Comment: Soft tones and small steps. True to the motto “slow and steady wins the race”, new management Prof. Dr. Michael Arnold and Dr. Alexander Schwarz did not get flustered by the market hubbub of the past year. While competitors are striking at the top of the market, like Latham & Watkins with aggressive acquisition policies or Clifford Chance with internal restructuring, GL is calmly adjusting the relevant screws – but only if the opportunity arises. This strategy has worked so far: without there being any momentous event, the firm generated record results.
GL’s strength lies in its breadth. The recent drawing cards were the increasingly international and ever larger transactions. Like many of its competitors, the firm is profiting from the strong deal market, but can also rely on its traditionally good contacts in German companies. The Host Europe and NXP transactions also showed the growing importance of connections to Asian and US clients. In banking and finance, an Achilles’ heel for a long time, Dr. Eva Reudelhuber’s team established itself further in the market.
But other practices, which in other large firms have fallen victim to restructuring, were also pivotal to the success. One reason for this is that lawyers are working more in cooperation and have thus established a new style. Employment lawyer Dr. Christian Arnold, for example, seamlessly followed in the footsteps of veteran Prof. Dr. Jobst-Hubertus Bauer in advice to company directors, but also enjoys excellent ties to the corporate lawyers ? an area where Bauer was often criticized. This was seen in litigation for Tui before the ECJ concerning employee codetermination in the supervisory board, and esp. in advice to the VW and Audi supervisory boards in the diesel scandal alongside corporate lawyer Prof. Dr. Michael Arnold. In crisis-related advice in particular, GL has established the importance of smooth interdisciplinary and interoffice cooperation more and more.
The fact that managing partner Arnold practices this himself is a sign for the lawyers in public law, the area most in need of development. Although healthcare and public procurement are still among the firm’s strong practices, radical change is on the way here. Several preeminent partners, e.g. in energy and environmental and planning law, are approaching retirement age and forcing GL to choose a direction. The practice, which the market views as very successful but also as “old school”, plans to develop more in the direction of all-round, flexible regulatory expertise – similar to that seen at other notable competitors like Freshfields Bruckhaus Deringer or Clifford Chance.
Lawyers in Germany: 324
International network: Independent firm which works in close cooperation with Chiomenti (Italy), Gide Loyrette Nouel (France) and Cuatrecasas (Spain/Portugal). Also cooperation with Macfarlanes in the UK and with Stibbe in the Netherlands. Broad network in the US, incl. Paul Weiss, Cravath Swaine & Moore, Simpson Thacher & Bartlett and Fenwick & West. Good contacts among Asian, esp. Chinese, firms.
Developments: Using the generation change as an opportunity and charting a modernization course in public law without major disruption – this mission calls on both the partners in the practice themselves and management. Competitors have already speculated about the end of public law at GL. One thing for sure is that the practice will get a new setup. Some of the young partners from the public law practices have long yearned for closer integration within the overall firm and access to high-volume transactions – and indeed the need for regulatory expertise in M&A is growing. GL now needs to make the most of these opportunities.
The pressure that large international firms like Latham & Watkins or Clifford Chance are putting on those at the top of the market is raising the question, however, of whether management can afford its strategy – using opportunities for reorientation when they arise, but not actively pushing them – in the long term. The strategy is currently very successful and the firm’s position among the top firms is uncontested. This is also because of the immense homogeneity in the partnership, both in terms of internal solidarity and professional quality.
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