With the New Year came a new name to the Danish legal scene: Plesner & Gronborg, the issue of a marriage between Copenhagen firms Koch-Nielsen & Gronborg and Plesner & Lunoe.
A prime motivation behind the move was to entrench the firm in the country's top league of practices. “We felt a number of foreign clients and law firms viewed size as a decisive factor when they were looking for a law firm in Denmark,” comments partner Finn Lerno. This was crucial in a legal community where international work can represent as much as 35 per cent of workload.
However, the gap between some of the market leaders and the rest was widening. Two firms which were pulling away were B Helmer Nielsen, which had recently swallowed up its rival Dragsted, and Gorrissen & Fedspiel, which merged with Kierkegaard & Mallbye.
This gap triggered the latest merger talks, claims Lerno. “Due to the mergers in Copenhagen, Koch-Nielsen found itself in seventh or eighth place – so did Plesner & Lunoe,” he explains. Merger was seen as the best way of consolidating market position.
So will other firms now take the plunge? Kromann & Munter's Jorgen Madsen warns against seeing the move as the signal that a second wave of mergers is on the way, as middle-tier firms attempt to catch their larger rivals.
There are still plenty of firms which continue to resist the temptation to merge. Reumert & Co, a well-regarded Copenhagen firm with a strong shipping and finance practice, has 40 lawyers. While it has not ruled out merger in the right circumstances, it is keen to stress that growth over the years has happened organically. “We don't believe you should merge merely to gain in size,” says London resident partner Thomas Albrechtsen.
Some also argue that the mergers of recent years need to be seen in context. In relation to B Helmer Nielsen and Dragsted, it was thought the latter needed a facelift. A number of lawyers had left the firm while one of its partners had been embroiled in a court case.
As for the move by Gorrissens, Kierkegaard was a much smaller firm with strong insolvency and banking expertise. The acquisition was in line with the growth strategy of most of the large firms, which over the last five years have used lateral hires of lawyers with specific skills or picked off smaller practices to serve particular strategic objectives.
Some believe that the Plesner & Gronborg merger needs to be viewed in light of the fact that a number of Koch-Nielsen lawyers were looking to move to other firms, most notably two partners who had signed up with Pontippidan Phillip & Partners, a well-regarded commercial practice.
In the event, four Koch-Nielsen partners did not make the move over to Plesner & Gronborg, although Lerno stresses that only two of these were directly related to the merger talks.
Norway And Denmark
Norway and Finland look like seas of tranquillity next to the relatively turbulent legal scenes in Sweden and Denmark. But the EU has caused considerable change.
Two years ago, for example, Norwegians voted against joining the EU – but the country's laws remain intimately linked to developments in the EU thanks to its membership of the European Economic Area.
According to Christine Rodsaether, resident partner at the London office of Wikborg Rein & Co, this means that, although Norway is outside the EU, regimes in sensitive areas, such as fishing and agriculture, have had to gradually conform to many EU laws.
These changes have been reflected in the ways law firms have evolved. Terje Sommer, resident partner at the London office of Bugge Arentz-Hansen & Rasmussen, says his firm had to set up a European department to deal with the new laws coming from Brussels.
To keep pace, firms have had to grow, although most has been organic. Bugge, for example, brought in Sommer, previously general counsel at a Norwegian bank, to bolster its practice.
The country has, however, not been immune from the merger bug. Most of the large firms, such as Thomessen Krefting Greve Lund, Wiersholm Mellbye & Bech and Wikborg Rein came into being during the merger wave which swept Norway five years ago.
A merger-free zone, Finland seems happy sitting on the sidelines of European practice, but it, too, has had to adjust as the business environment has liberalised. “The fact that Finland joined the EU has increased the number of investors in Finland,” notes Roschier-Holmberg & Waselius partner Christian Wik.
To keep up with such developments, the best-known commercial firms, which include Roschier-Holmberg, Hannes Snellman, Heiki Haapaniemi and Castren Snellman, have grown over the last six years into sizeable partnerships and adopted departmental structures.