Switzerland – Climb every mountain

Switzerland – Climb every mountain

UK law firm Speechly Bircham opened a Zürich office in June 2011, marking the firm’s first venture overseas. Private client partner Mark Summers was relocated to Switzerland to head the new operation alongside two associates, with fellow partner William Hancock joining him at the start of 2012.

Speechly’s Zürich offering is further bolstered by international private client head Charles Gothard, who spends one week each month in the city, and financial services partners Jonathan Bayliss and Kate Troup, who are both in Zürich for two or three days each month. Continue reading “Switzerland – Climb every mountain”