25 October 2010
Hannes Snellman seems to have hit the ground running with its new Danish office, but many in the market think there will be tougher times ahead. By James Swift
The International Bar Association’s annual conference was in Vancouver this year, and the chief talking point among the Nordic lawyers gathered there was Hannes Snellman.
In September the Finnish outfit announced that, as part of its quest to become the first pan-Nordic firm, it was launching in Copenhagen.
“I know it’s a cliché, but it’s a long time since I’ve heard so many people use the term no-brainer,” says the firm’s managing partner Carl-Henrik Wallin.
But while some may only be asking them what took so long, others are not convinced about the firm’s latest venture. And with Denmark taking longer to recover from the downturn than its Nordic neighbours and Copenhagen’s dominant firms consolidating their positions, success is no sure thing.
According to Wallin, Hannes Snellman’s senior partners have been considering more Nordic offices for the past five years, but it was only in the past three, spurred on by trends they saw in their clients’ approach to the region, that they got serious.
“The bankers and the people we see in transactions began organising themselves on a Nordic level and we asked ourselves if we were really that different,” says Wallin. “Also, the referral work from other firms in Sweden had started to dry up. The traditional reasons for not doing it just weren’t there anymore.”
The start of something big
The firm’s expansion began in 2008 when it opened in Stockholm with six partners taken from Linklaters, Setterwalls and Vinge. By all accounts this office has been a great success. It has grown to more than 60 lawyers and is recognised by competitors as top-tier.
The firm’s Denmark launch was only slightly less auspicious. The firm poached three corporate partners - Philip Risbjørn, Mikkel Baaring Lerche and Nikolaj Bjørnholm - from Bech-Bruun, which with a turnover of e69m (£60.3m) is the largest firm in Denmark, according to The Lawyer’s European 100.
Risbjørn heads the office; the other two partners have yet to work out their leaving terms, but are expected to join him soon. Also joining the office is Mathias Lindqvist, who relocated from Hannes Snellman’s Helsinki office, and Amanda Tonsgaard, previously a director at private equity manager Capital Dynamics in London.
“I decided to leave at the end of last year and have been working with Hannes Snellman ever since,” says Risbjørn. “The firm’s pan-Nordic strategy and business model was appealing to me and I was looking for a different way of practising in a law firm. Hannes Snellman catered for that with a clear strategy, a strong business model and an international approach.”
The office, which Risbjørn intends to stock with around 50 lawyers over the next three years, handles transactions (M&A, capital markets, finance, tax, competition, IP, IT and employment law) and conflict work (international arbitration and litigation). The latter is expected to make up 10-15 per cent of the office’s revenue.
Bringing home the bacon
But, unlike with the firm’s Stockholm launch, which seemed like a natural progression for the firm, Hannes Snellman’s entry into Denmark has provoked scepticism from competitors. Nobody disputes that the firm has done well landing three Bech-Bruun partners (what that means for Bech-Bruun is also the subject of speculation in Denmark), but there is doubt as to whether clients - particularly Danish clients - are really crying out for a pan-Nordic firm.
“I understand why [Hannes Snellman] went into Stockholm, because of the historical and language links, but I fail to see why they’d open in Copenhagen,” says Bruun & Hjejle managing partner Christian Schow Madsen. “Of course we welcome competition, but I don’t think it will lead to success because I don’t think many companies will buy into this strategy - a big name in Sweden or Finland isn’t a big name here, and the market’s quite small.”
“[Clients wanting a one-stop shop],” adds Accura senior partner Kåre Stolt, “may have been the case 10 years ago, but now the clients we have are quite sophisticated and know the people in Denmark and Norway they want to work with. [Clients] don’t simply think that because people are good in Norway they’ll be good in Denmark.”
On top of this, trade flows between Sweden and Finland on the one hand and Finland and Denmark on the other have historically been limited, but Wallin is confident that the reality is different.
“Our initial calculations on dealflow pointed to everything going through Stockholm,” says Wallin. “But what we’ve seen, which is surprising, is that we’ve had a lot of work that’s Denmark-related but comes through Finland.”
The big fights
Hannes Snellman’s toughest challenge, however, will be competing against Copenhagen’s top firms. These firms have had decades to consolidate their positions and Wallin and Risbjørn both admit that, even if referral work is forthcoming, they will still have to win work locally to succeed.
“It will be a challenge for them,” says Gorrissen Federspiel managing partner Peter Appel. “It’s a small jurisdiction and the people here are well-connected. Also, while you have the large law firms such as us, Plesner, Bech-Bruun and Kromann Reumert, you also have a second tier, where there are some brilliant firms, such as Accura and Bruun & Hjejle.”
But Hannes Snellman has had early encouragement. Luring three Bech-Bruun partners was a coup in itself, and within the first week of the Copenhagen office opening the firm landed a role advising a bidder on the auction of Nordic software company Visma (owned by HgCapital), which eventually sold for e1.4bn to KKR.
Even if the firm’s Copenhagen launch has a few more doubters than Stockholm did, Hannes Snellman’s partners are not worried. As long as the firm can keep attracting top-tier partners and winning mandates, the issues surrounding its strategy will be moot. And anyway, there is an Oslo office to start thinking about.