Germany saw a flurry of activity last month, with Freshfields Bruckhaus Deringer and White & Case pulling out of several markets and consolidating their operations, while Herbert Smith Freehills (HSF) went the other way and set up shop in Düsseldorf.
Freshfields announced plans to cut one of its six offices in the region, with its Cologne and Düsseldorf bases set to merge in 2016. The cut means 240 fee-earners will be located in one office – which is yet to be decided, though Cologne is regarded as more likely to shut – as the Magic Circle reconfigures its German operations. A spokesperson at the firm said the merger is ‘not driven by cost or a requirement to downsize’, but to create ‘greater efficiency’ and have ‘more lawyers in a single location to offer a stronger and more specialist platform’.
Incoming co-managing partner, Stephan Eilers, commented: ‘With all the advancements in technology, it’s becoming a little less important where we work, so our office structure could become more flexible. The last two to three years in Germany have been challenging, but it is now picking up and capital markets are coming back.’
In the same month, White & Case prepared to close its Munich arm a decade on from launching, offering its 11-lawyer team the choice to relocate to its larger Frankfurt base, with many expected to take up the transfer option. This is the second time the firm has retreated from markets in the region – having shut its Dresden branch in 2008 – leaving the firm with four German bases in Berlin, Düsseldorf, Frankfurt and Hamburg which, including Munich, house around 200 lawyers.
While the German market fared better than other key markets during the recession, the slowdown in China’s market has inevitably had a negative impact on its manufacturing economy, which relies on Chinese investment.
One London head at a US firm said: ‘Law firms refocused and restructured in New York and London during the crisis, but there was never that burning platform for change in Germany. This has now crept up on law firms. To be a player in Germany, you need to be in the major states and have to spread resources across the region. And when the economy becomes more buoyant, this becomes challenging to maintain.’
In contrast, HSF hired former Clifford Chance arbitration partner Thomas Weimann to launch in Düsseldorf, marking its third office in Germany, alongside Frankfurt and Berlin. The new office will target German blue-chip clients and international corporates, including Japanese and Chinese companies, as the firm extends its offering in corporate, intellectual property and competition law in Düsseldorf.
jaishree.kalia@legalease.co.uk