With soaring interest rates, global instability, as well as political and economic insecurity both at home and abroad, the beginning of 2023 was a cautious and uncertain time for law firms across the Nordic region, particularly given the tumultuous year that was 2022. Nevertheless, the region has remained remarkably resilient to global pressures, with firms seeing 2024 as a year of opportunity, driven in part by weak local currencies in Sweden and Norway, developments in AI and ESG mandates, and a surprisingly active corporate space.
‘Like most lawyers, we were surprised at how good 2023 was,’ says Jan Dernestam, managing partner at Mannheimer Swartling. ‘We had to predict cautious budgets for 2023, but it’s looking like we’re up roughly 10% from 2022. This goes for most of the larger firms in Scandinavia.’ Overall, he notes: ‘It’s difficult to pick one area where we’ve been busy because we’ve been busy all over,’ despite the initially challenging market.
‘At the outset of 2023 the macroeconomic factors were quite dire,’ agrees Maria-Pia Hope, managing partner at Vinge. ‘In terms of transactional activity, the beginning of the year was relatively weak. But then, contrary to our predictions, things really picked up towards the end of spring – and the autumn was incredibly busy. We had our best November ever.’
The Norwegian market also saw more optimistic results than feared, with firms noting that 2023 proved to be a surprisingly positive year. ‘We experienced good levels of activity across several areas,’ notes Thommessen’s managing partner, Sverre Tyrhaug. ‘Though we saw a decrease in activity in certain fields, like aquaculture, this was more than made up for by unexpectedly high levels of activity elsewhere, particularly in the corporate space. It showed the importance of a diverse offering.’ Like Dernestam, Tyrhaug also puts Thommessen’s estimated growth at around 10%.
Firms note the relative weakness of local currencies as a key driver of activity. ‘Sweden had a weak currency in 2023, so it was cheaper to buy things. Sweden saw a lot of interest from elsewhere in the world,’ notes Hope. Roschier’s managing partner, Mikko Manner, agrees: ‘There is a very favourable investment environment, driven partially by the fact that the krona has been decreasing in value, and that means that it’s a very interesting market for any corporate or financial investor who works with dollars or euros.’ Likewise, in Norway, Tyrhaug agrees that despite domestic political uncertainty, partially driven by the introduction of a controversial ground rent tax on salmon, he believes that Norway will continue to remain an attractive market for international investors. ‘Because of the weakness of the Norwegian krone, more foreign capital is entering Norway.’
Another key driver was corporate work. ‘Our corporate group did extremely well, exceeding what was already a fairly aggressive budget,’ notes Tyrhaug. ‘We saw a lot more M&A, both private and public, than we had assumed.’ Dernestam is a little more subdued on the private M&A front, noting that there has been a slight downturn in activity in this space. ‘Still, when we say downturn in private M&A in Scandinavia, in practice this means that we’re more or less back to pre-pandemic levels,’ he says.
Nevertheless, political insecurity, both domestic and global, remains a core concern. ‘Geopolitical issues will draft much of the agenda for 2024 and things can happen really quickly,’ says Dernestam. ‘Half the world’s population is entering into an election year,’ notes Hope. ‘That will affect activity and how busy law firms will be. It’s a very volatile time, isn’t it? It’s become increasingly difficult to predict what will happen.’
This in itself means significant opportunities for law firms, with Hope commenting: ‘Volatile times create a lot of opportunity because people want to be proactive.’ Across the border, this same sentiment echoes. ‘It’s a space of opportunity, in terms of risk advisory and compliance, even if the geopolitical backdrop is bad news,’ agrees Tyrhaug. ‘One of our biggest investments of 2023 was into our strategic risk advisory offering. We’re looking at geopolitics and risk in a wider sense. Norwegian businesses want to know how what they read in the newspapers will affect them and their business models, supply chains, and hiring plans. This will significantly shape 2024.’
Ultimately, firms remain cautiously optimistic when looking ahead. Notes Tyrhaug: ‘We’re entering 2024 with the feeling that, as a lawyer, we’re pretty hopeful that this will be a fairly good year – nothing crazy, but fairly good.’ ‘We’re not seeing any signs at the moment suggesting that 2024 will be a worse year than 2023,’ says Dernestam.
For firms in Denmark, 2023 played out in a similar fashion, with the year providing a bounce back from the instability of 2022. Niklas Korsgaard Christensen, managing partner at Plesner, comments: ‘We anticipated 2023 to be a rather difficult year because of the war in Ukraine, inflation and the energy crisis, however the year proved to be the busiest year in the history of the firm.’
Lawyers were kept active across the board, with the energy sector – particularly renewable energy and ESG projects – continuing to dominate the Danish market; the jurisdiction remains a leading region in the green transition, particularly regarding offshore wind farm developments. It hasn’t all been smooth sailing, however, with the Danish government closing its ‘open door’ offshore wind scheme in early 2023 following concerns that the policy didn’t comply with EU rules, ultimately leading to the remaining offshore projects that had applied to the scheme being rejected.
For Christensen, this ESG trend, paired with the buzz around AI, are the key issues moving forward: ‘ESG and AI might be buzzwords to many, but for us, they are very important subjects that are of high interest to clients, employees and management. Not only from a business point of view but also the responsibility that comes with being a significant part of society today.’
Maintaining the trend of recent years, the Danish market has also been awash with lateral moves and partner hires, adding variation to a traditionally stable legal market. One of the main proponents of the movement is Norwegian firm Schjødt which, following the establishment of its Copenhagen base in November 2022, has recruited extensively across practice areas from other firms to fill out its Danish offering. Christensen also cites that the ongoing war for talent in Denmark is driving competition between firms to be an attractive place to work.
Unlike the rest of the Nordics, the reflections in Finland are perhaps more subdued, with firms reporting growth that fell short of the promise 2023 offered. ‘Everybody had a moderately positive year,’ states Manner, ‘but I don’t think any firm really actually grew in any meaningful way. Everybody thought that 2023 would be a boom year, when in reality it was a third super slow, a third picking up and a third active.’
When establishing the driving factors behind the changeable year, two trends stand out. Firstly, the slow recovery of the transactional market, particularly private equity-driven transactions, saw a decline in domestic and cross-border deals in the Finnish market. As Manner recognises, ‘private equity driven or sponsor-driven deals became non-existent, and this had a spillover effect to practice areas that are not inherently driven by volume on the deal side.’ However, from mid-2023 onwards, the picture began to look a little rosier: ‘From the middle of the year, there was a lot of activity on the public transaction side which supplemented, or replaced, the issues on the private side,’ Manner adds.
‘I don’t think any firm really grew in any meaningful way. Everybody thought that 2023 would be a boom year, when in reality it was a third super slow, a third picking up and a third active.’ Mikko Manner, Roschier
Secondly, an increased cost-consciousness by clients, particularly on the corporate side, has increased the work kept in-house, with external counsel often reserved for the most complex mandates. According to Manner: ‘There’s pressure on corporates to insource a lot of the pre-work, meaning they’re doing a lot of the preparatory work themselves. The level of certainty of a project has to be pretty high now for external counsel to be involved.’
When looking ahead, Finnish firms are keeping the country’s eastern neighbour firmly in the periphery: ‘There may exist a challenge for Finland due to the so-called country risk stemming from our border and the unpredictability of the Russian regime,’ says Manner. However, on a more positive note, the energy sector remains a key focus for investment, with the green transition propelling an anticipated boom for 2024.
Ultimately, Nordic firms are entering 2024 in a hopeful mindset, with the green transition, foreign investment, and a surprisingly resilient corporate and transactional space providing opportunities for continued growth and activity in the year. Although global conflict, both in the Middle East and along the Finnish and Norwegian borders, remains a pressing issue, this also serves as a space for opportunity. At the end of the day, says Manner: ‘We believe that the Nordic market continues to punch well above its weight in terms of the demand and complexity of the legal work.’ LB