Editor: Will each of you provide our readers with something of your background and experience?
Student: I am a partner in Holland & Knight's New York office. I work extensively with overseas clients, and the largest part of my practice involves the Nordic region, mostly Finland. For some twenty years I have worked with Finnish clients located both here and in Finland.
Lorentzen: I am a law graduate of the University of Oslo. As a high school exchange student, I lived in the United States prior to university. Following my law studies, I joined Thommessen Krefting Greve Lund, one of the largest law firms in Norway. It is a full-service firm with offices in Oslo, Bergen, London and Brussels and about 130 lawyers. My practice areas are mainly corporate and maritime law.
Rosholm: In 1999 I graduated with a masters degree from the University of Copenhagen and joined Gorrissen Federspiel Kierkegaard, one of the largest law firms in Denmark, with about 125 lawyers. The firm has a strong international practice and represents many major foreign companies and financial institutions. My practice is mainly maritime law, corporate law and litigation.
Stenberg: I have worked for Advokatfirman Delphi & Co. since 2000. Delphi & Co., which is one of the largest firms in Sweden, has approximately 100 lawyers situated in Stockholm and five other cities in Sweden. Many of the firm's clients are foreign corporations, primarily from the U.S. I work in the corporate department, with a particular emphasis on mergers and acquisitions. I have been involved in several cross-border transactions and also in assisting foreign corporations setting up and conducting operations in Sweden.
Editor: How did you come to Holland & Knight's New York office?
Lorentzen: The Northern Shipowners' Defense Club, which is located in Norway, administers a scholarship program, part of which involves a traineeship at Holland & Knight. I applied for the scholarship and was fortunate to be awarded one.
Rosholm: My firm has a long relationship with Holland & Knight's New York office. Lennard Rambusch, the Holland & Knight partner who is in charge of the firm's Foreign Lawyers' Program, is often in Copenhagen. It was this close connection that allowed me to come here.
Stenberg: Delphi & Co has a longstanding relationship with Holland & Knight, particularly in working with Swedish clients conducting their activities in the U.S. and American clients operating in Sweden.
Editor: Are there significant differences among the four systems in the Nordic region, or are they all substantially similar?
Lorentzen: I would say that the Swedish, Danish and Norwegian legal systems are very similar. There is a similar constitutional basis in all three cases, and the application of basic principles is essentially the same. As a result of cooperation, there are also a number of statutory regimes that apply to all three countries.
Student: I have the impression that the Finnish system has a considerable amount in common with those in place in the other Nordic countries. It is a civil law system and while Finland's cultural heritage is somewhat different, I understand there is considerable commonality with the other systems, and that it is relatively easy for lawyers to deal with each other across these borders.
Editor: Are there significant differences between the Scandinavian systems and the legal system here in the United States?
Lorentzen: The major difference is that the Scandinavian countries have civil law systems, while the U.S. has the common law system. Consequently, the Scandinavian legal systems are primarily based on the concept of written statutes passed by the legislature. In other words, the majority of legal areas are regulated by statutes and not by rules developed through jurisprudence and case law. However, court decisions are an important source when further developing law and interpreting statutes.
Rosholm: Another difference lies in the fact that the Scandinavian countries have a single layer of statutes enacted by the parliament of each country, while the United States has both a federal and then many state systems. However, due to the membership of the European Union, the Scandinavian countries, except Norway, have to some extent two layers of legislation as well.
Editor: Do you find significant cultural differences between your law firms at home and Holland & Knight?
Lorentzen: Firm culture varies from place to place, but I find the atmosphere, the expectations and the general culture of Thommessen and Holland & Knight to be very similar. In both cases there is a professional environment that is very positive.
Stenberg: I think that the similarity in firm culture derives, at least in part, from the fact that all of our firms are involved in international trade and working with multinational corporations as clients.
Editor: Do you find a difference between the ways law firm lawyers in Scandinavia relate to their corporate counsel and what you have seen here?
Student: Collaboration between in-house counsel and outside counsel is increasingly common in the United States, and close and continuous relationships are possible these days because of the ease of communication. Corporate counsel favor this development because it gives them a better ability to manage the entire process.
Stenberg: I believe that in Sweden we are seeing a trend toward more integrated relationships between law firms and in-house counsel. We have always worked in "teams" with the clients' legal departments. In the past, however, this was to a large extent related to a specific transaction or litigation. Today we have more day-to-day contacts with in-house counsel.
Editor: As you know, many of our readers are interested in Scandinavia and the Nordic region as an investment destination. Can you describe the investment climate there?
Student: A recent study on private equity investment transactions reported that the second and third highest rates of growth in western countries are in Sweden and Denmark. In addition, the annual report on global competitiveness of the World Economic Forum has just listed Finland, the United States, Sweden, Denmark and Taiwan, in that order, as the most competitive economies in the world.
Rosholm: Also, the World Bank has in a recent report praised Denmark and the other Nordic countries for their investment-friendly business regulations. Life sciences, IT, and telecommunications are all important sectors, and they provide considerable opportunities for foreign investment. Also, a stable economy throughout Scandinavia forms a good basis for investment.
Stenberg: Foreign direct investment flows to Scandinavia have been substantial in recent years. Since 1999 the number of Fortune 100 companies that have established new operations in Scandinavia has increased by approximately 25%, which is very high compared to the foreign investment flows to Europe in general.
Editor: What are some of the incentives that are offered to businesses relocating or starting up in Scandinavia?
Lorentzen: First of all, the general corporate tax level is favorable throughout Scandinavia. Furthermore, a foreign corporation wishing to start up operations finds throughout Scandinavia a highly educated and well trained, and affordable, workforce.
Rosholm: The well-educated workforce probably derives from free access to education from primary school through university. Even after people join the workforce, state-funded training is available.
Stenberg: Apart from the low general corporate tax rate, there are also other favorable tax incentives for foreign companies to move to Sweden. For instance, as from July 1, 2003, new legislation entered into force making capital gains on sales of holdings of controlling shares in companies tax-free. This used to be a problem, since some large multinational corporations avoided setting up holding companies in Sweden. Further, it is often considered to be easier to start new companies in Scandinavia compared to Europe as a whole, with a less obtrusive bureaucracy and quicker processing times. Sweden is also often referred to as a good test market for new products and services.
Rosholm: Denmark also offers flexible holding taxation rules and tax incentives. For example, foreign managers of a foreign corporation setting up in Denmark are subject to a low personal income tax rate, 25%, compared to Danish citizens.
Editor: Each of Denmark, Norway, Sweden and Finland has a different degree of integration into the European Union and the Euro Zone. Can you tell our readers about the issues each country has with a more complete integration with Europe?
Lorentzen: Norway is not a member of the EU or the Euro Zone, but through the European Economic Area agreement Norway has generally full access to the European Union market, and has the same rights and obligations as its competitors among the EU member countries, including free movement of goods, persons, services and money. There are important exceptions to this, such as the EU's agriculture and fisheries policies, in which Norway does not participate.
Rosholm: Denmark has been a part of the EU since 1973, but the integration is not complete. Denmark has certain exceptions, e.g. regarding military and monetary obligations. Thus, Denmark is not part of the Euro Zone and our participation has been voted down twice by the Danish population.
Stenberg: Sweden has been part of the EU since 1995. Recently, there was a referendum on joining the Euro Zone, which was defeated.
Editor: The Nordic region countries, with their long experience in international trade and shipping, were part of a global economy before the term was invented. May we have your thoughts on globalization?
Stenberg: The Nordic region on its own is a rather small market. International trade has been important for centuries as a consequence. In the current globalization process, the Baltic states constitute an important region for the Nordic countries, and I think you will see considerable activity there as Nordic enterprises seek to open up and integrate the region into a larger Nordic and European market. Considering that these countries will become members of the European Union in May 2004, this is an inevitable development.
Student: I had occasion recently to review with our trainee group an American commercial contract as a basis for discussion on the differences they would find at home. The consensus of the group was that the American contract is not very different from those that they deal with in the Nordic region, and that the drafting of provisions, the negotiation of terms and so on are quite similar. That suggests to me that there is a convergence between the way American lawyers work through commercial legal issues and the way their counterparts work in civil law countries. This, too, is part of the globalization trend.
Published February 1, 2004.
