TOP 100 Law firms the global market
"the Swiss legal market is well-covered by
domestic law firms"
Daniel Daeniker
Managing partner,
homburger
Frank Gerhard
Partner, homburger
"Banks regulation
will bring law firms
more work on regulatory and compliance"
Leaders League. Switzerland’s legal market is unique in Europe due to the few number of international law firms. How do
you perceive this situation?
Daniel Daeniker. You are right; there are
a few international law firms or networks
operating in Switzerland. We see two
main reasons. First of all, Switzerland is
a mid-sized market. Switzerland’s situation is close to the one happening in the
Nordic countries. The volume of M&A activity is contained and there are no signs
that it will explode in the near future. At
the same time, the Swiss legal market is
well-covered by domestic law firms providing high quality work. International law
firms are generally serving their clients
through a local partner to carry out their
business in Switzerland but independent
firms forged a better connection with companies, governments or regulators through
their day-to-day contacts. International
law firms cannot therefore be considered
as competitors.
Leaders League. Homburger was associated with Baker & McKenzie. Why did
you choose to leave the alliance?
D. D. I have started my career with Homburger when it was part of Baker & Mckenzie
alliance. In 1991, 8 out of 12 partners decided to quit the alliance and get back to the
original independent roots of Homburger.
The main reason was that the key strength of
the alliance—serving mid-size international
clients—did not work in the world's major
financial centers. Today we are serving our
clients both on a domestic and international
scale. For international matters, since we are
not involved in any network or alliance, we
remain free to choose which leaves us free to
decided and choose the most suitable advisors for a specific case.
Leaders League. Switzerland is preparing the end of banking secrecy for 2018.
How will it affect the attractiveness of the
country?
Frank Gerhard. For a country like Switzerland which is one of the most developed
banking centers around the world, the end
of the banking secrecy is a tough time. Since
4 2015 international report & directory series I Leadersleague
2008 banks have continuously been facing
new regulations and this will not end in the
near future. By 2020 the banking landscape
will be totally reshaped. The rise of regulations also comes with a more important
pressure on banks’ margins which will automatically lead to concentration in the sector,
especially in private banking. This is already
ongoing, but one can expect that once the
DoJ program is closed, this trend will even
accelerate. This will certainly bring to law
firms some domestic or cross-border deals.
By 2018, banks will also face new regulations with Basel III. This in turn, will bring
law firms more work on regulatory, compliance or even financing matters for their
clients. However, transparency and tax compliance of assets is a worldwide trend, so we
believe that in the long run Swiss banks will
get stronger after this catharsis.
Leaders League. There are two major
financial centers in Switzerland: Zürich
& Geneva, somehow competing each
against other. Where should an international investor choose to sit?
F. G. The Swiss landscape is divided in several areas: Zürich first, which is the economic capital of the country with great incentive for international clients to land here:
capital markets, financing and of course
investors. Some other regions also have
some assets like Geneva that has a strong
historical international position for private
banking, and also has attracted investors
operating in commodity trading, due essentially to tax optimization possibilities. Further, the Geneva region has a strong portfolio of start-up companies due to the
presence of major institutions of higher
education. However, the entry into force of
the Corporate Tax Reform III (by 2019) will
make certain tax regime disappear, which
might affect namely commodity traders in
Geneva. It will still be an interesting place
for Private Banks and attract some wealth,
especially from middle-eastern countries.
Last but not least, Basel is also attractive for
technology or life sciences companies.
There they can enjoy an innovative ecosystem helping large companies (Roche and
Novartis HQ is in Basel area) to start-ups.