In France, as elsewhere, the Covid-19 crisis put firms under high pressure to quickly adapt to new regulations and remote working requirements, both for the firms’ own set-up and for clients undergoing the same challenge. The French market proved to be very resilient to the challenges caused by the outbreak of the pandemic in Europe, with the country’s large independent firms – as full-service outfits – able to help their clients with every Covid-related consequence.
‘There is almost a double movement in the market,’ observes August Debouzy’s managing partner Mahasti Razavi, ‘with transactional activity proving to be quite robust after a noticeable dip in spring, but a clear uptick in restructuring work.’
Olivier Diaz, partner and member of the executive committee at Gide Loyrette Nouel, points out that ‘in the first phase of the lockdown, strategic transactions went ahead with the help of a range of technologies, while transactions with less conviction behind them had a tendency to be disrupted’.
‘First-tier Anglo-Saxon peers have also benefited from the high level of transactional activity in the US market,’ remarks Diaz. But the French independents also handle a significant international caseload, both those with their own international office network, such as Gide, and firms without an international footprint of their own, but with close ties to best-friend firms. Razavi notes that August Debouzy’s independent status enables it to be more selective in its choice of transactions and to focus on the more strategic and interesting projects.
While M&A transactions and venture capital deals continue to be among the busiest areas in the market, the leveraged buyout market seems to have been more affected. Firms report ongoing activity in the mid-cap market, the biggest LBO segment in France, with large-cap transactions expected to become even rarer than they already were in the l’Hexagone. Razavi notes that employment law teams have been extremely busy since the launch of the first Covid restrictions in March 2020, partly to assist with the regulations concerning working conditions, partly to assist with necessary redundancies or furlough issues. Real estate advice was also particularly sought after, according to Diaz, especially on the renegotiation of commercial leases.
‘There is almost a double movement in the market, with transactional activity proving to be quite robust after a noticeable dip in spring, but a clear uptick in restructuring work.’ Mahasti Razavi, August Debouzy
IP also became a big topic for many clients, as the Covid crisis progressed and they sought to defend and potentially expand market share. While many firms saw a high number of instructions regarding pre-litigation matters, especially given the closing of the French courts in spring 2020, disputes have picked back up since the summer and are not expected to drop off any time soon. Regulatory advice on the implementation of the various Covid-induced rules in different sectors was understandably in high demand, not least because of the often short timeframes, especially at the beginning of the outbreak.
In terms of team development, many firms report a recruitment freeze until the pandemic is contained and the full financial impact on firms can be assessed. Others remain opportunistic, but are not actively looking to make significant hires soon. August Debouzy has proved to be the exception to the rule among the French independents when it announced the arrival of two new lateral hires in finance at the beginning of January 2021. Firms stress the importance of focusing on matters that are strategic for clients as a way of retaining staff and as a response to the growing number of legal tasks that are handled with the help of digital solutions. Given the uncertainty surrounding the development of the pandemic and the government’s response to it, firms maintain that it is crucial to take good care of their employees from the start of lockdown, especially those shouldering the additional challenge of an unofficial full-time childcare job at home.
For 2021, firms do not anticipate a major economic downturn, even temporary, and some major transactions, such as the proposed takeover of Suez by Veolia, are in the works. However, the year did not start without trepidation. Uncertainty over the vaccine rollout in the EU, the new variants and the long-term impact of the Covid crisis on a number of sectors, especially the hospitality and retail sectors, compounded with the different Covid restrictions in other jurisdictions, have continued to contribute to a palpable unease.
Both August Debouzy and Gide stress the importance of steering clients safely through legal waters while also providing reassurance regarding the wider picture. After all, ‘the law is a highly psychological profession that runs on confidence and trust’, explains Diaz.
‘You have to be your own light,’ states Razavi, ‘and take as much stress off your clients as possible.’ Judging from the successful end of year reports, the French independents are currently shining bright. LB