Dig the new Swede
23 November 2009 | By James Swift
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The Swedish legal market has become a hotbed of change as lawyers switch firms and gain the confidence to launch spin-offs. By James Swift
For a country that is home to the Volvo, ‘dynamic’ is a conspicuous choice of word. But the Swedish legal market has become just that. Partners are switching firms more than ever, spin-offs are increasing and in the past year there have been two significant mergers.
“The Swedish legal market used to be extremely stable and lateral hires very rare,” says Michael Wigge, managing partner at Vinge in Stockholm. “We first saw movement in terms of partners four or five years ago and that’s now increased, and the marketplace has changed in terms of players. We have international firms that have entered the market and this has increased the ability [of lawyers] to move.”
Finnish firms Roschier and Hannes Snellman’s entrance into Sweden in 2005 and 2008 respectively has been a catalyst for change. Their success has opened up the market to competition, giving lawyers more options - an attractive prospect to the younger, more restless generation.
“The willingness to move between firms is greater among young partners and the climate and acceptance for it is much more today than it was,” says Wigge. “Before, you’d start at a law firm and left when you collected your pension.”
“It’s true,” confirms Staffan Eklöw, managing partner at Lindahl. “And it doesn’t just apply to partners either - this generation is much more likely to move from firms to in-house jobs, as well as from firm to firm.
“I think there’s an increase in moves to in-house jobs because making partner in bigger firms is increasingly difficult, and there are very good senior associates who won’t necessarily make partner, and they need to go somewhere.”
Another form of defection that has found favour is the spin-off. Since September lawyers from both Cederquist and Bird & Bird have left to set up niche practices.
“I think it’s a trend with niche firms [opening up] in various areas, but in particular with the dispute resolution field because it’s more sensitive to conflicts of interest,” says Fredrik Norburg, who opened litigation boutique Norburg Advokatbyrå earlier this month (The Lawyer, 9 November).
More than most jurisdictions, Sweden has a problem with conflicts due to tough bar regulations and the country’s ‘big fish, small pond’ dynamic.
“If you look at Clifford Chance in London,” says Mannheimer Swartling partner Adam Green, “their size in comparison with the legal market isn’t as big a market share as our firm has in Stockholm.
Although some see sense in a niche practice, the largest firms in Stockholm are expanding to reduce conflicts and buffer themselves against the droughts affecting corporate practices.
“You have a small but intense market in Sweden and with big firms there’s a lot of conflict, plus the downturn’s created a bumpy transaction market,” says Wigge. “So we’re widening our remit. We have the largest litigation department and are focusing more on regulatory and environmental law.”
Other firms are going further than just adding a few practices and are merging to become full-service. Lindahl merged with RydinCarlsten in February and Albihns with Zacco in June.
Linklaters, however, continues to flout the trend. Since it merged with Lagerlof & Leman in 2000 the firm has gone from 35 partners to 12, which has contributed to a sizeable chunk of the market’s lateral moves.
“We’re focusing on working with major corporates and financial institutions,” explains Linklaters Stockholm managing partner Per Nyberg. “For a firm like ours, in a smaller market being a large firm isn’t really appropriate.”
Despite Linklaters’ decline in numbers, lawyers agree that the office maintains its high quality, dealflow and profitability. But a question mark still hangs over the practice.
“They’ve recently lost some of their most important partners,” says Hannes Snellman Stockholm managing partner Fredrik von Baumgarten. “People are questioning whether they’ll still be here in five or six years, and that puts younger lawyers off.”
Fortunately it looks as if young lawyers will have lots of options as Sweden continues to grow. The next trend, according to some, will be mid-market firm mergers, spurred on by the desire to streamline or compete with the dominant Nordic behemoths.
“It would be a prudent move for mid-market firms,” posits Eklöw. “It’s difficult to make good mergers, but I expect that we would see some.”