Switzerland: An Arbitration Counsel Overview

The Trend to “Go Solo” – Good, Bad or a Mixed Blessing?

One of the most tangible trends in international arbitration, and markedly so in Switzerland, is the frequency with which well-known arbitration practitioners are “going solo” – ie, leaving larger, full-service law firms to establish their own practices or small boutique practices with colleagues.

The reasons behind this trend are as clear as they are understandable. With the ever-growing size and caseload of leading law firms, it has become increasingly difficult for arbitrator candidates to navigate the jungle of conflicts of interest, which frequently forces them to decline possible appointments – as attractive as these might be. Of course, this can become highly frustrating. Moreover, arbitrator appointments tend to be significantly less lucrative than counsel mandates – particularly in larger, more complex cases as we like them – where counsel mandates allow leveraging the capacity of larger teams. At the same time, they have an increased potential to create conflicts preventing the firm from accepting other potential matters. There can thus be considerable economic pressure in a larger firm setting to accept arbitrator appointments only with restraint. These factors, coupled with the general benefit of operational and personal freedom, make it seem like a logical step indeed for more senior practitioners to open their own shop eventually.

First of all, this trend appears to be a good thing for the users of the arbitration system. Increased independence and freedom from potential conflicts broaden the pool of available arbitrator candidates. Similarly, one would also expect that the leaner cost structure and operational flexibility of a sole practitioner might allow more arbitrator appointments, including in cases with a somewhat lower amount in dispute.

Conversely, smaller set-ups may also have significant downsides. It is among the main benefits of a full-service law firm that they are able to pool the expertise of practitioners across all business law areas. So, if a dispute involves specific aspects of, for example, corporate, tax, competition, IP, or sanctions law, an arbitrator can readily draw from the know-how of these specialised departments. This is something we ourselves experience in, among other places, our energy, infrastructure and M&A disputes practice. More generally, it may be fruitful or comforting to discuss particular issues with your dispute resolution colleagues within the confidential setting of a firm, be it to align on best practices, exchange views on particular experiences or just to get feedback on a judgement call.

Also, the increasing importance of AI tools may pose challenges for a sole practitioner set-up. Due to confidentiality constraints, we may not just “ask ChatGPT” or use other openly accessible, cloud-based AI solutions for our cases. Rather, law firms are commissioning dedicated tools and IT solutions that comply with the relevant regulatory framework, including confidentiality restrictions as they apply in international arbitration. However, these solutions will likely prove prohibitively expensive for a smaller firm, let alone a sole practitioner.

And finally, arbitration specialists moving away from a larger firm – unless joined by a sizeable team – will typically no longer have the required resources to handle significant cases as party representative. Almost by necessity, their work will therefore focus on arbitrator appointments, while larger firms instead focus on counsel work for the reasons indicated above.

This divergence between arbitrator and counsel work, in turn, may well also become a matter of concern for larger firms. While counsel work is typically more lucrative for bigger practice groups, it only covers part of the spectrum of skills and experience you need to develop as an arbitration practitioner to excel in our job.

It is only when sitting as an arbitrator that you see how a specific case presentation, a particular style or a certain procedural move is perceived by the tribunal. It is only when sitting as an arbitrator that you experience the particular dynamics at different decision-making stages as they may arise within a diverse setting of various different tribunals. And it is only when sitting as an arbitrator that you see whether party representatives have truly and effectively addressed all the issues required for the tribunal to decide in favour of that party.

Sitting as an arbitrator therefore provides invaluable input to further develop and hone your core skills as arbitration counsel. If you want to win cases, you need to know and convince your audience, and that audience is the tribunal.

It is also for this reason that larger law firms are well advised to allow and encourage their members to accept arbitrator appointments from an early stage and throughout their career as a core aspect of their professional development.

On a related matter, a divergence between arbitrator and counsel work may also pose challenges for a continuous know-how transfer to the next generation. Traditionally, at least in most jurisdictions and certainly in Switzerland, most experienced and well-known arbitrators have been part of larger law firms and practice groups. As such, they have been ideally placed to share their wealth of experience with younger practitioners in the team. Among other things, the opportunity to act as a tribunal secretary allows less practised counsel to experience the inner workings of a variety of tribunals and to learn from the best at an early stage; it has thus been the starting point of many great arbitration careers.

Also, against that background, recent initiatives such as the newly developed Tribunal Secretary Platform, an innovative tool that aids arbitrators in sourcing external tribunal secretaries for case-specific collaborations, as well as the related Tribunal Secretary Training offered by the Swiss Arbitration Association are all the more important for fostering Switzerland’s role as a leading centre of arbitration.

Notwithstanding the above, with all the possible upsides and downsides, the current global trend towards smaller arbitrator practices in international arbitration, and specifically in Switzerland, is first and foremost a fact, and part of the competitive landscape in our lively, ever-evolving arbitration community, which will continue to thrive in the future as it does today.