‘Profitable organic development is still possible for us, but this isn’t the case for firms in some foreign markets – some cannot grow any further.’ Didier Martin, Bredin Prat
As part of our annual Euro Elite report, management at independent firms in Europe give their views on today’s market challenges
High demand
‘After the strong year in 2021 and the very erratic year in 2022, it will be difficult to plan resources to serve the demands of clients. Clients are also increasingly requesting capacity to support them within their in-house legal departments as well. This is much easier for full-service law firms with an international presence. On the other hand, the price sensitivity of clients must also be considered. Here, boutiques are usually more flexible.’
Elisabeth Lepique, managing partner, Luther
Being flexible
‘This is not a market in which deal shops that are used to turning out one deal after another thrive, this is really a market where there is a flight to quality, which is generally in our favour because we have so much in-depth expertise in so many different areas. So, you see that you are better able to help clients with their problems, which tend to be a bit less straightforward than in good economic times. We’re well positioned for this but it requires some flexibility in what you do.’
Hans Witteveen, managing partner, Stibbe
Tussle for talent
‘The war for talent will continue. While we haven’t had the same intensity as in the London market, we did increase salaries last year and it was due to a lot of work during Covid. While we don’t expect it to be crazy, it will continue. We have recruited more than 50 lawyers recently, which is a lot compared to our size, and we will continue to recruit.’
Sverre Tyrhaug, managing partner, Thommessen
Experience counts
‘A real forecast is difficult, but we think the trend to hire more and more in-house lawyers has at least come to a stop. External law firms must provide highly focused know-how and add real value in a reliable co-operation with in-house lawyers. With legal tech and artificial intelligence, commodity services may dwindle away, but the demand for experienced and skilled partners will not go away.’
Michael Molitoris, partner, SZA Schilling, Zutt & Anschütz
Quality not quantity
‘We don’t want to grow globally to increase gross revenue, but increasing profitability overall is always a goal. We may look at different opportunities for growth in the market conditions – not to merely increase the volume of deals and cases we handle but to handle more of the high-end cases and deals. Profitable organic development is still possible for us, but this isn’t the case for firms in some foreign markets – some cannot grow any further.’
Didier Martin, partner, Bredin Prat
Environmental, social and governance
‘It’s difficult for us to get sufficient people out there to do all the work, in energy in particular. But it’s wider than energy: the whole ESG context is changing fundamentally with all sorts of new regulations from Europe, but also locally here in the Netherlands, around customer due diligence – we’re seeing an increased number of requests to advise on that topic and it’s impacting all areas. Increased regulation is driving business as well from the enforcement and litigation angles.’
Sjoerd Kamerbeek, managing partner, Van Doorne
Healthy competition
‘The German market has long been very competitive, with an influx of international law firms that started around 1990 that shows no sign of abating. Quite the opposite, most networks and law firm mergers, which we seem to see continuing at pace, formulate a particular focus on winning clients in the largest legal market in Continental Europe.
Domestic boutiques are always tough competitors in the niche areas that they specialise in. They may not have the breadth and depth of a full-service law firm such as ours, but they are experts in their field, usually with a different cost base and therefore competitive hourly rates that large law firms cannot always match. Where price is a key decision criterion, domestic boutiques make it easy for clients to see the benefits of working with them.’
Michael Arnold and Alexander Schwarz, co-managing partners, Gleiss Lutz
Person people
‘One challenge is working out how to keep people happy and remain with the firm. Competition is not just coming from law firms anymore, it includes companies looking for in-house lawyers, including banks and the Big Four. The other issue is how to find additional people to help drive growth, along with trying to create a better working culture and engaging with new people.’
Miloš Vučković, senior partner, Karanovic & Partners
Tougher challenges
‘One challenge will be to have a generation of people internally who have never experienced a recession to weather the period ahead, amid the general uncertainty at macro level. Clear and experienced leadership will be important. Cyber security remains another, real challenge.’
Maria-Pia Hope, managing partner, Vinge