FRESHFIELDS BRUCKHAUS DERINGER

Comment: There is probably no other firm taking such a strategic approach to its streamlining and generation change. Even the closest competitors take their hats off to the performance of the German management around Dr. Helmut Bergmann and his predecessor Prof. Dr. Klaus-Stefan Hohenstatt, as well as the German partnership as a whole: “They set the standard for all others because they triggered change from a position of strength,” acknowledged one influential partner at a competitor grudgingly. The discussions and speculations about partner departures and the closure of the Cologne office last year are continuing. But, given the successful track record, these seem to be more on the periphery, rather than suggesting deep structural problems.
With a somewhat smaller corporate team, FBD now handles fewer deals, but it impresses the market with larger, more complex and more lucrative instructions than in the past. Good examples include accompanying Stada through turbulent times and a public bidding war, work for the London Stock Exchange regarding its planned merger with Deutsche Börse, ongoing restructuring advice to HSH, and work for Hewlett Packard. Deals like Midea/Kuka and Vossloh/Rocla show how natural the role of manager in large-scale transactions focused outside of Europe is for the German lawyers.
Work for VW in the diesel affair is a prime example in many regards of how FBD is distinguishing itself more and more from long-time competitors Hengeler Mueller and Linklaters. This was the world’s largest product liability case to date and kept a dozen partners busy in Germany alone. One task was coordinating the difficult regulatory, civil and criminal law problems in around 50 countries. FBD thus entered a new organizational dimension, also in its use of legal tech solutions.
Other instructions showed how much practice FBD has had at bringing together its distinguished experts. This goes for extensive compliance investigations (e.g. Airbus) as well as cross-border M&A transactions (e.g. Midea/Kuka), where preparatory advice and structuring with regard to antitrust, tax or customs and trade regulations are growing in importance.
It is noteworthy how younger generation partners are at the forefront of such instructions and get positive feedback from clients, among them Dr. Uta Itzen (antitrust), Dr. Michael Rohls (litigation), Dr. Patrick Cichy, Dr. Markus Paul, Dr. Wessel Heukamp and Dr. Gregor von Bonin (all corporate).
But high-end advice and exhausting the legal possibilities also pose risks, as shown by the headlines arising when the dividend stripping investigative committee of the Bundestag applied to the Federal Court of Justice (Bundesgerichtshof) to search the firm premises. The court rejected the application, but the argument over the legality and consequences of billion-euro dividend stripping tax transactions rages on.
JUVE Law Firm of the Year for: Region North.
Lawyers in Germany: 500
International network: Integrated international firm (uniform lockstep), esp. strong in Europe. The firm has several offices in the Gulf region and exclusive partnerships. In Asia, the strategic focus is on China and Japan. Offices in New York and Washington (around 40 US partners).
Developments: When other firms manage to talk to a Freshfields partner about a move, it is considered a badge of honor. Indeed, a number of partners left the firm in the past two years to retire or go to competitors or boutiques. So far FBD has coped with this without any major wounds and defines it as part of the generation change. This is why firm management must pay particular attention to the next generation. Even the highly trained younger partners with experience in international deals are coveted by competitors, but they form the foundation of FBD’s ambitious plans. Focusing on maintaining and raising profitability – strict cost management, a concentration on lucrative work, deployment of project lawyers – makes sense for two reasons: it makes partners less likely to fall for what are currently exorbitant offers by US firms, and it enables the firm itself to appear as an attractive destination for US laterals and thus raise its capacities. The partnership only recently approved further investments in building the US practice. The declared goal is to become the first stop for German corporates for deals in the US. But US firms like Milbank, Kirkland and, in particular, Latham, are pursuing the same goal, all with hefty investments in German laterals. Financially, FBD will not win the competition for young partners. Loyalty and faithfulness will depend largely on well-oiled interdisciplinary cooperation in high-end instructions as well as internal culture.
There are also areas in need of development this side of the Atlantic. It is a little known fact in Germany that the London office is undergoing a streamlining process (partly in connection with the development of the service center in Manchester). Similarly to other large London names like Clifford Chance and Linklaters, with Brexit approaching FBD needs to plan how it will position itself within its European practice in the future. Many observers prophesize that the German economy will profit as investors from outside of Europe will direct their interest towards the strongest economy in the EU. The German Freshfields practice – esp. Frankfurt – is well equipped for the upcoming advice to banks, PE investors and other companies. In Munich, following the move of two PE partners to Frankfurt, full integration within the local investor scene will require further efforts. More attention should also be paid to cooperation with the Paris office. Although a converging of the continental European practices is a defined strategic objective, Jones Day or Cleary Gottlieb are already more intertwined on the German-French axis, which is currently getting a hefty political push.
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