How does a Swiss verein work?

Dec 18, 2022

Written By Tom Hale

A Swiss verein is, in short, a law firm partnership model. Alongside a Limited Liability Partnership (LLP) it is one of two major global partnership models. These two models form the bookends of the question of how to organise a law firm. There are many complexities to a Swiss verein, as this article will explain.

The History

The word verein, in the simple sense, is defined as a union of several members or organisations for the pursuit of a common goal. This definition is the foundation for the Swiss verein model. But first, where did it all come from?

The Swiss verein model, also known as a Swiss Association, was first used and designed by sports clubs and is now most commonly used in large-scale charities. An example includes the World Wildlife Fund (WWF). Organisations such as FIFA also use the Swiss verein model to structure themselves.

In 2004, Baker & McKenzie were the first law firm to become a Swiss verein. Since then, vereins have been used in several major mergers of law firms.

So, Who?

Some notable firms that operate the Swiss verein model are:

- Baker & McKenzie

- Dentons

- DLA Piper

- Squire Patton Boggs

- Gowling WLG

The Logistics

So, the question remains, how does a verein work? A verein is a system that allows several firms to merge together in order to form and promote a unified brand. However, whilst these firms merge under one brand, they still maintain their own legal and financial liability.

Thus, it is a model which allows brand unity whilst not tying together the financial and legal positions of each firm within the merger.

The Benefits

There are many benefits to a Swiss verein and how it works. First and foremost, the model allows for greater and faster expansion on a global scale, hence why so many major law firms have adopted the model.

In alignment with this, during such global expansion each jurisdiction within the verein can maintain their own culture and personality as a firm. They can also manage their own liabilities and profits in accordance with the applicable tax codes and laws.

On a more personal level the Swiss verein opens up opportunities for individuals within the firm. It allows for the prospect of international work and life. An enticing opportunity for many.

The Losses

In many ways the cons of a Swiss verein structure are linked to the pros. For example, each jurisdiction can manage their own liabilities and profits. That seems great; however, this means that the overall brand may have within it some highly profitable offices and some that are quite the contrary.

Furthermore, although having separate offices in separate places allows for the flourishing of cultures and personalities it is hard to not foster an overarching culture of jealousy when there is a strong possibility of differing success from one jurisdiction to the next.

There are also, of course, the costs. It can and often is an expensive task to expand so dramatically and often rapidly as a firm. The material cost alone of several different offices in several different countries and cities is not to be underestimated.

The Judgement

So, now we know how a Swiss verein works. Do you think it is a good thing? Do the pros outweigh the cons? Or vice-versa?

These are all ongoing questions that have no real right or wrong answer. Ultimately, the answer to the only question we can answer, how a verein works, is simple.

It is a global partnership model that allows many firms to merge under one unifying brand, whilst maintaining their legal and financial independence.

Law Firm Structure