Following a turbulent period of falling oil prices, independent firms in the Nordics are finding profitable new markets
Crude oil prices may still be hovering between $45 and $50 a barrel but the Nordic economies and the independent law firms based in these markets are suffering less than in previous years.
Although Sweden’s reputation as a technology hub sheltered it from the worst effects of the drop in the price of crude, Norwegian businesses particularly felt the hit. However, recently law firms in the country have found profitable new lines, noticeably in restructuring work.
‘Norway was hit last year by the fall in oil prices, as people were figuring out how to regroup,’ says Kjetil Hardeng, head of corporate M&A at Haavind in Oslo. ‘Now some of the firms are reporting their best results. There has been a lot of work driven by the restructuring of the offshore oil service business – renegotiating bonds and loan agreements and selling off assets – huge restructurings, particularly in the western part of Norway. Those firms that are really involved in that sector have been very profitable.’
And the renewed optimism and confidence in the Norwegian market has also increased foreign investment in the country, which has driven the real estate market and other infrastructure-related work, including roads and railways. ‘Private equity is really looking to deploy its cash, so there will be more activity,’ adds Hardeng. The combination of private equity, the restructuring work from the oil and shipping sectors and Norway seeking to diversify beyond oil and gas – these components should ensure we have a nice year.’
Deal volumes in the Nordics have steadily grown, with corporate M&A and dispute resolution performing very well. According to data from Mergermarket, there was a total of 681 deals in 2016, worth €34.3bn compared to 594 deals in 2015 with a total value of €29.1bn. That optimism is also reflected in the Finnish legal market, which is picking up after some tough years. The country also experienced its largest initial public offering (IPO) of the last decade, with the listing of Finnish telecoms company DNA Oyj on Nasdaq Helsinki for a value of over €1.3bn.
‘The window for IPOs has been open for the last year or so,’ says Sakari Lukinmaa, managing partner of Castrén & Snellman, who acted for DNA Oyj on the IPO. ‘It used to be a very inactive market but over the last two or three years it has picked up a lot and a highlight of that is DNA. We’ve had some success stories and there is now a confidence in the market that you can carry out IPOs successfully.’
‘As the world is getting more complicated demand for legal services in Finland will continue to grow.’
Sakari Lukinmaa, Castrén
Castrén & Snellman also advised on one of the largest buyouts in the Finnish market last year, the acquisition of social care company Esperi Care Group by UK-based specialist asset manager Intermediate Capital Group.
‘We are confident,’ adds Lukinmaa. ‘The Finnish economy seems to be picking up, there is strong evidence that as the world is getting more complicated the demand for legal services in Finland will continue to grow and we intend to get our fair share of that growth.’
Meanwhile in Denmark, according to Bech-Bruun’s managing partner Simon Evers Kalsmose-Hjelmborg, clients have become more sophisticated and handle much of the basic work internally, meaning some of the smaller private practice firms are suffering. ‘The high-end work is probably increasing because there are in-house lawyers who spot the legal issues and problems that they might not have done in the past. It was a fantastic M&A market in 2016.’
Despite the fact that this year saw DLA Piper become the largest firm in the Nordics following a tie-up with local Danish firm LETT, Evers remains bullish about the impact, if any, this will have on the leading independents. DLA also confirmed a tie-up with Swedish law firm Grönberg Advokatbyrå last June and agreed a combination with 30-lawyer Finnish law firm Peltonen LMR in February 2016.
‘Not to sound arrogant, but we are not really threatened by this,’ says Kalsmose-Hjelmborg. ‘The Scandinavian market is characterised by the fact that all the tier-one firms in Denmark receive referrals from a lot of different law firms around the world and if we were to join one alliance, the maths would show that the referrals from other firms would vanish and one alliance would not compensate for that loss.’
Similarly, in Sweden – the region’s strongest legal market – the leading independents continue to do well despite increased competition from international firms. Roschier, which has a substantial practice in both Finland and Sweden, saw a 6% increase in turnover to €80.7m for the year 2015/16. The firm also worked on the 2016 IPO of Ahlsell, a Nordic plumbing and electrical tools supplier, which raised a total of SEK6.93bn ($708m) and was the largest public offering in Sweden for 16 years in a market experiencing a transactional boom. LB
kathryn.mccann@legalease.co.uk
| Firm | Country | Total lawyers | Total partners | No. of offices |
| Mannheimer Swartling | Sweden | 400 | 87 | 9 |
| Vinge | Sweden | 288 | 72 | 5 |
| Bech-Bruun | Denmark | 268 | 72 | 3 |
| Kromann Reumert | Denmark | 250 | 64 | 3 |
| Lindahl | Sweden | 250 | 90 | 6 |
| Wikborg Rein | Norway | 239 | 60 | 3 |
| Gorrissen Federspiel | Denmark | 222 | 46 | 2 |
| Roschier | Finland | 215 | 42 | 2 |
| Magnusson | Sweden | 200 | 47 | 15 |
| GLIMSTEDT | Sweden | 190 | 75 | 16 |
| Plesner | Denmark | 190 | 41 | 1 |
| Simonsen Vogt Wiig | Norway | 180 | 76 | 7 |
| Hannes Snellman | Finland | 173 | 43 | 4 |
| Thommessen | Denmark | 170 | 52 | 3 |
| Castrén & Snellman | Finland | 150 | 29 | 3 |
| Schjødt | Norway | 150 | 64 | 4 |
| Wiersholm | Norway | 150 | 44 | 1 |
| Arntzen de Besche | Norway | 140 | 58 | 3 |
| Wistrand | Sweden | 136 | 56 | 2 |
| BA-HR DA | Norway | 130 | 36 | 1 |
| Horten | Denmark | 125 | 44 | 1 |
| Selmer | Norway | 120 | 40 | 2 |
| Borenius | Finland | 117 | 26 | 4 |
| Haavind | Norway | 109 | 37 | 1 |