Swedish leaders buck recession as Nordic firms see market slow

Two of Sweden's largest law firms have posted solid growth for 2008, as the Nordic region starts to feel the impact of the economic downturn.

Swedish leader Mannheimer Swartling achieved double-digit growth in turnover last year, jumping by around 12% from SEK1.06bn (£90m) in 2007 to just below SEK1.2bn (£102m) in 2008.

The firm's offices outside Sweden contributed nearly 20% of total revenues, increasing their contribution by around 5% over the last two years.

However, the firm has launched a cost-saving programme in response to the current drop in activity. It has temporarily frozen associate lockstep, preventing associates from moving through the pay bands in January, and has also halved year-end bonuses in 2008 compared to the previous year.

At partner level, monthly drawings were reduced during the last year to create a buffer of capital for 2009. Managing partner Stefan Brocker (pictured) told Legal Week: "Overall, 2008 was a good year, with profits expected to match 2007. 2009 is going to be a tough year in Sweden and abroad. We have taken measures to cut costs in the case of a catastrophe scenario where we would be significantly less busy. It is wise to have a buffer."

Vinge, Sweden's second-largest firm, saw its revenues increase by around 6%, increasing from SEK973m (£83m) in 2007 to a high of SEK1.03bn (£88m) in 2008.

Chief executive Michael Wigge said: "We are pleased with how our results have improved. Contributing factors have been prestigious instructions from the Swedish state and the increased need for capital raisings this year. We have also focused on building our litigation capacity."

In contrast, while rival Finnish firms have continued to increase their market share in Sweden, the country's two leaders have not seen the same increase in revenues.

Hannes Snellman's preliminary estimations saw revenues drop by 7% during 2008, expected to stand at E42.4m (£39.7m) compared to E45.9m (£43m) the previous year. The firm said the decline was partly due to the launch of an office in Stockholm and partly down to a change in accounting system.

Roschier, which has had a base in Stockholm since 2006, works on a financial year that ends 31 May but said it expected to finish the year with revenues static. Revenue for 2007 stood at E53m (£49m).

No Nordic firms have announced lawyer redundancies in the region, however, some international firms have. Link-laters is thought to have made around 10 lawyers redundant in Stockholm, while White & Case is expected to look at cuts in Sweden as part of its global redundancy consultation.

2008 key local deals

• Mannheimer Swartling advised the Swedish Government on the SEK1.5trn (£128bn) bank guarantee scheme, which completed in late 2008, and ongoing bank recapitalisation.
• Vinge advised on the Government's demono-polisation of the Swedish pharmacy system.
• Vinge advised the Swedish Government on the merger of the state-owned Swedish and Danish postal services.
• Roschier acted alongside Clifford Chance on the SEK27.9bn (£2.3bn) deal that saw Volkswagen increase its stake in Swedish lorrymaker Scania. Vinge advised the vendor.