When it is Quiet at the 'zuidas’

We at LawyerlinQ are experts when it comes to the Dutch legal sector. Our co-founder Marijn Rooijmans is a regular columnist for the well-known Dutch website Advocatie.nl. In his latest column, he addresses the growth numbers of Holland’s largest law firms.

The column itself is in Dutch, so we provide you with a short English summary.

Recent reports in the FD reveal that De Brauw saw a 9% growth in 2023, despite an 8% reduction in staff at the start of 2024. Other law firms also reported revenue increases: Loyens & Loeff by 10% with a 5% rise in employees, Stibbe by 6% with a 1% employee increase, and Houthoff with a 7% revenue rise and a 12% growth in staff. Nauta lagged behind with a 2.6% revenue increase but saw a 4% drop in staff.

These numbers raise questions about the impact of fee hikes for inflation adjustments, which complicate the true picture of firm performance. Despite 2023 being a good year, recent feedback indicates a slowdown in activity at major Zuidas law firms and consulting houses, with reports of fewer partner promotions at McKinsey suggesting a broader market downturn.

The CBS reports a 0.1% economic contraction in Q1 2024, possibly affecting companies’ willingness to undertake legal projects. Yet, the top 10 law firms in the Netherlands are either stable or growing in staff numbers, a trend not mirrored in other sectors where slowdowns typically lead to immediate layoffs.

The legal sector’s reluctance to downsize could be cultural, valuing long-term relationships and clan-like bonds over short-term profitability. Furthermore, many Dutch firms are not managed purely as businesses, allowing for inefficiencies and overcapacity, sustained by limited price competition and clients tolerating higher costs.

While some cost-cutting measures are discreetly implemented through stricter evaluations and limited career progression, these actions remain under the radar, especially when the Zuidas is quiet.

Looking to learn more about the Dutch legal sector? Contact our other co-founder Maarten Hagen