Independent law firms across the Benelux region have gone into 2022 with a renewed sense of optimism, with them successfully withstanding the challenges of Covid-19 to continue winning exciting new mandates. Reflective of the buoyant mood of the market, at Stibbe, Brussels managing partner Wouter Ghijsels says: ‘Last year was our best year in terms of turnover. Our office is growing, and things are actually going extremely well in Brussels.’
Deal activity in Belgium has remained high since summer 2020, with firms reporting unprecedented demand from clients, as pre-pandemic trends in debt markets reassert themselves. 2021 saw an increase in activity from private equity funds, with the TMT, logistics and industrial sectors doing particularly well. Real estate, after a period of uncertainty, has once again become a sought-after asset, with centrally-located office space, logistics property and data centres in particular proving attractive targets for international investors, REITs and portfolio holders.
Ghijsels acknowledges that it has been a ‘very, very’ active year on the capital markets front, ‘especially by Belgium’s standards. We’ve seen lots of secondary fundraisings, particularly in the real estate and care sectors’. The life sciences and pharmaceutical sectors are ever-growing targets for investors, particularly in the country’s renowned biotech start-up arena, with a flurry of activity across the Flemish and Walloon regions in the past 12 months.
Commenting on the prevalence of ESG-related work in the Belgian market, Ghijsels concedes that, ‘While in Brussels we do slightly less ESG-based regulatory work than, say, in the Netherlands, we certainly see it a lot in capital markets transactions, lots of green bonds, etc. We recently had one US private equity client that paid a phenomenal price for an asset because it ticked so many ESG boxes. The regulatory side is a little less developed, but we see it in deals all the time now.’
A wave of restructurings spurred by the pandemic has, perhaps invariably, incurred a subsequent wave of restructuring-related disputes. Yet broadly speaking, pre-litigation strategy, consultation, and mediation services continue to grow in popularity, with increasing financial pressure and image concerns making businesses more and more reticent to go to court.
In Luxembourg, with high-quality targets rising in valuation, there has been a corresponding rise in the number of club deals, with investors pooling resources and risk to acquire larger targets. The jurisdiction is a strong choice for these arrangements, due to its AAA credit rating and favourable regulatory environment, making it a favoured destination for complex structured arrangements involving multiple private equity investors. One example of this trend was the recently-announced €1.56bn acquisition of Accell Group by a consortium led by KKR, alongside other investors, which saw a key role for NautaDutilh advising Accell Group.
In line with what was perhaps 2020’s hottest capital markets trend, Bernard Beerens, executive partner at Stibbe’s Luxembourg office, has overseen a number of SPACs being incorporated in the country: ‘We’ve worked with companies seeking listings on the Frankfurt Stock Exchange and the Amsterdam Stock Exchange, and a number of IPOs of Luxembourg companies being listed in the Netherlands, and even in Germany.’
The legal market in the Netherlands saw a strong flow of work across a number of key areas in 2021 and this trend is expected to continue in 2022. According to Hans Witteveen, Stibbe’s managing partner in Amsterdam, ‘there was a lot of M&A activity, a lot of which was private equity driven. It’s very well known that private equity funds have a lot of cash on hand, which they’ve wanted to invest, and the Netherlands has certainly been a destination where they’ve found targets’.
The firm’s recent work included acting for Apax Partners on the €5.1bn acquisition of T-Mobile Netherlands by a consortium of Apax Partners and Warburg Pincus. In another noteworthy transaction, De Brauw Blackstone Westbroek acted for Royal Philips on the €4.4bn sale of its Domestic Appliances business to Hillhouse Capital. In addition, firms have been firing on all cylinders in the capital markets arena. ‘We’ve had a very high number of IPOs on Euronext Amsterdam and I would say an extraordinary number of SPAC deals,’ says Witteveen.
Stibbe’s equity capital markets team acted as the lead counsel to the issuer and selling shareholder, Advent, on the IPO of InPost on Euronext Amsterdam. Also notable is that NautaDutilh acted for the sponsors on the Euronext Amsterdam IPO of Pegasus Acquisition Company Europe; this is the first European SPAC deal where shares, units and warrants can be traded simultaneously (like on US SPACs). Elsewhere, firms remain active in undertaking work for clients in the fintech sector. They also continue to grapple with myriad legal issues associated with the so-called platform economy.
ESG-related issues also keep lawyers busy, a point which Witteveen acknowledges: ‘This is something that we definitely focus on and where we see a lot of client demand in different areas. Obviously, there’s boardroom-level advice on all kinds of topics to do with ESG, but also very down-to-earth work in terms of due diligence.’
‘Last year was our best year in terms of turnover. Our office is growing, and things are actually going extremely well in Brussels.’ Wouter Ghijsels, Stibbe
How do independent firms in the Benelux region stand out in the face of fierce competition for work, particularly from global law firms? Witteveen makes an interesting point in relation to the Dutch legal market: ‘One angle is that the global firms don’t always have the capacity or the willingness to really invest to the same degree in a market such as the Netherlands in areas that are important if you want to do a certain kind of deal. So, they often miss the depth in various areas that we have and some of our independent competitors also have. If you have a deal with a pension problem, or some kind of financial regulatory problem (or all of them) in one deal, a firm like ours or some of our competitors can advise on that because we really cover those areas. We have in-depth expertise in those areas.’
Moving forward, what challenges do independent law firms in the Benelux face in the coming year? Ghijsels identifies the retention of talent as a key area of focus: ‘A lot of people are making life choices, maybe slightly more so than before the pandemic, where you had a churn which was normal. It will be higher in the coming months and years, so retention is key.’
Equally as critical to the success of a firm is its ability to recruit premium talent. ‘It’s a buyers’ market,’ Ghijsels acknowledges. ‘It’s about attracting people and convincing them that you’re worthy of their time. For them to spend their time and learn at your firm.’ Beerens concurs: ‘It’s pretty much the same in Luxembourg as well. It’s a very competitive market.’ LB
| Rank (by L500 ranking) | Firm | Region | Total lawyers | Total partners | Promotions | Offices | Partner hires |
|---|---|---|---|---|---|---|---|
| 5 | NautaDutilh | Benelux | 400 | 65 | 3 | 6 | 1 |
| 8 | Loyens & Loeff | Benelux | 900 | 102 | 4 | 11 | 2 |
| 9 | Stibbe | Benelux | 365 | 77 | 3 | 5 | 1 |
| 18 | Houthoff | Benelux | 300 | 47 | 7 | 5 | |
| 20 | De Brauw Blackstone Westbroek | Benelux | 386 | 59 | 6 | 5 | 6 |
| 52 | Van Doorne | Benelux | 200 | 45 | 2 | 3 |