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Overview
The previously stable Danish economy experienced meltdown in 2008, starting with bankTrelleborg’s crisis merger with Sydbank in January and the failure of Roskilde Bank in March. This was followed by a series of collapses of banks and businesses, notably Sterling Airlines and real estate developers CenterPlan and Griffin.
The financial crisis transformed the legal sector. The M&A boom has been replaced by an explosion in restructuring and insolvency. M&A lawyers are handling distressed deals as businesses are forced to sell their assets. Mass dismissals due to bankruptcies, closures and crisis mergers are all providing work for employment lawyers. Litigators are busier than ever. However, the slow down in private equity and project work has caused concern that there may be a lean period when emergency restructuring slows down, depending on how long it takes for the financial markets to recover.
The Big Four firms – Kromann Reumert, Bech-Bruun, Plesner and Gorrissen Federspiel Kierkegaard– dominate the market. The financial crisis has provided steady work for top banking and finance firms, notably Gorrissen Federspiel Kierkegaard, where Michael Steen Jensen represents Nationalbanken (the Danish Central Bank). Although many lawyers are switching from M&A to insolvency work, the collapse of the private equity market and falling property prices are creating investment opportunities. A steady flow of commercial and industrial deals, as well as reorganisational and restructuring work, supports transactional firms such as Accura Advokataktieselskab and Rønne & Lundgren. However, these are significantly smaller than last year’s big-ticket M&A deals, so the focus is on deal volume rather than size. Lett Law Firm and Horten are bolstered by their traditional strength in regional and public sector work.
Size is a significant factor in Denmark’s increasingly competitive market. Kromann Reumert recruited 63 new lawyers and maintains an excellent reputation for providing high-quality service across all practice areas. Lett Law Firm, supported by its regional strength and industrial client base, comprises 190 fee earners, making it the third largest firm in Denmark. In January 2009, traditional full-service firms Jonas Bruun and Hjejle Gersted Mogensen merged to form Bruun & Hjejle. The new firm comprises 88 lawyers and has the potential to provide genuine competition to the Big Four.
Defections from the Big Four continue apace. The most talked about in 2008 was that of Dan Moalem, former head of M&A and capital markets at Lett Law Firm, who established Moalem Weitemeyer Bendtsen in September 2008.
Bech-Bruun continues to lose fee-earners and there have been high-profile reports of conflicts irregularities. However, it remains a key player, participating in most of 2008’s big-ticket deals.
Rønne & Lundgren increased its profile in M&A, insolvency and real estate, notwithstanding the defection of managing partner, Hans Christian Pape, to Horten.
For many clients, the main difference between the Big Four and the second tier is that larger firms have the capacity to handle several transactions simultaneously, while offering a fast, round-the-clock service. The benefits of instructing a high-quality, mid-size firm - apart from cost and agility - is a personalised service with ready access to senior partners. This is significant because the bulk of transactions fall into the mid-market category.
Eversheds Advokataktieselskab is the only foreign firm operating directly out of Copenhagen and continues to expand, supported by Eversheds LLP’s international network.
Poul Schmith Law Firm, the Kammeradvokaten (legal adviser to the Danish State), is commended for its skills in all practice areas. Its workload increased significantly with the rise in insolvencies.
All the Big Four except Plesner have offices in Aarhus in Jutland, Denmark’s industrial heartland, which is less vulnerable to the financial crisis; however, major deals are handled in Copenhagen. Leading Aarhus firms, such as Abel & Skovgård Larsen Advokatfirma and Delacour Dania– formed by the merger between Delacour and Dania Law Firm in January 2009 – also maintain offices in Copenhagen.
Lett Law Firm has offices in Copenhagen, Aarhus and Kolding, close to the German border. DAHL Advokatfirma has offices in Copenhagen, Aalborg, Esbjerg, Herning, and Viborg. Focus Advokater (LLP) is based in Odense, with branches in Copenhagen and Hamburg.