Finnish firm Borenius marked a significant moment in its history on 8 June. A cocktail reception took place in the heart of the City in the Tapestry Room & South-West Terrace of The Ned to formally launch the firm’s London representative office. The guestlist included names from major US and UK law firms, private equity dealmakers and investment banking leaders, as Borenius sought to position itself as the go-to firm in Finland to facilitate work for these clients. The quirk of this event, however, was that this was all supposed to happen 27 months ago.
The Covid-19 pandemic delayed Borenius’s plans to open its doors in London after the ink dried on its lease in January 2020, with invitations to its first opening party sent out just as the world started locking down two months later.
With the worst of the pandemic now hopefully in the past, Borenius hopes that now is the time to make a real success of its representative office set up. And in a way, perhaps it is more apt that this opening should take place in 2022. After all, this year marks a decade since Borenius embarked on its first foray into the international market, having first tested the waters with a representative office in 2012 with a space in downtown Manhattan (US).
But an office opening doesn’t just happen out of nowhere. In about 2010, Borenius was looking into how best to grow its business. When benchmarking against the prestigious Finnish competitors Hannes Snellman and Roschier, a couple of things became painfully apparent: both of those firms had already made great strides into neighbouring Sweden and had embedded themselves deeply with corporates in Stockholm. Borenius’s management at the time decided a move into its westerly neighbour would not be right for them – their eyes were set on a much bigger prize.
Landing in downtown
From all of the jurisdictions that could have possibly been chosen, Borenius decided that New York made the most sense to launch an office.
New York is the world’s richest legal market. It is a ruthless city to build a practice, but the rewards are as high as the risks. The macroeconomic picture of the time showed green shoots of recovery poking through the dirt of the financial crisis of 2007-2008, as interest rates were at the start of a decade-long low. Private equity money was ready to be deployed and the major US firms such as Cleary Gottlieb Steen & Hamilton, Weil Gotshal & Manges and Shearman & Sterling were always on hand to answer the phone.
Borenius knew that picking up the lead mandates on global mega deals was an impossibility. Trying to pursue these would have been pointless, but what if it could play matchmaker for the US firms looking to do business in Finland? It was then decided that being close to the famed white shoe firms and Wall Street dealmakers was imperative. And so, in 2012, Borenius opened its doors in downtown Manhattan.
While the New York representative office was opened with the best intentions, there was just one, tiny problem: Borenius’s partnership at the time didn’t have any partners with US qualifications or who had spent a significant time in New York. They didn’t truly grasp the city’s culture. For two years the representative office was open without anyone staffing it who could speak to New York lawyers in a business language they could understand … until the arrival of Juha Koponen.
Koponen started his career at Dittmar & Indrenius, a small Finnish outfit, in late 1998 as a corporate/M&A associate. In 2001, he joined US firm Fried Frank Harris Shriver & Jacobson, where he spent time between the New York and London offices. He spent three years at Fried Frank, focusing on US capital markets and leveraged finance, gaining experience of how a US firm thinks. His career then comprised stints in-house at Finland’s best known tech business Nokia, a return to Dittmar & Indrenius, before joining Castren & Snellman as a partner in 2009.
When he arrived as a partner into the capital markets team at Borenius, Koponen felt the location of the original downtown office was hindering the firm’s ability to meet with the real New York dealmakers. As the partner-in-charge of the representative office network, Koponen decided to scout for new premises in midtown to be closer to the big beasts of New York’s legal scene. It took two years to find the right space before eventually deciding that the 13th floor of 350 Park Drive would be the ideal spot. Borenius has been on the move again in New York, relocating in July from Park Drive to the Rockefeller Centre, in what it hopes will be its long-term home.
Entering Borenius’s New York office is not like entering a normal law firm’s place of business. Indeed, calling it an office is probably not quite right. It is more of an event space with breakout areas for working in than a traditional, or even contemporary, law firm office. A revolving cast of associates work out of the US office, taking it in three-month stints to soak up the business culture, gain exposure to life outside of Finland and build that all-important contact book that the firm needs to ensure its deal flow is consistent.
The New York office was originally conceived with the idea of only ever playing host to this revolving cast, but in 2021 the office gained its first resident associate: corporate/M&A associate Miranna Kuivas. Formerly of Dutch firm De Brauw Blackstone Westbroek, Kuivas has experience of in-house work at Royal Dutch Shell and relocated to New York last year to advise Finnish corporates on how to enter the US and introduce them to the right firms who can make that entry as smooth as possible. The firm has a policy of sending out more senior-level associates on the three-month secondments, which it feels is an effective strategy. NY-qualified capital markets/M&A senior associate Kenneth Kraszewski is the latest of Borenius’s long line of lawyers to take to Manhattan. Kuivas, though, has now found herself central to the firm’s international strategy.
London Calling
By the time the midtown office had opened its doors, Borenius’s topline still lagged someway behind those Finnish firms it had originally benchmarked itself against.
Data from The Lawyer’s annual Euro 100 report recorded that Borenius’s revenue in the 2016 financial year was €37.9m. This left it some way short of Hannes Snellman’s €58.7m and Roschier’s €80.7m totals for that same year.
Despite the smaller revenues, the firm’s underlying metrics told an extraordinary story. The firm’s revenue per lawyer (RPL) in 2016 stood at €288,000 (131.8 full-time equivalent lawyers). This was higher than Hannes Snellman’s RPL (€271,000: 217 FTE lawyers) and just 12.1 per cent less than Roschier’s (€323,000).
So, while the topline growth was slow to develop, Borenius was quietly becoming an efficient and high-value business with Koponen attributing a great deal of that to the referrals gleaned from Manhattan. But Borenius began to notice something else: the US firms were stamping their mark on London as PE houses sought opportunities in Europe with the intention of using London as a launching pad for that capital.
By 2016, The Lawyer’s US Top 50 report found that the 50 largest US firms’ London offices were generating $4.62bn between them. The City offices of Kirkland and Latham led the way, posting $534m and $520m in 2016, respectively. Borenius had made a great virtue of working with both firms in New York, so why not work them in London as well? The City is, of course, home to scores of UK PE houses too with the likes of CVC Capital Partners, Apax Partners and Cinven all calling London home. For a firm with aspirations to be the go-to adviser for inbound PE work to Finland, a London hub was looking increasingly vital.
Despite the flow of US PE money into London ramping up from the mid-2010s onwards, Borenius was cautious about investing in the City. The firm felt that political instability from the Brexit vote in June 2016 and the looming Trump presidency, which was confirmed five months later, made the situation too dicey. It adopted a wait-and-see approach to gauge how the world would pan out. As it was, PE money continued to flow west across the Atlantic. Opportunities were missed in that four-year period, until it was finally decided that a London base was vital for business and geographic reasons.
In a fortuitous twist, some space had opened up in an office close to St Paul’s Cathedral in a building that already had a distinctive Nordic feel. Norwegian firm Thommessen, Danish firm Kromann Reumert and Icelandic firm Logos all share the second floor of Paternoster House. There was empty space sitting there after Swedish firm Vinge decided to pull out of London and so the space that had previously been occupied by the Swedes was taken by the Finns, with the lease signed in January 2020.
The pandemic delayed the office’s opening, and it wasn’t until December 2021 that an associate programme akin to that of New York got going. The key difference between the New York and the London programmes is that associates heading to Paternoster House are much more junior than those sent to Manhattan.
Seven associates selected from the Helsinki headquarters now take it in turns to spend three two-week secondments to London over the course of the 2022 calendar year. It is mooted than the future of the London associate plan will see a smaller number of junior lawyers spend longer periods in the City in order to soak up more of the atmosphere and, more importantly, grow closer ties to the bigger firms. While in London, they work on exclusively inbound Finnish matters and are supported by seven partners whose own rotations are more ad-hoc with the understanding that if their support is required, they’ll fly in.
Those eight partners include:
- Juha Koponen, capital markets and public M&A, head of London and New York representative offices
- Casper Herler, managing partner, natural resources
- Samuli Simojoki, chair, technology transactions and venture capital
- Nella Åström, private equity and M&A
- Markus Kokko, dispute resolution
- Jani Syrjänen, employment
- Niina Nuottimäki, banking & finance
The business mix of the partners flying in and out gives a flavour of the kind of clients Borenius is targeting. An early success for the office’s proof-of-concept came in March 2022, when the firm advised streaming service Netflix on its €65m acquisition of Finnish video game company Next Games. Koponen insists that the mandate would not have come about were it not for the New York and London offices feeding instructions east and back into Helsinki.
Turning referrals into revenue
Working the New York and London referral network is, for now, as far as Borenius is willing to go. There will be no Hong Kong, Singapore or Beijing representative offices, although the firm does have a China-focused desk.
For now, the plan is to turbo-charge local relationships, making sure the associate programme acts as an effective retention tool and turning those referrals into topline growth.
At the time of writing, Borenius says that about 50 per cent of the firm’s revenue is directly attributed to referrals coming in from its international network. It is understood that the firm saw an increase of around €7m between the 2020 and 2021 financial years, growing to around €50m from €43.2m.
The 15.7 per cent increase in a single financial year stands out after several years of unremarkable topline growth. Between 2016 and 2020, the firm’s revenue grew by 14 per cent. The fact that the firm managed to better that five-year percentage growth in a single financial year hardens the evidence in favour of its relationship strategy. Especially when the international referrals accounted for around €25m of that last year’s €50m total.
The key challenge now facing Koponen is to grow this figure. He hopes that international referrals will account for 10 percentage points more now than they currently do, though no timeframe is forthcoming about when this target will be met. Koponen’s ideal breakdown would see the firm operate with a 40/40/20 split in revenue between domestic Finnish work, London referrals and New York referrals.
Significant growth, though, particularly in the markets Borenius has targeted thus far, will be more challenging to come by in the next 10 years of the representative office network than it has been in the last decade.
Soaring interest rates coupled with rapid inflation are already causing concerns for transactional lawyers about future deal flows and the FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks, for so long the indicator of the booming tech sector, have taken a battering in the first half of 2022. Facebook, now known as Meta after a slew of bad publicity lead to a rebranding, saw more than a quarter (26 per cent) wiped off its value in a single day in February. Netflix, a Borenius client, has seen almost three-quarters shaved off its share price, falling more than two-thirds (68.4 per cent) to about $218.10 at the time of writing, from its all-time high of $690.31 in October 2021.
Borenius’s successes thus far have seen a Finnish firm acting on domestic matters become some of the world’s largest firms’ crucial partner for their work in Finland. When guests started arriving at The Ned on 8 June, Koponen and his colleagues will have had every right to celebrate the referral strategy’s success. With harder times looming, international friendships will be at a premium.
