At The Lawyer’s 2016 European Awards, Flick Gocke Schaumburg (FGS) took the title of German law firm of the year, fighting off stiff competition from the likes of Gleiss Lutz, Hengeler Mueller and 2015 champion Noerr.
FGS is tax-focused and Bonn-headquartered, which means its strategy differs in many ways from the likes of Hengeler and Gleiss Lutz.
Each of the shortlisted firms shows no signs of moving away from their independent model, despite increasing competition from the global players in the market.
Flick Gocke Schaumburg (FGS)
FGS, The Lawyer’s 2016 German firm of the year, had a strong financial 12 months and increased its turnover by 11 per cent to €112m, as well as expanding its staff numbers by 10 per cent.
The headcount increase was largely due to the launch of a new office in Hamburg, the firm’s fifth base overall in Germany. Existing locations include Berlin, Frankfurt and Munich, with partners Arne von Freeden and Johannes Baßler relocating to lead the Hamburg office from Bonn. It’s only non-German offices are in Vienna and Zurich.
The Hamburg launch saw FGS pick up 20 partners, lawyers and staff. Offices have been a major focus in the past 12 months
The Hamburg launch saw FGS pick up 20 partners, lawyers and staff to give its clients a better service from northern Germany. Space and offices have been a major focus for FGS in the past 12 months, with the firm also relocating in Berlin and moving into bespoke, brand new offices in Bonn.
Strategically, FGS also looked at its internal structure last year. The new structure saw the introduction of a strategy committee, which focuses on overall firm strategy as well as practice and business development and cross-departmental initiatives.
Meanwhile an administrative committee consisting of partners and administrative staff oversees operational issues.
Key deals
Bayer and Covestro IPO
Partner Andreas Schumacher was instructed to provide tax advice to longstanding client Bayer in relation to the initial public offering and €1.5bn raising of plastics business Covestro.
Die Welt and N24 merger
In Berlin, FGS partners Florian Kutt and Christian Pitzal were appointed as the main tax advisers to multinational media corporation Axel Springer on the merger of German national newspaper Die Welt and TV news channel N24.
Planned spin-off of parts of EON’s energy businesses
EON called on FGS to advise it on the tax aspects of a planned spin-off of its conventional energy business. Partner Thomas Roedder was instructed as EON sought to combine its businesses in a new company and spun off to shareholders.
Gleiss Lutz
Similar to Hengeler Mueller’s best friend set-up, Gleiss Lutz has a non-exclusive referral network and has been busy putting it to great effect over the course of 2015.
The regulatory hub allows the firms to deal with the ECB’s increasing role and challenges generated by the SSM
Along with Chiomenti, Cuatrecasas Gonçalves Pereira and Gide Loyrette Nouel, Gleiss Lutz has launched a joint focus group in Frankfurt for regulatory issues after the introduction of the Single Supervisory Mechanism (SSM).
As a result, the European Central Bank (ECB)has become the cornerstone of the banking supervision system.
The regulatory hub allows the firms to deal with the increasing role of the ECB and challenges generated by the launch of the SSM.
Additional focuses of Gleiss Lutz this year include growing the firm’s finance practice and compliance and internal investigations group.
Key deals
EON
Gleiss Lutz advised EON in Düsseldorf on the sale of its Italian-based energy generation capacity compromising its coal, gas, hydro and solar plants.
Goldman Sachs
Multinational finance giant Goldman Sachs announced two of the largest venture capital financing rounds in Germany last year. Gleiss Lutz advised on deals involving online eyewear retailer Mister Spex and the online baby products shopping site Windeln.
TRW Automotive
The firm worked with the US global supplier TRW Automotive in its cross-border merger with ZF Friedrichshafen. Under the terms of the transaction, ZF in Baden-Württemberg acquired all shares of Michigan-based TRW for around $13.5bn.
Graf von Westphalen (GvW)
Across the year, GvW has made some key hires to its German M&A team, restructuring practice and energy group. Some of the new recruits have a particular focus on nuclear law, including Berlin-based Gerald Hennenhöfer, who took the lead in the nuclear exit for Angela Merkel’s German government.
GvW has a growing practice in China and continues to take advantage of inbound and outbound work in the region
The firm has a growing practice in China and continues to take advantage of both the inbound and outbound work coming out of the region. A total of four new lawyers have joined the office recently, including partner Oliver Maaz, who joined from Rödl & Partner’s Shanghai office.
GvW is also part of a network – namely the SCG Legal network, established in the US. This enables it to pick up new clients as they enter the German market. In return, GvW refers German mid-size companies that invest throughout the world to its network partners in other countries.
Key deals
AAR Corporation
GvW represented the publicly listed AAR Corporation in connection with the sale of the Telair Cargo Group for a purchase price of up to $725m.
Venn Life Sciences Holdings
When Venn Life Sciences Holdings announced its cross-border acquisition of CRM clinical trials last year, it turned to a team from GvW for advice.
Hengeler Mueller
Internal issues play a big part of Hengeler Mueller’s strategy, which has remained virtually unchanged for years.
The firm has been making ongoing efforts to boost diversity, despite its partner numbers staying static at 90 and including just five women – a proportion of 5.5 per cent. The firm is involved in the best friends women’s initiative and has further enhanced its flexible working arrangements for female and male employees, including part-time work, sabbaticals and parental leave.
Both the family support and the set of flexible working arrangements have led to an increasing number of associates asking for flexible models or taking parental leave.
On the transactional side, Hengeler continues to focus on big-ticket work. The longstanding non-exclusive relationship between Hengeler, the UK’s Slaughter and May and fellow European firms Bonelli Erede Pappalardo, Bredin Prat, De Brauw Blackstone Westbroek and Uría Menéndez continues to flourish, with the group advising Coca-Cola and Magna International on €1bn transactions over 2015/16.
Key deals
Coca-Cola combination
Hengeler Mueller advised Coca Cola Enterprises on its combination with Coco-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke to create a new company called Coca-Cola European Partners.
RWE reorganisation
Last August, the supervisory board of RWE approved its reorganisation, which will result in a large part of the RWE Group of companies being merged. Hengeler is advising RWE on this corporate reorganisation.
Magna’s acquisition of Getrag
Teaming up with BonelliErede and Slaughter and May, Hengeler Mueller advised automotive supplier Magna on its acquisition of Getrag for €1.75bn.
Noerr
Noerr re-elected its co-managing partners Tobias Bürgers and Alexander Ritvay at the start of 2016 for a further three years. The reappointment signals the firm’s confidence in its overall strategy, which was first set out in 2009.
This year, the firm has placed a focus on its New York office, with Sascha Leske taking over
This year, the firm has placed a focus on its New York office, with Sascha Leske taking over as head of Noerr’s US home. In New York, Noerr will focus much more strongly on advising institutional finance investors, as well as banks and financial service providers on their European and German M&A transactions.
There has been a strategic focus on work in Central and Eastern Europe region, while continuing to work on big-ticket domestic work in Germany. A total of 70 per cent of the M&A deals on which Noerr has advised on since 2008 have been cross-border, taking advantage of its own offices, strategic partner law firms and the Lex Mundi network.
Key deals
Finland’s Elektrobit Group
Noerr’s London office assisted in Elektrobit Group’s sale of its automotive division to Continental for around €600m.
Cemex
Noerr advised building materials suppliers Cemex on an international shareholding exchange with its competitor Holcim.
How the leading money-earners compare
In The Lawyer’s European 100, Germany continued to be Continental Europe’s largest legal market with 17 firms in the list, the same total as the year before. Their combined revenue was €1.75bn. Since 2014, the figure has grown 5.4 per cent from €1.66bn, with several firms reporting stable or slightly lower revenue in 2015.
A number of German firms had a strong 2015 and saw significant revenue growth. Both Heuking Kühn Lüer Wojtek and Noerr continued a run of consistent growth, with turnover up 8.8 per cent and 5.3 per cent respectively.
It is estimated that Hengeler Mueller has the highest average revenue per lawyer in Germany and indeed the European 100
Luther also reported growth of 6 per cent, while multidisciplinary giant Rödl & Partner says its legal services revenue has risen by 10.8 per cent, the fastest increase among all of Germany’s European 100 firms last year.
Twelve firms out of the 17 provided financial data but Hengeler Mueller, Gleiss Lutz, Görg, FPS Fritze Wicke Seelig and Heussen did not.
Though it did not provide financial figures, it is estimated that Hengeler Mueller has the highest average revenue per lawyer in Germany and indeed in the entire European 100. This was estimated at €955,000 last year, with average revenue per partner (RPP) of €2.67m. Only seven German firms reported or were estimated to have RPP over €1m in 2015.
Germany is one of the weakest jurisdictions when it comes to diversity. In 2015, 12 of the 17 firms had a female partnership proportion of less than 15 per cent, and women represented less than 10 per cent of the partnership in six firms. The standout performer was Rödl & Partner, where women represent 34 per cent of its partnership of lawyers and tax law advisers.
Hires and departures
According to The Lawyer’s European 100, Noerr was the most active independent firm in Germany over 2015. It reported hiring two equity partners, nine associated partners and a senior associate, and lost just one partner, with Munich healthcare partner Boris Handorn moving to Simmons & Simmons in September.
Clifford Chance saw the most movement out of its ranks last year, mainly in Germany, where 10 partners left for other firms. The German departures followed a review of the magic circle firm’s operations there in late 2014, but included heavy hitters such as private equity head Oliver Felsenstein, who quit for Latham & Watkins in February.
Partly because of the departures from Clifford Chance, lateral hires of partners and other lawyers shot up in Germany during 2015. Out of 374 hires reported to The Lawyer over the year, 93 were in Germany – almost 25 per cent of the total. This compares with 60 German hires in 2014, or 19 per cent of those reported.
The US firms contributed vastly to the number of lateral hires and departures in Germany in the past year, with various openings being announced in 2016. K&L Gates opened in Munich after hiring a team from King & Wood Mallesons, while Gibson Dunn & Crutcher took partners from Freshfields Bruckhaus Deringer and Latham as it opened in Frankfurt.
The biggest players in German M&A
Hengeler Mueller was the most active independent firm in the first half of 2016, acting on 32 M&A deals with German involvement. Despite acting on more transactions than any other firm, Hengeler is nevertheless ranked in 13th place according to Thomson Reuters’ rankings for the region, working on deals worth $5.4bn.
Clifford Chance tops the table, working on 26 transactions valued at an impressive $74.7bn. The magic circle firm has picked up a number of mandates for German targets this year, acting for robot maker Kuka on its sale to Chinese-headquartered Midea. Freshfields Bruckhaus Deringer represented the acquirer in the deal and is ranked sixth in terms of M&A deals with a German involvement, having worked on 26 transactions worth $35.4bn.
US firms feature heavily in the M&A rankings for Germany, with Cravath Swaine & Moore and Wachtell Lipton Rosen & Katz ranked in second and third places respectively.
The two worked on just three deals each, but the transactions were valued, respectively, at $67bn and $65bn in total.
Wachtell won a lead role on the proposed billion-dollar merger between German pharmaceutical giant Bayer and agricultural giant Monsanto for $62bn.
The transaction has since been put under pressure, however, with Monsanto recently rejecting Bayer’s increased offer.
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