Comment: This firm steeped in tradition is modernizing, which is causing less friction in the partnership and showing quicker results than expected. Officially joining the global Taxand alliance at the beginning of 2016 widened the firm’s client base considerably, esp. in tax, where it remains the benchmark in the German market in many regards. Managing partner Prof. Dr. Thomas Rödder’s corporate tax team is increasingly feeding German work into the network and thus keeping the lead role in work for high-end German clients internationally. Advice to road building machine manufacturer Wirtgen on its €4.4bn sale to US corporate John Deere (public knowledge) is a prime example, involving Brazilian, Chinese and Indian members of the Taxand network as tax advisors. The alliance was even in action in cross-border restructuring work for DAX corporates. But almost more importantly, the new connections are delivering serious inbound work for FGS, adding mainly European companies to the previously almost exclusively German client base.
The firm also displayed innovation in legal and tax tech: with a digital subsidiary set up in fall 2017, FGS is going on the offensive and wants to offer its clients an innovative tax compliance management system. It brought Deutsche Telekom on board as a technical partner. The aim of the collaboration is to match up to financially stronger law firms and tax advisory companies by offering a customized client solution. The market-leading company succession and trusts team already appears in the market with technical products, which shows how broad the digital agenda at FGS is.
But FGS suffered a setback, which, although it did not concern its core activity, sapped its self-confidence: an almost 20-strong legal and tax team from Berlin and Bonn left to join forces with former equity partners Dr. Helder Schnittker and Dr. Peter Möllmann. Not only was this the largest spinoff FGS ever experienced, it also meant the loss of a number of young partners who had caused a stir in the Berlin startup and VC scene in recent years and given the firm a modern face.
JUVE Law Firm of the Year for: Company succession and trusts.
See also: ?Berlin, ?Rheinland.
Lawyers in Germany: 155
International network: Independent MDP. Member of the global tax alliance Taxand from 2016. Formalized tax network with Leitner + Leitner in Austria/eastern Europe. In corporate and other fields, the network of befriended firms remains informal.
Developments: The departure of Schnittker and Möllmann shows that the normal market laws apply to this firm, with its traditionally sturdy partnership. The spinoff may have had little to do with dissatisfaction with the general FGS course in this particular case, but can be seen as a general expression of dissatisfaction with a rigid culture centering on senior partners, despite all the modernization efforts. A certain unrest has grown across the entire breadth of the firm in recent years, partly fed by the fact that there are some considerable monetary differences between the individual partners and associates.
Management recognized this problem a while ago and began to open up the structures at all levels. Making two laterals, the former King & Wood Mallesons lawyers Christian Schatz and Dr. Martin Brockhausen, equity partners in 2017 was a novelty, as was naming its first female partner (Frankfurt sales tax expert Dr. Barbara Fleckenstein-Weiland), which had long been called for. The largely performance-related associate pay has also met with growing criticism in recent years and threatened to put off highly qualified new graduates – a scenario that a firm reliant on top applicants cannot afford. There is much to suggest, therefore, that this course too will be corrected.
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