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In a usually quiet legal market a spate of mergers has shaken things up and created a brand-new mid-tier competitor. Tom Phillips reports
One of Denmark’s many attributes is that things move slowly - and the legal market is no different. Apart from the occasional lateral partner move or small team defecting to a rival, not much happens to change the status quo of the ‘big four’ of Kromann Reumert, Plesner, Bech-Bruun and Gorrissen Federspiel.
These firms have kept a strong hold on the Danish market for nearly a decade, with the small but mature legal market unable to sustain more entrants. However, in January this year the battle for the fifth and sixth spots suddenly became interesting.
Danish law firms Jonas Bruun and Hjejle Gersted Mogensen merged to become Bruun & Hjejle, pitching itself opposite Lett Law Firm in the mid-market.
Ten months on and the combined entity is realising its ambition to pick up the big transactions. By lawyer numbers, Lett is the third-largest firm in the country, with 165 lawyers spread across a broader practice (the firm has significant offices in Aarhus and Kolding, as well as its Copenhagen base), but Bruun & Hjejle has made a good thrust into Lett’s space with a combined size of 84 lawyers, all of whom will move into a new 8,200sq m head office in the well-known TDC House in Copenhagen in June next year.
If you speak to lawyers in the Danish capital, the story behind the Bruun & Hjejle merger is a one of a marriage made in heaven.
“One of the comments we received most from our clients was ‘at last’,” says Bruun & Hjejle managing partner Christian Schow Madsen. Both firms had strong litigation practices, which means the new Bruun & Hjejle has became a powerful player in that area. Jonas Bruun was recognised for its energy and real estate practice, an area where Hjejle was weaker. Overall, the merger has improved the strength of both firms.
Recently, this newfound strength in numbers came into play, with the firm winning the instruction for SEB Enskilda Corporate Finance, acting as sole lead manager in connection with the Nasdaq listing of shares in Danish airline Cimber Sterling Group. It was the first major IPO in Denmark for at least two years - a coup for the firm and an instruction that neither firm may have won as separate entities.
“Some of the investment banks that were very important to our business said that, prior to the merger, we didn’t have the size to handle the big deals,” says Schow Madsen, who came from the Hjejle side of the merger. “But now we’re among the firms who are considered in the first round of the tender process. We had the same clients, attracted the same lawyers and the way we work is very much alike. The size we have now will enable us to handle any case in the Danish market.”
The perception among the firm’s rival Lett is equally as honest. Torkil Høg, a corporate partner at Lett, says the merger has produced a challenger to Lett’s position.
“They were both good law firms, but they were struggling on big transactions. When the market turns again I think we’ll be seeing a lot more of them,” Høg confirms.
This year also saw two other mergers, although smaller in size. Delacour Dania was formed from the merger of Delacour and Dania Law in January, while this month Scandinavian and Baltic firm MAQS merged with SMA.
The new-look MAQS now has offices across the entire region, with its Copenhagen base remaining the largest. With offices in Denmark, Sweden, Estonia, Lithuania, Latvia and a representative office in Poland, MAQS has an unusually international and cross-border strategy.
The region’s countries still operate very different legal systems with a wide variety of languages, so the merger with SMA, which had 15 lawyers in Lithuania and 10 in Latvia, stands out.
Managing partner of MAQS’s 50-lawyer Copenhagen office Jeppe Brogaard Clausen says the tie-up fulfils the firm’s long-held ambition to become fully regional.
“The idea was to build up a regional firm in scandinavia and the Baltics. SMA means our strategy to have offices in all three Baltic states is fulfilled,” Brogaard Clausen explains.
The firm is hoping to capitalise on the ongoing investment from Sweden into Estonia and Denmark into Latvia and Lithuania. In its effort to move away from the old, pre-EU legal market, the modern approach of SMA’s lawyers attracted MAQS to the deal.
“There are a lot of older lawyers in the region, but SMA are young and have an international approach. All the firms in this region are being affected by the financial crisis and we need to get out of this black hole,” says Brogaard Clausen. “Our new colleagues from the Baltic states are very optimistic and it’s a real pleasure working with them.”