LINKLATERS

Comment: What Clifford Chance has just finished, Freshfields dealt with in passing, and Allen & Overy delayed for a long time is already part of ancient firm history for Linklaters: a tough but strategic focusing – and shrinking – of the German practice. Linklaters’ ascent into the top league of DAX advisors is one of the major success stories of the past decade. But the firm seems to have reached the limit of what is possible here: for one thing because the younger partners need time to duplicate a practice like that of Dr. Ralph Wollburg or Prof. Dr. Hans-Ulrich Wilsing. A look at the business results shows only marginal growth.
On the one hand, the highest profile instructions were the same as last year: the privatization of HSH Nordbank on behalf of the participating states, the ultimately cancelled Deutsche Börse/LSE merger, the restructuring of E.on Group and internal investigations at Deutsche Bank. But these are long-term projects that take years, ensure a high utilization rate and anchor Linklaters even deeper in Germany, Inc. Wollburg’s role in the negotiations with various (former) executives regarding waived bonuses shows the cruising altitude the corporate practice has reached.
But Linklaters is getting set for the next qualitative leap, with compliance and investigations playing a key role. The firm is capitalizing on its good ties in the upper echelons of companies for compliance work, e.g. for Porsche and VW. The work for Deutsche Bank was one of the most extensive instructions in the market in tax law terms. But cooperation with the litigation specialists is not yet as pronounced as in the market-leading compliance practices.
Compared with other leading firms, it was always noticeable how the PE practice played a secondary role. The move of Dr. Rainer Traugott to Latham last year tore another gap here. The recruitment of former Clifford practice head Christopher Kellett, one of the most experienced PE partners in the market, was thus a clear sign to the market and a harbinger of stronger cross-border cooperation with the London practice. The arrival of Dr. Neil Weiand, former co-head of the German practice at Allen & Overy and one of the leading debt finance lawyers in the country, filled the biggest gap in the finance practice, which is one of Linklaters’ traditional core disciplines but which had lost some of its former visibility over the last few years. The loss of Dr. Nikolaos Paschos to Latham in fall 2017 was a blow. Not only did this demonstrate just how hot on Linklaters’ heels Latham now is, but Paschos, whose connections to Bayer are particularly strong, was also a partner in the corporate team who was well on the way to catching up to corporate godfather Wollburg. Two losses from this category in two years are not a threat to the practice, but they are a warning sign. The firm also suffered a not quite devastating but nevertheless painful loss in antitrust: Dr. Wolfgang Deselaers moved to Cleary. He is one of the most renowned specialists in the promising field of antitrust damages claims.
Lawyers in Germany: 286
International network: Integrated global firm, one of the leading transactional firms in Europe. In certain regions, the firm opts for (exclusive) alliances, e.g. with Webber Wentzel (South Africa), Abdulaziz AlGasim (Saudi Arabia) and Allens Arthur Robinson (Asia and Australia).
Developments: Structurally and in terms of staff policy, Linklaters is operating both extremely conservatively and boldly progressively at the same time. The debate in the partnership surrounding the pay system ended in 2016 with a clear vote in favor of the familiar lockstep, with just slight modifications. This clears up an internal point of contention, but when it comes to recruiting laterals and the stability of the best-known and highest revenue teams, Linklaters – like Freshfields and Hengeler – now definitely has a competitive disadvantage against merit-based firms. The firm must emphasize its other advantages: close ties to top corporate executives, for example, are a valuable asset in the context of the shifting of power in the European market away from London and towards Germany. Outstanding connections to the country’s biggest banks should also help the firm enhance its position in the years ahead.
Linklaters took an entirely new approach when it came to recruiting young staff: when there were no more distinguishing features to be gained in the race for the highest starting salary, management around Andreas Steck ventured a radical step – against some internal resistance – and introduced an alternative employment model. The fact that a top firm of Linklaters’ setup would even consider such a solution feasible – a maximum of 40 hours a week, fixed working times, a significant salary reduction, counsel as a career goal – caused a huge stir in the market. The first associates have already started working under the new model. If it proves a success, other top-flight firms will have to follow suit soon – and Linklaters will have had a crucial head start.
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