Jones Day plans to open in Amsterdam, but is there room in the market for another US firm in the Netherlands?
After several years of Dutch lawyers calmly accepting that little would change in their market, this year something changed. Just over a month ago US firm Jones Day announced it was adding to an already extensive European network with an office in Amsterdam.
The firm is now busy recruiting to meet its ambition, but Dutch independents believe Jones Day will not be the last US arrival.
The US has always been an important investment partner for the Netherlands and investment between the two countries has remained fairly strong throughout the financial crisis.
“We expect a few more American firms that play in a similar league to Jones Day to open in Amsterdam,” predicts De Brauw Blackstone Westbroek managing partner Martijn Snoep. “They see a reasonable stream of referral work to a couple of Dutch firms and seem to think that is sufficient to justify having an office in Amsterdam.”
But Stibbe managing partner Heleen Kersten does not share the view that many more US firms will come.
“We work a lot with US firms through their London offices,” she says. “People are talking about it, but I don’t expect a big move of US firms into the Netherlands.”
Nauta Dutilh managing partner Michaela Ulrici agrees with Kersten that a sudden influx of US firms into Amsterdam is unlikely, although she says US work continues.
“We see some transactions from the US and we also see an increase in work from US firms,” she says. “There is also increased contact between US firms, our Dutch offices and our London office.”
While some Dutch firms question whether there is a real business case for the sort of US firms that have chosen to set up shop in the Netherlands, they believe there is room in the market.
“We rarely come across them in the area where we operate, so I think it’s good,” says Houthoff Buruma managing partner Johan Rijlaarsdam. “It might even help in the sophistication of the market.”
Spirit of independence
Jones Day and any US firms that follow it will find the Netherlands challenging. The top independent firms are arguably more independent than ever, especially following the break-up between Stibbe and UK best friend Herbert Smith.
They all appear to have had a reasonably solid year. At Houthoff, Rijlaarsdam predicts something of a bounceback from a disappointing 2011, when the firm recorded a 3.3 per cent drop in turnover.
“It started off quite slowly, but we’re 10 months into the year now and at this moment we’re doing really well,” he says.
Kersten too reports a good year, with instructions on IPOs and some major acquisitions involving the US and South America.
“Traditionally, there’s always been quite a lot of cross-border work between the US and the Netherlands,” Kersten confirms.
Snoep says M&A work is doing well, mainly on the outbound front.
“We’re doing well – we’re well above last year and generally across the board,” he says, pointing in particular to Dutch outbound work to South America and South East Asia.
De Brauw’s Singapore office, opened in the summer, got off to a “flying start”, according to Snoep.
Others are less enthusiastic about 2012. Loyens & Loeff managing partner Maarten van der Weijden says the year has been fairly flat, mainly due to sluggish M&A and other transactional work.
“Regular client work is going fine, but if you miss the transactional part that makes for a flat year – not a bad year, but not a spectacular one,” van der Weijden says.
At Nauta Dutilh, Ulrici also reports a stable year, with a pick-up in recent months.
Van der Weijden says there have been fewer high-profile transactions than a year ago and the mid-market is struggling too.
“It seems that, whereas in previous years mid-sized transactions were going along as usual, in that segment the volume of work is now falling,” van der Weijden adds.
Lawyers say client service is becoming increasingly significant.
“The flexibility we bring to our clients is important,” says Ulrici.
Overall, Dutch firms see the outlook as fairly solid.
“I won’t say it’s shaping up to be a glorious future, but at the same time there’s definitely an appetite among both private equity and strategic investors to acquire other companies or to divest,” Kersten concludes.
Key figures: Netherlands
GDP (2011): $836.3bn
Annual inflation (Sept 2012): 2.3%
Population (Oct 2012): 16.8m
Life expectancy at birth: 81
Unemployment rate (Q3 2012): 6.4%
Source: World Bank, Statistics Netherlands