Comment: The main developments at GSK are currently occurring in the background. But now and again, there are signs of just how extensive the change currently underway is. The firm is gradually reaching its goal of conquering higher end, more complex work through clear internal structures.
The first starting point is the young Luxembourg office, which has seen massive growth in a short space of time and is now staffed by lawyers from various countries, incl. China. From here, GSK advised EQT on a billion-euro deal (with Freshfields). The international network paid dividends when GSK worked with partner firm LPA Primonial REIM on one of the year’s largest real estate transactions. Although GSK did not play the lead role in either case, they highlight the firm’s potential.
Another event also made the market sit up and take notice: with an increase of almost nine percent, 2016 saw the highest turnover per fee earner in the firm’s history – and that was despite the fact that the international network Broadlaw no longer has a British partner following the painful departure of Nabarro. But GSK is entirely capable of activating international contacts away from its European network as well, as advice to US company Visual IQ on an acquisition in Germany shows: this arose from a recommendation by a US firm. In Austria, GSK landed a major real estate deal in a joint pitch with CHSH.
In the real estate sector (its mainstay) GSK was as solid as ever and the bank regulatory and funds practice sustained its position without a problem, partly by closing ranks with the Luxembourg lawyers.
There are few firms of a similar setup that devote as much attention to strategy, structure and firm culture as GSK, and who are prepared to make investments in these. The process initiated in 2014 now seems to have met with acceptance by the remaining partners – albeit not with euphoria by all. The reasons are relatively simple: good turnover figures, lower attrition and credible opportunities for young lawyers communicated through partner appointments. These young lawyers should benefit from a new staff policy in the future. GSK is thus sturdy in headcount terms, only closing gaps in advice in IP/IT and venture capital in Berlin with a lateral from FPS.
Recommended for: ?Banking and regulatory, ?construction, ?corporate, ?environmental and planning law, ?investment funds and asset management, ?M&A, ?private equity and venture capital, ?real estate, ?tax. Notary work, project development and plant construction, public procurement.
Lawyers in Germany: 150
International network: Independent firm with an office in Luxembourg. Member of the Broadlaw network with Nunziante Magrone (Italy), Roca Junyent (Spain) and Lefèvre Pelletier & Associés (France). Nabarro (UK) left the network due to its merger with CMS Cameron McKenna. The firm has connections to the Far East, North Africa, Turkey and Dubai via partner firms.
Developments: The firm suffered several partner losses in the past three years, but there were no moves of late. This must not lull management into a false sense of security. Finding the right speed for the strategic reorientation is still a tightrope act. If this is too slow, ambitious partners may head for new shores. If it is too fast, GSK could risk losing its identity, which up to now has been shaped by a very harmonious partnership. At the same time, the firm needs to develop swiftly out of its transformation process, so that it can appear in the market with a clear profile again.
One stumbling block in this already complex process was the loss of British network partner Nabarro, GSK’s closest cooperation partner. Finding a replacement is proving a difficult and lengthy process, which meant that GSK had to change course again. It is now banking on established UK contacts outside of Broadlaw and a desk model. The lateral in Berlin is also licensed in Israel, and a Chinese associate with professional experience was hired in Luxembourg.
There is unexploited potential at national level too: although some sector groups – e.g. healthcare – are developing positively, this is not the case across the board. Developments in the energy sector, which is closely integrated with the Hamburg dispute resolution practice, are sluggish. Above all, GSK has yet to fully tap the potential offered by the litigation practice for the whole firm. This might have historical reasons: for a firm with roots in the litigious construction sector, banking on specialized litigators is not a matter of course.
But management appears absolutely determined to pursue its chosen course and to carefully turn the outfit into a firm that can play a part in international competition. This will require even more staying power.
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