The legal figure of Verein is widely used in Switzerland, Germany, Austria and Liechtenstein. It is often translated as “association” or “society,” but these fail to capture the unique legal and structural characteristics of the entity. As defined by Swiss law, Verein stands for a broader, more flexible organizational form than is typically understood by “association” in other jurisdictions, which is why the term is often left untranslated.

A Swiss Verein is an entity recognized under Swiss law that allows multiple organizations to operate under a unified brand while maintaining their individual legal and financial autonomy. It has gained traction over a span of decades, including its adoption by a number of major international law firms.

One of the most attractive features of the Swiss Verein is its remarkable flexibility. The incorporation process is relatively straightforward, requiring only two natural persons to serve as founding members, an agreed-upon name and purpose, and a basic written agreement. Unlike many other corporate structures, there is generally no obligation to enter a Verein into the commercial registry, unless it engages in commercial activities.

The Verein offers considerable freedom in terms of its purpose and activities, provided they be lawful. Furthermore, while a Verein can be used as a holding entity for for-profit business enterprises, its own purpose may not be the pursuit of monetary gain.

In the context of law firms, the Verein typically functions as a holding company, with individual member firms operating as subsidiaries. This structure allows each member firm to maintain its own profit center and manage its liabilities independently while benefiting from a shared brand and resources. 

The Verein structure also facilitates quick and flexible international mergers, allowing law firms to expand their global presence rapidly. This has been a key factor in the growth of DLA Piper, Dentons, and Hogan Lovells. Merging firms can promote a unified brand while maintaining separate financial and legal liabilities. This arrangement can be particularly advantageous when parties have uneven profitability levels.

One further aspect that contributes to the appeal of the Swiss Verein structure is Switzerland’s long-standing reputation for neutrality and its history of hosting international organizations. Moreover, an association with Switzerland’s reputation for efficiency and stability is regarded as a benefit to the global brand. 

Some disadvantages inherent to the structure include that it can give rise to complex conflicts of interest. When involved in international litigation, a U.S. bar counsel, for instance, may treat all offices within a Verein as part of the same firm, regardless of corporate formalities.

Furthermore, there may be challenges to maintaining a cohesive firm culture across geographically and legally separate entities. For instance, Vereine may create disincentives for cross-referrals between member firms.

As the legal industry continues to globalize, however, it is likely to remain a meaningful option for firms seeking to expand their international footprint while maintaining local autonomy.

By all accounts, then, the Swiss Verein is a legal- and commercial success story, which garnered it brand-like status. It is on account of this status that foreign language speakers have gravitated to relying on the original German term.