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.’
Despite the strong Swiss franc, the rejection by Swiss voters of significant corporate tax reform in a February 2017 referendum, the continued demise of private banking through restructuring and consolidation, and even falling sales for Swiss watchmakers, Swiss law firms have done well.
In April, Bär & Karrer advised CVC Capital on the acquisition of an 80% stake in luxury watchmaker Breitling valued at $875m. ‘We have been extremely busy, particularly in M&A, confirms managing partner Daniel Hochstrasser. ‘There are strong, liquid buyers around looking for interesting targets – some are in Switzerland, which has a large number of very solid, very attractive and perhaps undervalued targets.’ The firm’s pipeline is also strong: ‘A lot of transactions that we are working on are far from finished.’
Further proof comes in the deals already completed. Last year saw Syngenta taken over by China National Chemical Corporation in the largest-ever Swiss M&A deal at $45.9bn. This was followed in 2017 by Johnson & Johnson’s acquisition of Swiss biotech company Actelion for $30bn. In both cases, the acquiring company was advised by Homburger. Bär & Karrer advised Syngenta, while Niederer Kraft & Frey took the lead role for Actelion.
Daeniker describes the Actelion takeover as ‘absolutely fascinating’, ensuring that US rules dovetailed with the Swiss takeover concept, but also ‘a bit of a cultural challenge.’ But he adds: ‘In terms of our legal business, M&A is only one pillar. The second is the banks. They are still coping with capital raises and organisational restructurings as a result of new bank supervisory rules. The third pillar is investigations, mainly relating to the US Department of Justice, which also keep us very busy.’
Lenz & Staehelin is working with Homburger on a large cross-border tax investigation relating to a listed Swiss company. But the firm’s managing partner, Guy Vermeil, is cautious: ‘This year is stable, similar to 2016. I was expecting a decrease but it’s the same so far. Some departments are extremely busy – tax lawyers are working day and night.’
He adds that fees ‘are not stable at all – we try, of course, to keep fee rates stable but this is a challenge for all Swiss firms because most clients want a cap, a discount – we have no choice but to adapt from time to time.’ Borsodi agrees: ‘clients are increasingly cost conscious – that’s a discussion we have regularly when we start a mandate’.
Nevertheless Bär & Karrer is bullish. ‘I am optimistic that we are going to have another good year. We are on the verge of some major investments – we need more space for additional fee-earners,’ says Hochstrasser, describing his plans to build an additional floor in its main office and to increase lawyer headcount by up to 10%, some of it through lateral hires.
Whatever economic and political difficulties there may be, Daeniker concludes: ‘In Switzerland, pragmatism always prevails in the end.’ LB
| Firm | Total lawyers | Total partners | No. of offices |
| Lenz & Staehelin | 200 | 44 | 3 |
| Walder Wyss | 160 | 48 | 6 |
| Homburger | 130 | 31 | 1 |
| Bär & Karrer | 123 | 41 | 4 |
| Schellenberg Wittmer | 113 | 41 | 3 |
| Niederer Kraft & Frey | 100 | 34 | 1 |
| Pestalozzi | 91 | 27 | 2 |
| Meyerlustenberger Lachenal | 85 | 35 | 5 |