Our annual Euro Elite survey finds the 100 leading firms across more than 40 jurisdictions still in a strong position, despite a potentially bleak outlook for 2023.
According to the European Central Bank, economic growth slowed considerably in the third quarter of 2022, as strong effects from the post-pandemic reopening and easing supply chain disruptions were tempered by lower consumer confidence and high inflation. This high inflation, uncertainty and weak consumer and business confidence is predicted to slow economic growth from 3.4% in 2022 to 0.5% in 2023. But, as energy markets rebalance, supply bottlenecks resolve and foreign demand strengthens, growth is expected to recover to 1.9% in 2024 and 1.8% in 2025.
It really has been feast or famine in some respects. Speaking to Legal Business last summer Mike Rimon, corporate and securities partner at Meitar Law Offices in Israel, said: ‘Trying to analyse retroactively the last 12 months is probably the most challenging assignment. Those 12 months consist of the second half of 2021 and the first half of 2022. The contradiction is as big and significant and meaningful as it can be.’
But despite a drop in deals across Europe compared to the banner year that 2021 turned out to be, Euro Elite firms continue to share a common strength – dominance of their home markets (and not just in corporate), meaning the vast majority occupy the top tiers of The Legal 500 EMEA across the full spectrum of practice areas, from M&A to commercial litigation. Regardless of which jurisdiction you choose, there is a proliferation of Euro Elite firms at the highest level. Aside from European markets where there is little to no presence from larger multinational firms, such as Southern Europe, independents still dominate their markets.
‘Retention is our biggest challenge. There is definitely a Covid-generation lawyer, working deal after deal, after deal.’
Stephen Keogh, William Fry
In many cases, the leading firms in key jurisdictions come in threes. Italy has Chiomenti, Gianni & Origoni and BonelliErede; the Netherlands has De Brauw Blackstone Westbroek, NautaDutilh and Stibbe; while Spain has Cuatrecasas, Garrigues and Uría Menéndez. In Germany, Hengeler Mueller, Gleiss Lutz and Noerr are equal or superior to international players like Freshfields Bruckhaus Deringer in many respects.
In 2023, the independent, high-functioning law firm is still alive and well. In Ireland, A&L Goodbody, Arthur Cox, Mason Hayes & Curran, Matheson, McCann FitzGerald and William Fry monopolise the high-end deals and disputes market, with little to no competition from international players. In Switzerland, the picture is much the same with Bär & Karrer, Homburger, Lenz & Staehelin and Niederer Kraft Frey the dominant corporate and M&A firms.
Flying high
The strength of the average Euro Elite firm can be seen by the growth in numbers. The average number of lawyers is up to 273 from 260, while the size of partnership has grown to 66 partners, five more than last year.
Evidence of firms moving in the right direction can be seen by those investing in their partnership growth, either through internal promotions or lateral hires.
But while the average number of partner hires by Euro Elite firms is unchanged from two per firm, average partnership promotions have swelled from three to five across the board, showing that thriving firms must invest in their lawyers as part of the much-touted tussle for talent. As Van Doorne managing partner Sjoerd Kamerbeek notes of the Netherlands market: ‘If you look at the larger firms, they are relatively old in terms of their partner practices and over the last few years more junior partners are being appointed.’
‘The calendar year 2021 for most German firms, might go down as the strongest in history.’
Michael Arnold and Alexander Schwarz, Gleiss Lutz
And, speaking to Legal Business towards the end of last year, William Fry’s head of corporate in Dublin, Stephen Keogh, said: ‘Retention is our biggest challenge. There is definitely a Covid-generation lawyer, working deal after deal, after deal. After 12 months one of our lawyers said he wanted to leave as it was far too relentless. We told him to take a long break but not to walk away. He came back. That has been the effect of being so busy – no work/life balance.’
This was echoed by Geoff Moore, managing partner of rival firm, Arthur Cox: ‘I would say hiring senior lawyers is a challenge for everyone, but we are able to offer a really attractive proposition to new hires, including a hybrid working policy which has an emphasis on trust and flexibility. Our overall purpose is to offer the best law firm experience, both for our people and our clients and this has resonated well with our staff and new recruits.’
Our individual market reports, written by a team of researchers from The Legal 500 EMEA with direct access to the key firms in each region, finds senior figures at the firms full of confidence. Says Gleiss Lutz co-managing partners Michael Arnold and Alexander Schwarz: ‘It is our sense that the last financial year has once again been a strong year for most law firms, even if the highs of the year immediately preceding the last, for example, the calendar year 2021 for most German firms, might go down as the strongest in history.’
The numbers posted by some Euro Elite firms largely back this optimism up. Of the 36 firms that have made public their turnover for the most recent financial year (see ‘Euro Elite by revenue’, below) – in some cases this would be calendar year 2021 – average revenue is €122.9m. With 16 firms experiencing double-digit revenue growth, the performance overall is stronger than last year, where 11 of 30 reporting firms saw double-digit revenue increases.
The standout performer is Spanish firm Pérez-Llorca, which saw turnover jump 33% to €91m (although this figure is for the 2021 calendar year). The firm has seen a strong movement up the ranks to challenge the three historical powerhouses in the Spanish market, winning work such as advising CVC over its 20% stake in Naturgy and the €5bn partial takeover bid for this company by Australian fund IFM. The firm continues to provide legal advice to one of the largest truck manufacturing groups belonging to the Volkswagen Group on all the proceedings initiated by truck purchasers claiming damages allegedly arising from anti-competitive practice.
‘The biggest question marks relate to how solid the market remains for growth companies and related investments and transactions.’
Mikko Manner, Roschier
And when it comes to growth strategies, Pérez-Llorca has set a standard for Spanish firms looking to expand in Asia after announcing it will become the first to have a presence in Singapore, with a new office set to open in the city state this year.
Meanwhile, three firms from the Nordic region all saw more than 20% revenue increases in their most recently published results: Castrén & Snellman (27%) and Borenius (21%) from Finland; and Denmark’s Plesner (22%). In an interesting take on just how law firms can seemingly do well amid financial stress, Castrén & Snellman has been busy in the past year co-ordinating strategic level legal advisory services to several Finnish and international companies in the divestments of their businesses in Russia, such as KONE Corporation, Fazer, Valio, Huhtamäki, Atria, Boreo and SOK.
The secret to the firm’s success, according to its Euro Elite entry? ‘We base our business on an exceptionally wide Tier 1 full-service offering and a sustainable working culture which we have been building up over the years. In the coming years our plan is to strengthen our position as the market leader in Finland.’
Just two firms saw reverses in turnover: Dutch market leader De Brauw Blackstone Westbroek suffered a 13% drop in income to €174m, while Swedish powerhouse Vinge saw revenues drop by 3%. However, managing partner Maria-Pia Hope says: ‘We expect the elite independent firms in the Nordics, with their full-service offering and robust client base, to continue to do well in a weaker market.’ (See ‘New challenges’).
Dealwatch
Corporate remains the key driver of the success of independent firms in key Euro Elite jurisdictions, accounting for nearly a third of revenue on average, and 2022 saw some very significant mandates handed out.
In Spain, Uría Menéndez advised KKR on the €2.3bn acquisition of 49% of Reintel and the set-up of a strategic partnership between KKR and Grupo Red Electrica, while Cuatrecasas acted for Seat Volkswagen Audi Group on the joint venture agreement for the €11bn ‘Future: Fast Forward’ project and the construction of a gigafactory that will produce electric vehicle batteries located in Valencia, a deal worth €3.5bn.
In France, Gide advised MSC Group on the 100% acquisition of Bolloré Africa Logistics, comprising all of the Bolloré Group’s transport and logistics activities in Africa, on the basis of an enterprise value of €5.7bn; while Darrois Villey Maillot Brochier acted for Société Générale and ALD in the acquisition by ALD of LeasePlan from a consortium of funds led by TDR Capital in a deal valued at €5bn.
In Ireland, work for Arthur Cox includes advising Greenlink on its 500MW, 190km interconnector project and acting for ESB and Bord na Móna on the development and financing of the 83MW second phase of the Oweninny windfarm, Ireland’s largest wind development project. Other standout matters include advising Brookfield Asset Management on its acquisition of the entire issued share capital of Hibernia REIT for €1.089bn and Starwood Capital Group on its debt finance provision for Echelon Data Centres, an Irish-owned company. William Fry, meanwhile, can point to advising Echelon on the €950m Starwood Capital financing; online food ordering service and Irish unicorn Flipdish on its series B and series C fundraising rounds; as well as deals for Melior, the spin-off private equity fund managed by the former Carlyle team in Ireland.
For its part, Matheson’s highlights include advising Generation Investment Management (the investment management firm of Al Gore) on establishing the fourth vintage of its flagship private equity fund range; advising Bank of Ireland on its acquisition of the Irish assets of the Belgian bank, KBC, which is leaving the Irish market; and advising Octopus Renewables on the acquisition, development and project financing of a 250MW solar plant, which will be the largest in Ireland.
Despite reports of a subdued deals market in 2022 and the gloomier outlook for 2023, for the Euro Elite there is still plenty to be optimistic about. Says Mikko Manner, managing partner of Roschier: ‘Currently both the operational business outlook and the availability of liquidity seem to continue for the Nordic corporates. Equally, all types of private funds have an all-time high of available capital. The biggest question marks relate to how solid the market remains for growth companies and related investments and transactions.’
Roschier represented Philip Morris International in its €16bn public offer for all shares in Swedish Match. This is the largest-ever cash deal, and the largest M&A deal, in the Nordics in 15 years.
And, despite the prominence of corporate, most Euro Elite firms are in a strong position to weather any storm due to their full-service offerings and diversity of practices: very few Euro Elite firms are pure deals shops. ESG-related financings became a large trend over the past year. Due to the volatile situation in the gas market, firms have seen an increased need for restructuring advice in the energy sector. With the independence of energy and access to raw materials becoming more and more significant, a new area of law for some firms is sustainability law in both the public sector and all areas of the economy.
Hans Witteveen, managing partner in Stibbe’s Amsterdam office, comments: ‘In a climate like this, the nature of the work tends to change. Transactions may not be as clear cut. It might start out as a refinancing and then turn into a restructuring and end up being part of a more encompassing deal. It requires a lot of flexibility from lawyers.’
This point is expanded further by Elisabeth Lepique, managing partner of Germany’s Luther: ‘Full-service law firms will be able to compensate the loss of revenue in one service line with a better performance in another. Boutiques do not have this advantage.’
Predictions
Perhaps any optimism for the year ahead should be tempered. As Fernando Vives, managing partner of Garrigues, warned when speaking to Legal Business towards the end of 2022, market players – both new and old – would be remiss to forget that ‘geopolitical conflict, the energy market crisis, the tightening of monetary policy and economic contraction’ loom around the corner.
This means that some planning and adaptability is required from all firms. Says Sverre Tyrhaug, managing partner, of Thommessen: ‘For 2023, we had a townhall meeting trying to predict all costs and revenues for three weeks. We think it will be a good year, which is a strange thing to say as obviously for lots of clients cost-cutting is high on the agenda thanks to increased interest rates and high inflation. But it will not necessarily be a bad year for lawyers – there will be digitisation projects, distressed M&A and consolidation. We think there will be consolidation in the tech, energy and renewables sectors and expect a lot of M&A – competition will increase as there is less money going around. Then of course there will be lots of infrastructure projects.’
The prognosis? Hard to call but it comes down to getting the essential ingredients right. Says Gleiss Lutz’s Arnold and Schwarz: ‘2023 is hard to predict. While we seem to have left the worst of coronavirus behind us, the economic outlook is not that rosy, with a war raging in Eastern Europe, an energy and supply chain crisis, and many other challenges ahead. We feel however that a firm with a clear strategy, broad offering, strong management, great people, and a solid client base will be well positioned.’
In Ireland, managing partner Michael Jackson reflected at the end of last year that Matheson is prepared. ‘Should a downturn happen, we benefit from the fact that we are well spread as a firm with no over-reliance on any one sector or practice area. We also have shown an ability during Covid to redeploy talent from areas which were quieter (the property sector was shut down in Ireland for long periods of time), to areas which had high demand, and that experience will stand to benefit us. We have many senior lawyers who have experience of the financial crisis and of the issues that it threw up, and our restructuring team is the largest of any in the market. Our balance sheet is healthy, and as a firm we believe that we are well prepared both for further growth and for a downturn.’
And that, it seems, is how Euro Elite firms will navigate the headwinds coming their way over the next 12 months. LB
Euro Elite by Revenue*
| Rank | Firm | Region | Revenue | % change |
|---|---|---|---|---|
| 11 | Garrigues | Iberia | €414.2m | 7% |
| 10 | Cuatrecasas | Iberia | €350m | 11% |
| 3 | Noerr | Germany | €297m | 9% |
| 8 | Uría Menéndez | Iberia | €264.4m | 6% |
| 14 | Gleiss Lutz | Germany | €239.5m | 5% |
| 88 | Luther | Germany | €187.1m | 6% |
| 15 | De Brauw Blackstone Westbroek | Benelux | €174m | -13% |
| 82 | Vinge | Nordics | €143.8m | -3% |
| 26 | Roschier | Nordics | €141.3m | 8% |
| 81 | Thommessen | Nordics | €141m | 8% |
| 76 | Wikborg Rein | Nordics | €132.5m | 7% |
| 83 | Bech-Bruun | Nordics | €130.2m | |
| 16 | Legance | Italy | €123m | 21% |
| 18 | Houthoff | Benelux | €123m | |
| 89 | Plesner | Nordics | €115.1m | 22% |
| 35 | Mason Hayes & Curran | Ireland | €106m | 8% |
| 52 | Goldfarb Seligman & Co | Southern Europe | €103.6m | 15% |
| 75 | Wiersholm | Nordics | €101m | 13% |
| 2 | Wolf Theiss | CEE | €100m | 21% |
| 71 | GSK Stockmann | Germany | €96.2m | 13% |
| 38 | Darrois Villey Maillot Brochier | France | €96m | 20% |
| 34 | Pérez-Llorca | Iberia | €91m | 33% |
| 21 | William Fry | Ireland | €85.5m | 0% |
| 31 | Gómez-Acebo & Pombo | Iberia | €85m | 10% |
| 56 | ADVANT Nctm | Italy | €80m | |
| 53 | Hannes Snellman | Nordics | €77.2m | 18% |
| 45 | VdA | Iberia | €74m | 6% |
| 91 | Castrén & Snellman | Nordics | €66.2m | 27% |
| 80 | Kapellmann | Germany | €57m | 1% |
| 84 | Borenius | Nordics | €52.1m | 21% |
| 87 | Krogerus | Nordics | €51.6m | 19% |
| 94 | Abreu | Iberia | €37.8m | 13% |
| 44 | Dorda | CEE | €36.6m | 8% |
| 57 | Rymarz Zdort Maruta | CEE | €26.9m | 3% |
| 48 | WALLESS | Baltics | €15.6m | |
| 78 | Koutalidis Law Firm | Southern Europe | €8.2m | 20% |
* Figures shown only include firms that voluntarily supplied data for the most recently available financial year, in some cases calendar year 2021