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

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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

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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

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‘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

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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

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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

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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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Like clockwork

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 MARKET VIEW – ARBITRATION 

Why are so few awards rendered by the Swiss Chambers’ Arbitration Institution subject to challenge proceedings in the country’s courts? Rainer Füeg, the institution’s Executive Director, speaks to Lenz & Staehelin partner Martin Burkhardt

Martin Burkhardt, Lenz & Staehelin: With a growing number of arbitral institutions, why should a party use your institution?

Rainer Füeg, Swiss Chambers’ Arbitration Institution: Arbitration proceedings under the Swiss rules of international arbitration are efficient, reliable and cost-effective. They are administered in four languages: English, German, French and Italian. In arbitration proceedings where the amount in dispute does not exceed CHF1m, expedited procedures will apply; in such cases, the award shall be made within six months from the date on which the secretariat of the Institution submitted the file to the arbitral tribunal. More generally, the members of the institution and its arbitral tribunal are experienced international arbitration practitioners.

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Neutral territory

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 MARKET VIEW – LITIGATION 

Lalive’s Marc Henzelin and Sandrine Giroud examine the key facts on the enforcement of foreign judgments in Switzerland

Ranked among the top five financial centres in the world and top of the Global Innovation Index 2014, with postcard landscapes and a tradition of discretion and stability, Switzerland remains a top destination for companies and wealthy individuals alike to bring their business and wealth. It is therefore unsurprising that enforcement of foreign judgments against assets held in Switzerland is an issue that comes up regularly in the day-to-day practice of international litigators.

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