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”

Market report: Switzerland – Feeling lucky

Market report: Switzerland – Feeling lucky

2017 is shaping up to be another strong year for the leading Swiss firms, particularly on the back of a frothy M&A market

‘Compared to other European jurisdictions, Switzerland has been doing well,’ says Benjamin Borsodi, managing partner of Schellenberg Wittmer. ‘2016 was a very good year for many Swiss firms, especially the major ones. It was our best year ever and it looks positive for 2017 as well.’ His sentiment is echoed by Daniel Daeniker, managing partner of Homburger: ‘I was expecting the end of the M&A cycle: it’s simply not happened. Our first quarter numbers in 2017 are well above last year.’

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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”

Euro elite: focus Switzerland – Like clockwork

Euro elite: focus Switzerland – Like clockwork

All the cultural stereotypes are ingrained in Swiss law firms – well-organised, independent and highly-impressive.

Six Swiss firms make the Euro Elite – impressive for a country of just 8.4 million people. But then the Swiss have a longstanding reputation for being well organised, well educated and well resourced, while the economy – lightly regulated and low taxed – consistently ranks as the world’s most competitive, enjoying the highest per-capita income of any major country, except Norway.

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Compliance obligations: genetic resources

Compliance obligations: genetic resources

Homburger’s Andri Hess details the Nagoya Ordinance.

Switzerland is a member of the United Nations Convention on Biological Diversity (CBD) and signed the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization on 11 May 2011. The Nagoya Protocol pursues the implementation of the fair and equitable sharing of benefits arising from the utilisation of genetic resources, which is the third of the three core objectives of the CBD. On 1 February 2016, the main parts of the Swiss implementing ordinance (Nagoya Ordinance) entered into force.

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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.’

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Beneficial ownership in Swiss PE acquisitions

Beneficial ownership in Swiss PE acquisitions

Bär & Karrer’s Christoph Neeracher and Luca Jagmetti advise on the new rules.

As part of a new Swiss legislation aimed at preventing money laundering and tax evasion, any entity acquiring 25% or more of a non-listed Swiss company must inform the latter regarding the acquiring entity’s beneficial owner and update such information in case of changes.

In standard private equity structures, the administrative burden of the new legislation can be minimised by implementing a practicable solution compliant with the rules. As typically the general partner (GP) takes the relevant decisions regarding the fund and its portfolio companies, the individuals controlling the GP (respectively controlling the ultimate shareholder of the GP) should be disclosed as beneficial owners. If such individuals cannot be determined, the top executive officer (chair or chief executive) of the GP, or respectively of its ultimate shareholder, may be disclosed.

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The new Swiss perspective on international arbitration

The new Swiss perspective on international arbitration

Gentium Law’s Matthew Parish discusses a quiet revolution.

Switzerland is distinctive as a centre of international arbitration. It packs a punch well above its size. Although statistics about arbitration are by their nature confidential, anecdotal evidence indicates the diminutive country of a mere 7.5 million people is host to several hundreds of arbitrations per year. This is a remarkable figure.

The London Court of International Arbitration has perhaps only 150 cases per annum, while the International Chamber of Commerce hosts roughly double that number. In petite Geneva – a mere 185,000 people – arbitration lawyers may be the largest group of legal specialists in the city. Continue reading “The new Swiss perspective on international arbitration”

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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