When the world went into lockdown in March/April 2020, everyone expected the worst for the economy. While it is safe to say that some countries struggled more than others, Switzerland conquered the crisis and even exceeded pre-Covid activity in some areas.
As one of the wealthiest countries in the world, Switzerland’s GDP has been on a steady increase and almost tripled in the last 20 years. Projections also show significant growth from 2020 to 2021, stressing the fact that the pandemic had little to no impact on the Swiss economy. This was also witnessed by Thierry Calame, the new managing partner at Lenz & Staehelin: ‘The pandemic continued to be the largest challenge this year. However, thanks to the robust Swiss economy there has not been any economic downturn in 2021, but rather a significant recovery.’
When the second wave hit in October 2020, the rise in Covid-19 cases and the excess mortality worried cantons; but they managed to get the situation eventually back under control without mandatory home working but rather a recommendation. Of help was also the arrival of the vaccine, even though the initial roll-out was not seen as a success story. As of late November 2021, around 65% of the population had received both doses of the vaccine, with booster shots to follow.
Aside from a partly liberal approach to lockdown, the reasons for Switzerland’s smooth sailing included the measures introduced by the government to assist businesses. More than CHF65bn (€62.4bn) was set aside at the beginning of the pandemic; a large part of it was made available as emergency loans for struggling businesses, and additional loans for the start-up scene were also handed out.
‘Over the last 12 months, we see a very strong M&A market which exceeds pre-Covid activity levels.’
Thierry Calame, Lenz & Staehelin
Another key measure to protect against the feared wave of insolvencies was the introduction of a waiving of the obligation to declare insolvency for several months. While sectors such as sports, events, travel and hospitality were inevitably the ones that had to take some hits, other industries that Switzerland is well known for – banking and finance, life sciences, technology – were quickly back to thriving again.
‘Over the last 12 months, we see a very strong M&A market which exceeds pre-Covid activity levels,’ says Calame. His firm was recently involved in a series of large-cap M&A transactions, often in the life sciences area. One of the highlights was representing Roche in the purchase of Novartis’ stake in Roche in late 2021.
Thanks to its diversified market, Switzerland is an attractive place to look for opportunities for a variety of private equity funds. Lately, particularly attractive targets have been Swiss small-to-medium enterprises in the industrial, TMT and consumer goods sectors, and the majority of investors are from Europe. Switzerland’s traditionally flourishing start-up scene also survived the pandemic without a hit. In 2019 and 2020, investment into Swiss start-ups totalled just over CHF2bn (€1.92bn) on an annual basis for the first time. By July 2021, this amount had already been raised. The high activity in this space is only enhanced by Switzerland ranking number one in the Global Innovation Index, a spot it held for more than ten years.
As Switzerland is a federalist state with 26 cantons as member states, the cantons are responsible for organising the cantonal courts themselves. When halfway through 2020 the power to decide the measures to counter the pandemic was largely handed back to the cantons, one of the main challenges was the discrepancy of restrictions and approaches. This has put the focus even more on Justitia 4.0, a project to digitalise the country’s entire justice system by 2026. Its main goal is to develop an exchange platform for electronic legal communications and electronic court files. It is evident that authorities, law firms and businesses alike are taking the Covid-pandemic as a learning experience to be better prepared should another comparable crisis happen.
While digitalisation of the legal profession has been fast-tracked in the last couple years in Switzerland, another topic that has been around for some time also received renewed attention: ESG (environmental, social and corporate governance). With companies, investors and consumers all emphasising the importance of ESG best practice, law firms have witnessed a wave of interest from clients on how best to integrate this into their businesses.
Apart from a few exceptions, the Swiss market is traditionally dominated by independent full-service law firms and boutiques. Calame says: ‘Independent firms in Switzerland typically possess a strong base of local clients with international operations. This gives them to some extent direct access to global markets without having to rely on cross-border networks to generate business.’
There is little sign of anything on the horizon to upset the status quo for law firms dominating the Swiss legal market. Not even Covid. And given the success enjoyed by a flourishing independent legal market thus far, why would disruption be welcome? LB
| Rank (by L500 ranking) | Firm | Region | Total lawyers | Total partners | Promotions | Offices | Partner hires |
|---|---|---|---|---|---|---|---|
| 21 | Lenz & Staehelin | Switzerland | 200 | 48 | 4 | 3 | |
| 24 | Bär & Karrer | Switzerland | 169 | 49 | 4 | 4 | |
| 30 | Schellenberg Wittmer | Switzerland | 168 | 45 | 2 | 3 | 1 |
| 32 | Homburger | Switzerland | 165 | 39 | 1 | 1 | |
| 33 | Niederer Kraft Frey | Switzerland | 104 | 36 | 2 | 1 | 1 |
| 38 | Pestalozzi | Switzerland | 78 | 29 | 2 | 1 | |
| 48 | Walder Wyss | Switzerland | 220 | 68 | 2 | 6 | |
| 74 | MLL Meyerlustenberger Lachenal Froriep | Switzerland | 155 | 50 | 3 | 6 |