What is a Swiss Verein Law Firm?

Dec 18, 2022

Written By Zara Arif

In the past few decades, the term ‘Swiss Verein’ has become somewhat of a buzzword in the legal sphere. Firms such as Hogan Lovells, Dentons, Baker McKenzie and Norton Rose Fulbright have all adopted this structure in order to drive themselves to greater success and a stronger international presence.

So, what is a Swiss Verein Law Firm?

Swiss Verein is essentially a type of law firm which is made up of lots of separate international offices that have merged under one umbrella name and brand.

This essentially creates one big law firm that operates across the world from separate offices. The key feature of this is that these offices do not share a profit pool or liabilities. In practice, this means that a partner in a New York office could refer a piece of work to the London office and this work would solely contribute to the profit pool of the London office.

What are the advantages?

The main advantage of this model is that it allows for the umbrella firm to expand internationally at a rapid rate. They can work across jurisdictions and regions without having to deal with tax and other regulatory issues as each office is completely independent of the other. From an organisational viewpoint, this is a much easier way to run a law firm as an internationally operating business.

In terms of branding, Swiss Verein firms can also benefit from having dozens of offices across the world presenting a unified front. This can help to attract multinational clients and help boost a firm’s image as they can advertise the combined profits of each office.

What are the disadvantages?

Despite these advantages which may seem invaluable as law firms look to constantly expand and attract bigger ticket clients, there are some inevitable drawbacks to the Swiss Verein model.

Firstly, there is an argument to be had in the fact that, if each office has its own profit pool, to what extent are they actually all working together? Is the fact that they all come under one big firm name simply an attempt at unifying offices, which have distinct cultures and approaches to work as well as different clients?

Furthermore, if there are different profit pools, there is undoubtedly little incentive to collaborate across regions and jurisdictions.

The ethical issues surrounding Swiss Verein firms have also been brought to the forefront. These issues mainly arise from the separation of liability from office to office. The overall firm could argue that it is not liable for malpractice in one office as each office is a separate entity, however, this calls the rights of the client into question.

Another issue is the fact that as each office is separate, they can end up defending and acting against the same client. This raises the question of how one firm or one brand can act on both sides.

Therefore, although the Swiss Verein model provides the exciting and lucrative possibility of seamless international work, it is not without its own unique challenges.

Law Firm Structure