In what should be difficult times, our annual Euro Elite survey finds the 100 leading firms across more than 40 jurisdictions largely in great shape and looking forward to 2022 – with clearly no room for doom and gloom.
The European Commission’s Winter 2022 Economic Forecast projects that, following a notable expansion by 5.3% in 2021, the EU economy will grow by 4% in 2022 and 2.8% in 2023. Growth in the euro area is also expected at 4% in 2022, moderating to 2.7% in 2023. The EU as a whole reached its pre-pandemic level of GDP in the third quarter of 2021 and all member states are projected to have passed this milestone by the end of 2022. The comments coming back from the leading independent law firms across the region reflect this macroeconomic picture – they are generally in rude health.
What cements their success, which cannot be measured by numbers alone, is the culture of independence. Whether their reputation is earned through challenging Global 100 firms head on in their own backyards, or by thriving in challenging markets largely untouched by international behemoths, the most successful Euro Elite firms preserve a unique identity.
‘I believe both independent firms such as ours and network firms such as large UK and US players have been similarly successful in adjusting to the pandemic,’ says Pedro Pérez-Llorca, senior partner at Pérez-Llorca in Spain. ‘I see a lot of demand from clients and busy firms generally. The strength of independents arises from the significant increase in regulatory and litigation hurdles to cross-border deals. Clients need solid full-service capabilities and robust local expertise, otherwise deals may stall in courts or agencies.’
This full-service capability setting the local players apart is something that Morais Leitão, Galvão Teles, Soares da Silva & Associados’ managing partner, Nuno Galvão Teles, also sees: ‘This is a rather strange moment, in terms of law firm activity: while there is a steady pipeline typical of booming years (corporate and M&A, private equity, banking, competition), there is also a rather strong activity more associated to a distressed economy (restructuring and labour), in sectors such as hotels and tourism and industrial companies exposed to the difficulties generated by the supply chain crisis.’
Strength to strength
Our average Euro Elite firm, which is unchanged from last year with 260 lawyers, and 61 partners (just one more partner than last year), is coping well despite the enduring spectre of the global pandemic. In fact, many have come out the other side in better shape, arguing that the effects of Covid, while destructive on a global level, did not impact the business of law quite as much as anticipated. The leading European independents battened down the hatches and prepared for the worst, but emerged largely in better shape than they thought they would be.
‘The strong and stable outlook for the Norwegian economy continues to attract activity, which fuels an already strong legal market.’
Thomas K Svensen, BAHR
Our individual market reports, written by a team of researchers from The Legal 500 EMEA with direct access to the key firms in each region, contains much of the robust language that was so evident in our 2021 report. One example is this from Thomas K Svensen, managing partner of Nordic firm BAHR: ‘Despite an uncertain global situation, the strong and stable outlook for the Norwegian economy continues to attract activity, which again fuels an already strong legal market.’
The numbers posted by some Euro Elite firms largely back this optimism up. Of the 30 firms that have made public their turnover for their most recent financial years (see table) – in some cases this would be calendar year 2020 – it is Mason Hayes & Curran that stands out. The only Dublin firm to ever go on record with its financial performance – and it has done this for a number of years now – this firm is often a bellwether for the Euro Elite as it is one of the first firms to announce its 2021 figures. Turnover is up a striking 23% to €98m, a notable turnaround from 2020, when revenues fell 6% to €80m – reflecting the impact of the initial pandemic restrictions on the economy across Europe.
Managing partner Declan Black told The Irish Times that this performance ‘has returned us to a pre-pandemic growth trajectory, so if external conditions stay favourable we hope to grow considerably again in 2022’, while the firm in its Euro Elite form commented: ‘All areas of the firm grew with particularly strong contributions from transactional work in corporate, real estate and financial services.
‘The firm also benefited from high levels of activity in sectors where the firm is pre-eminent. Energy sector work, particularly renewables, surged. The firm had some signature transactions in financial services including acting for AIB in Project Bay, a loan portfolio sale. In technology, the firm has one of Europe’s largest privacy groups which continued to represent many household names.’
With 11 of 30 firms experiencing double-digit revenue growth, the outlook appears strong for the Euro Elite. Just two firms saw reverses in turnover: Germany’s Luther, which saw a 6% drop due to some restructuring (see ‘Bouncing back’) and one of the Euro Elite’s most prestigious firms, Uría Menéndez, which saw turnover fall an imperceptible 1% to €248.9m – and this was at 31 December 2020 as FY2021 figures were not available at press time.
Corporate remains a key driver of the success of independent firms in key Euro Elite jurisdictions, and 2021 saw some very significant mandates handed out. For example, the merger between the third and the fourth largest banks in Spain – CaixaBank’s acquisition of state-owned financial entity Bankia, with €623.8bn in assets – saw Uría Menéndez advise CaixaBank, while Garrigues and Gómez-Acebo & Pombo acted for Bankia.
‘The pandemic has highlighted the importance of solidity and solvency.’ Fernando Vives, Garrigues
Says Alexander Ritvay, co-managing partner of Noerr: ‘With the low interest rates and the liquidity that’s in the market, we believe that transactional activity – both domestic and foreign – will continue and probably increase in the forthcoming 12 months. This is likely because there is also significant reorganisation as well as restructuring going on in many industries.’ Noerr has led the way on some key mandates in Germany over the past 12 months including advising, as part of the global restructuring of insolvent DAX30 company Wirecard, on the sale of its European core business to Banco Santander (involving asset and share deals in Germany, Dubai and India) and the sale of Wirecard North America to Syncapay.
A note of caution
However, despite widespread optimism, some management figures among Europe’s elite independent firms are keen not to get too carried away. Says Vienna-based partner Andrea Gritsch, who sits on Wolf Theiss’ management board: ‘We already see on the horizon that interest rates might change. Money might not stay as cheap as it was and currently is. And the second factor is, of course, looking towards our region, the question of stability and the conflict between the Ukraine and Russia.’
Says Fernando Vives of Garrigues: ‘We all hope that 2022 will be the year of recovery post-Covid, but there are enough clouds on the horizon to keep our optimism in check. The new reality, which we cannot yet classify as post-pandemic, is proving to be highly complex… We have learned the importance, not only in Spain but at a global level, of being prepared for whatever the future may bring. Businesses are facing uncertain times and we as lawyers must rise to the task of meeting their needs. The pandemic, much like the previous financial crisis, has also highlighted the importance of solidity and solvency; growth without a solid foundation and a powerful business culture is meaningless.’
Whatever the outcome of economic and political struggles in the short-to-mid term, there is no doubting the resilience and longevity of elite independent firms across Europe. As Gorrissen Federspiel’s managing partner Martin André Dittmer remarks: ‘The future is very bright. Independent firms have continued to perform strongly, and as long as they make use of that independence in order to adapt and evolve, then the model will see them continue to thrive’. LB
Euro Elite by turnover
| Firm | Region | Revenue (€m) | % change |
|---|---|---|---|
| Garrigues | Iberia | 386.9 | 1% |
| Cuatrecasas | Iberia | 315.3 | 0% |
| Noerr | Germany | 253 | 9% |
| Uría Menéndez | Iberia | 248.9 | -1% |
| Gide Loyrette Nouel | France | 230.2 | 12% |
| Gleiss Lutz | Germany | 227.5 | 5% |
| De Brauw Blackstone Westbroek | Benelux | 200 | 20% |
| Luther | Germany | 176 | -6% |
| Schjødt | Nordics | 163.5 | 17% |
| Gianni & Origoni | Italy | 150 | – |
| Roschier | Nordics | 131.3 | 16% |
| Thommessen | Nordics | 130 | 16% |
| Wikborg Rein | Nordics | 127.6 | 10% |
| Walder Wyss | Switzerland | 120 | 13% |
| Bech-Bruun | Nordics | 114.7 | 3% |
| Mason Hayes & Curran | Ireland | 98 | 23% |
| BAHR | Nordics | 89.9 | 18% |
| GSK Stockmann | Germany | 84.9 | 6% |
| De Pardieu Brocas Maffei | France | 84.4 | 6% |
| Wiersholm | Nordics | 83.7 | – |
| Wolf Theiss | CEE | 82.9 | – |
| Gómez-Acebo & Pombo | Iberia | 76.2 | 8% |
| Advant Nctm | Italy | 70 | 13% |
| VdA | Iberia | 70 | – |
| Pérez-Llorca | Iberia | 68.5 | 7% |
| Niederer Kraft Frey | Switzerland | 68 | – |
| Bruun & Hjejle | Nordics | 67.6 | 3% |
| Kapellmann | Germany | 57 | – |
| Pedersoli | Italy | 51.1 | 8% |
| Sorainen | Baltics | 33 | 19% |
* Figures shown only include firms that voluntarily supplied data for the most recently available financial year, in some cases calendar year 2020