ALLEN & OVERY

Comment: This firm deviated quite a way from its path of catching up with the top of the market. In some of its central practices, specifically banking and finance, corporate and tax, it had a checkered year. Despite prestigious projects, such as a major acquisition for Allianz in the UK and advice to Tui on selling a subsidiary, the year was clouded by staff upheaval. Last year’s loss of an M&A partner to Cleary Gottlieb and a capital markets specialist to Latham was followed by another departure in transactions with the move of PE expert Dr. Michael Bernhardt (to Milbank). A heavier blow, however, was the loss of the long-standing and well-connected senior partner and finance star Dr. Neil Weiand to Linklaters.
A&O is currently undergoing an internal change process: it already became known last year that a pay system review was in the cards as well.
But the firm still has a number of strong lawyers in its ranks. In corporate, Dr. Hans Diekmann stands out. He nurtures contacts in corporate boardrooms with advice on corporate governance issues. In the M&A practice, managing partner Dr. Astrid Krüger carved out a profile alongside Dr. Helge Schäfer and Dr. Hans Schoneweg. Under Krüger’s leadership, A&O advised Riverside on selling its share in Transporeon, one of the highest-revenue instructions of this year. M&A was also given a boost by the appointment of a partner who is predestined to deepen the firm’s connections in the Gulf region with his language skills. But well-known corporate lawyer Dr. Hans-Christoph Ihrig turned his back on A&O to launch his own firm.
The dispute resolution practice was also bolstered strategically by a partner appointment. The team managed to take up a central position in internal investigations into dividend stripping and “cum-cum” deals, and works hand in hand with Dr. Gottfried Breuninger’s tax practice, which played a pivotal role in advising banks in these affairs. But this practice too suffered a blow with the move of Dr. Marcus Helios to Ernst & Young, as well as losses at of counsel and counsel level, which led to comments in the market about discord in the tax team. This too showed how staff unrest is hindering A&O’s development.
While the practice for bank lending and acquisition finance had reason for celebration with a brilliant performance in advice on the €57bn financing of the Monsanto takeover by Bayer, A&O has work to do in another segment of banking and finance: in bank regulatory law, the arrival of a Mayer Brown partner was a step in the right direction, but further efforts will be necessary to compensate for Frank Herring’s change to of counsel status and Kai Schaffelhuber's sudden departure (own firm).
A turnaround was seen, however, in the antitrust practice, which was expanded last year by a renowned new hire from White & Case after many years of trying, and successful integration is now evident. The potential in the practice is shown by how Jürgen Schindler was able to tighten ties to Google and advise the company in the high-profile EU investigation.
A&O is not only excellently equipped for the future, but is also beating some competitors to the punch when it comes to legal tech. IT-based applications for routine work have long been a matter of course for A&O. Besides tools for internal use to make client work more efficient, A&O also offers online services to support clients with, for example, risk management (e.g. derivatives, shareholdings or cross-border data transfer). The compliance system MarginMatrix deserves a special mention. This was developed in collaboration with Deloitte and is set to speed up document preparation for OTC derivatives many times over.
Lawyers in Germany: 197
International network: Integrated firm, broad setup in western and eastern Europe, as well as the Gulf region, northern Africa, the US, Canada, Asia and the Pacific region. A&O recently launched in South Africa and South Korea and has an exclusive connection with Gedik & Eraksoy (Turkey).
Developments: The fact that A&O is going through a restructuring process is not bad per se. On the contrary: competitors like Clifford Chance and Linklaters have shown how a firm can indeed emerge stronger from such a process. But this requires a clear strategy and structured approaches to prevent prized partners from leaving. It is precisely these that observers still find lacking at A&O. Some of the departures appeared unwanted.
New managing partner Dr. Astrid Krüger is facing the challenge, alongside senior partner Thomas Ubber, of giving the firm a new, more future-proof face. After all, it will only be able to strike at the top of the market if it is attractive to up-and-coming top performers. But A&O will also have to deploy laterals, as the gaps rendered by the partner departures are too large. The strategically important fields of bank regulatory law and finance play a crucial role in this, as the firm, with its banking origins, will have to uphold its core competence and drive this forward energetically in the era of Brexit, which will bring huge challenges for this sector.
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