International Corporate Finance

(Joyce) #1

International Corporate Finance (^) Law Firms
This year again, international
law firms continue to settle in
Luxembourg. Pierre-Alexandre
Degehet, partner of leading
Luxembourg firm Bonn Steichen
& Partners, decodes the attrac-
tiveness of the local legal mar-
ket and what will happen after
the Brexit.
An increasing number of Anglo-
Saxon law firms are opening in
Luxembourg. Does this threaten
independent local law firms?
The Luxembourg bar, which has
seen the number of registered
lawyers constantly increase in the
past thirty years, is characterized
by a high density of law firms,
which are polarized around seven
major law firms, including magic
circles firm, accounting for more
than a quarter of the lawyers cur-
rently practicing in Luxembourg.
The attractiveness of Luxembourg
for foreign law firms is undeniable
and is not recent; some of those
international law firms present in
Luxembourg have been here for
several years, and their presence,
alongside well-established local
independent firms, as well as the
arrival of several new actors does
not threaten previously establi-
shed situations.
The new arrivals certainly impact
the strategy and orientations of
local independent law firms
which may see a decrease in their
business. This situation requires
a new and thorough review of its
business model. However, this
research of innovative ways to
create business and new means of
providing legal services – which
are adapted to the evermore
demanding standards set by
clients – may well prove to be a
blessing in disguise.
However, Independence and glo-
bality are not mutually exclusive.
Independent local law firms deve-
loping an international strategy
will develop a strong and efficient
knit network of key contacts and
“best friends polices” whether
exclusive or not, allowing them to
provide the highest level of legal
service to a client in its jurisdic-
tion whilst liaising with a reliable,
high-level, contact in any other
jurisdiction.
In conclusion, this represents
more of an opportunity for local
law firms than a threat.
Leaders League. Will the Brexit affect
the Luxembourg legal market?
Let’s be honest, as of today, we do
not know where we go and what
the potential consequences might
be. The Brexit is likely to impact
Luxembourg, the entire question
is to determine whether this will
be in a detrimental way and if yes,
to which extent.
For instance, funds of British
origin represent approximately
more than 16% of domiciled
funds in the Grand-Duchy and
Brexit might hinder the creation
and management of such funds
in Luxembourg. Moreover, Brexit
may also impact many other areas
of the legal market such as the
contractual dispute resolution, the
M&A, the anti-trust, etc. There is
still some uncertainty related to
how the UK is going to handle the
already integrated EU law.
However, the scale of the potential
repercussions on Luxembourg is
still difficult to assess because the
situation greatly depends on how
the relations between the UK and
the EU will evolve.
Leaders League. What are the latest
legal innovations in Luxembourg?
Two recent legal innovations are
worth mentioning, namely the
modernization of RCSL and the
bill n°6777 on S.à r.l.- S (société
à responsabilité limitée simplifiée)
was passed on July 13th by the
Chambre des Députés.
On May 10th 2016, the Chambre
des Députés adopted a new legis-
lation regarding the Luxembourg
Register of Commerce and Com-
panies. Amongst its stipulations,
one could point out the abolition
of the well-known Mémorial C
that will be replaced by the RESA
(“nouveau Recueil Electronique
des Sociétés et Associations”) and
the fact that costs for late filing of
annual accounts can now reach up
to € 500 after a 4-month delay.
The institution of the S.à r.l.- S
stems from a 2008 European Com-
mission recommendation called
“Small Business Act” already fol-
lowed by Belgium (SPRL-Starter)
notably. By reducing the cost of
creation, the goal is to stimulate
the creation of businesses. The
costs of setting up a S.à r.l.- S will
be €191 (minimum share capital:
€1; registration fees: €75; registra-
tion at the RCSL: €15; publica-
tion at the Mémorial: €100). This
initiative has however received
mixed responses from the Conseil
de l’Ordre des Avocats du Bar-
reau de Luxembourg and from the
Chambre des métiers
“Independence and globality are
not mutually exclusive”
Pierre-Alexandre Degehet
Partner
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