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Switzerland's legal and financial markets are aptly defined as stubborn and stable. The year hasn't witnessed anything which vastly stands apart from the ordinary and it has been "business as usual" for the large part across the cantons....

Switzerland's legal and financial markets are aptly defined as stubborn and stable. The year hasn't witnessed anything which vastly stands apart from the ordinary and it has been "business as usual" for the large part across the cantons. "The economy has been very robust. There have been no fancy transactions, there never were actually," one partner says. However, this isn't to say that there hasn't been any subject matter capable of rousing comment from practitioners.

The Swiss wealth management industry is being squeezed by external pressure against tax evasion as costs rise and the stream of new assets subsides. "There has been pressure from the US on the tax issue. This has not ended in legislative activity but ends in double taxation treaties," one partner says.

With smaller private banks set to struggle, Switzerland still awaits the much anticipated consolidation of the private banking sector. "Consolidation of private banking has not really taken off," one partner says, adding: "We expect that will come, some banks in the past played the greyish card and need to find new business". Linked to this trend, there are a number of players exiting the market or disposing of non-core business assets and European banks look to dispose their private banking arms. "They're out of the market and sell Swiss subsidiaries," one partner says, adding: "There's consolidation in Swiss private banking, investors are risk averse, It's not like the 80's."

With a spattering of IPOs over the last twelve months and some debt market activity, the Swiss capital markets have been quite slow. "In equity, IPOs are still pretty low. We can't claim Glencore," one partner says, with another adding: "The equity trend continues. There's no huge uplift. Some companies with good cash flow have tried to go to the market." Debt capital markets have not been a source of much excitement either. "Some small caps access the debt market but it's not a trend. Investors are not really interested," says one partner.

In project finance, law firm's work takes place on the international platform as there is limited scope for it domestically. "Domestic project finance is quite small. We see structures for project finance as too heavy and costly for here. If there was infrastructure to finance this might change," one partner says.

The M&A market displayed healthiness in the last year with a vigorous deal flow and a promising pipeline. "Compared to last year we might even say that the heat has turned up a little bit," one partner says. Of course, looking ahead, there are expectations for something to happen with regard to consolidation in the banking sector. Nevertheless, while domestic activity in the form of Swiss midcaps has been stout, there has in fact been an uptake in international activity. Foreign buyers have made their presence felt on the market and interestingly, commentators observed new buyers from Asia and the Middle East. "Valuations are low. It's a buyer's market rather than sellers," one partner says, adding: "There is much more protection for the buyer than a few years ago."

In terms of mega deals, the market saw the high profile $51.5 billion acquisition of Alcon by Novartis extend into April 2011. "We see a couple of these, we always have mega ticket deals. They're in a low number but still they are there," one partner says. Furthermore, public M&As have continued steadily, but in terms of volume and value there hasn't been any far-reaching changes. "The Swiss market is not large for tender offers," one partner says, adding: "[One] can't expect more than 10 in a year." On the other hand, private M&A transactions were subject to an upturn after the crisis. "In volume, private is much busier. This is how it is but few top tier firms cover both," one partner says.

Another interesting observation from commentators saw movement with regard to private equity. "Private equity funds are back to some extent. Auctions have taken place," one partner says. "Transactions are not yet back as they were three years ago. These players are not hugely active but do it on an opportunistic basis," another partner says.

On account of Switzerland's relative ease in conjunction to the financial crisis, law firms were not met with the surge in restructuring and insolvency work that gripped their European counterparts. However, the affliction that hit the country's international players translated onto the domestic front. For example, Lehman Brothers insolvency continues to provide a source of work in Switzerland. Additionally, the start of the year saw an important procedural development, which significantly modified the judicial landscape in Switzerland. As of January 1 2011, the first unified federal codes of civil and criminal procedure came into force. The enactment of the Swiss Civil Procedure Code, from a purely procedural perspective, enables lawyers to move more easily in other cantonal jurisdictions. However, with regard to insolvency, this development will have limited effects on the applied law. The most important of these effects will be the extension of the ability for a creditor located in Switzerland or abroad to get the assets of a debtor attached. Previously, such attachment was only granted in Switzerland against debtors located abroad.

All in all, the state of affairs in the Swiss legal market breeds sanguinity. "We're still confident because it's all positive for the future," says one partner, adding: "It's difficult to foresee the strength of the Swiss Franc and its impact in the future. At the moment it's okay. [We're] doing well and there's money available. People are interested in investing in Switzerland and although it's expensive it will not depreciate".