There is no doubt that the hottest topic of conversation in Amsterdam at the moment among the major commercial Dutch firms is the turmoil being caused by UK law firms. Their entry into the market has caused the splits of the largest firms here, with Loeff Claeys Verbeke going in part to Allen & Overy and another part entering into a merger with Loyens & Volkmaars.

And in the past week we have seen Trenité Van Doorne deciding to split up in anticipation of merger talks with other UK firms. It obviously believes that by separating the Amsterdam and Rotterdam offices, one or both of them will be more attractive to a top UK firm looking for marriage. Most recently, the managing board of Nauta decided to resign as a result of differences of opinion on how to tailor the firm to the way that UK firms operate. As a concurrent theme we have also seen a lot of movement by partners from Dutch firms to the outlets of UK firms such as Freshfields.

All this activity has come as a shock to the system for the Dutch market, which has enjoyed a very comfortable situation for many years. The commercial firms had plenty of work at a stable level and partners used to stay where they were. But when Allen & Overy and Freshfields moved in last year, suddenly everyone got itchy feet. Additionally, the big five accountancy firms are also moving into the market very quickly.

While this is not exactly groundbreaking news for UK lawyers, for The Netherlands it has been on the agenda for only the last year. The new situation has caused a lot of concern, particularly among those firms which serve the medium-sized clients, because that is where most of the competition from the accountancy-linked law firms lies.

It is quite likely that many full-service medium-sized firms will find themselves squeezed out of the market if they fail to develop their own particular niches – either that or they will be swallowed up by UK, and perhaps US, firms.

Kennedy Van der Laan is a niche practice which at the moment has had to impose a client stop in certain sectors – it is simply unable to cope with the fast-increasing workload from existing clients without taking on any more lawyers. The lack of US interest in The Netherlands market comes as a bit of a surprise, as the US firms do not seem to be reacting to what the UK firms are doing. US firms seem to be more interested in what is going on in Germany than in the Dutch, French or Spanish markets. But many large multinational corporations, when they are moving into Europe, tend to select London and Amsterdam as bases for their headquarters.

In a way, the lack of US interest comes as a relief to the Dutch market because it saves additional pressure on an already stressed market. Also, the leap between the UK profits per partner and Dutch profits per partner are already large enough without having to contend with the perhaps even greater step up that would be needed by a Dutch firm looking to merge with a US firm. The Dutch market’s fees do not come into the same margin as UK firms. Only the very top corporate lawyers can increase their fees to such an extent; no other area of the market would take it. Even the very top labour lawyer or litigation partner cannot charge the same level of fees as do UK firms.

Having said that, until a year ago the fees chargeable in corporate and M&A work had hovered for a while around the Fl600-700-per-hour mark (£160-180). But suddenly Freshfields moved in, charging, it is said, Fl1,200 (£315) and Allen & Overy followed suit. While Dutch firms have raised their fees a little, they are not putting them up to the level of the UK firms, because even the largest Dutch client such as Philips will not agree to a 100 per cent increase.

Whether Dutch clients are willing to pay that much for UK firms remains to be seen, but it may be that London-based partners for the likes of Freshfields and Allen & Overy have to accept that the price they have to pay for having an international network is lower profits per partner.

Coen Drion is a partner at Kennedy Van der Laan.