A lot can happen in a short space of time, and Sweden is certainly proof of that. In a country where Volvo, Ikea and H&M gave way to Abba and Zlatan (*not technically true, I grant you) as the country’s most successful exports, that crown looks likely to pass to any one of Sweden’s tech behemoths.
Sweden is a leading market for tech start-ups – Stockholm is well known as a hub for IT companies, while Malmö is the seat of a number of medtech corporations. It wasn’t always this way though and in 2013 The Legal 500’s market overview of the country sounded a rather dour note, reporting that the nation’s official growth forecasts had been downgraded from 2.7% to 1.1%.
Looking back at our coverage from the 2014 guide, we remarked on the lack of successful IPOs in the Swedish market over the previous year, leaving ECM lawyers to despair. Fast-forward to 2016’s guide and we note that the ‘IPO markets roared back in 2015 with several listings on Nasdaq Stockholm and on Nasdaq First’ (cut to images of the same ECM specialists jumping for joy). Indeed, in 2017 there was a record number of IPOs across Sweden’s four exchanges. Although there has been a noticeable drop off in IPO activity in the first half of 2018.
Interestingly, Gernandt & Danielsson Advokatbyrå, Mannheimer Swartling and Advokatfirman Vinge have had a stranglehold on the top tier of our rankings since 2013, when the focus of the editorial coverage shifted from solely considering debt capital markets work to more balanced coverage highlighting firms’ equity and debt expertise. One firm that has stormed up the ranking over the years is Baker & McKenzie Advokatbyrå KB; the firm was ranked in tier four in 2013 but now stands tall in tier two.
Standout transactional deals in the last few years have mainly come from the country’s booming real estate market and TMT sector. Office properties, particularly in Stockholm, continue to be highly prized, with rental returns increasing in value year-on-year. However, the first quarter of 2018 saw a decline in activity – even discounting the stellar year that was 2017 – with transactional volumes below that of even 2015. This is not thought to be a cause for concern, though, with the available assets lagging behind the seemingly insatiable demand on the part of potential purchasers.
In terms of rankings since 2013, Mannheimer Swartling has been an ever present in the top tier; the makeup of the rest of the tier has changed on a couple of occasions over the years. Advokatfirman Vinge was promoted to tier one in 2014, dropped in 2016 and then restored to the top tier in 2017, while Wistrand was a new addition in 2017 – the same trio were also ranked top in 2018. But anyway, back to the tech boom.
Sweden is widely recognised as a powerhouse in the technology arena, with the country home to major global tech brands including payment platform Klarna, music streaming services Spotify and SoundCloud, and King, the maker of the popular Candy Crush mobile game. The country is acknowledged as a hotbed for innovation and has long invested heavily in research and development (R&D), which in turn, has drawn a number of outside investors to the country, keen to cash in on R&D companies. Sweden is also a key name for the biotechnology industry. Of note so far this year was the sale of Swedish fintech company iZettle to US-based PayPal in a major cross-border deal for the online payments sector. Private equity clients continue to be particularly acquisitive in this area, too.In an effort to improve working methods and the service offered to clients, it is also apparent that Sweden’s law firms have been quick to adopt digital tools. To provide a more cost-effective service, and ultimately win back work from in-house legal teams, law firms have turned to artificial intelligence (AI) to assist with due diligence projects and e-discovery, among other work. It is a trend that is sweeping most developed legal services markets across the world. However, not all changes to the business of law come about so easily.
Way back in 2013, our coverage noted that corporate clients had reported an increased willingness among firms to consider flexible billing models. Five years later, a two-tier billing system has emerged, with clients prepared to pay top dollar for premium work, but increasingly insistent on fixed rates for more commoditised legal services. As with the take up of AI, around the more developed markets some savvy clients are instructing different firms depending on the advice required. This situation is far from unique to Sweden, though, with clients, who are sophisticated purchasers of legal services, adopting this approach on a global scale.
Interestingly, this exercise in nostalgia has resulted in the discovery that since 2013 we have only once changed the practice area headings in Sweden; the introduction of public procurement way back in 2014. It certainly leaves me with food for thought on where the Sweden guide will go from here. Gimme gimme gimme your suggestions at [email protected]. In the meantime, read on to find out more about some of the successes and challenges facing leading firms in Sweden.