Can A&O's new German chiefs bring the firm together?
20 January 2003
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German lawyers are supposed to resist management, so can the new team at Allen & Overy (A&O) impose order out of creative chaos?
A&O's management style in Germany is beginning to have a familiar look about it - senior partner Arndt Overlack, the avuncular elder statesman whom few partners would want to upset; and two paces behind, the managing partner as hard man, Cornelius Fischer-Zernin, whom few partners would dare to cross. It is a good cop, bad cop routine as hackneyed as it is effective. You can imagine Fischer-Zernin softening up any potential prima donnas in Frankfurt and Hamburg until they are putty in Overlack's hands.
Overlack does indeed bear comparison to Guy Beringer - the corporate lawyer in a traditional banking firm, silver-haired, softly spoken. After leading half of the Schilling Zutt & Anschütz partners into the open arms of A&O three years ago, and away from the lure of Shearman & Sterling, Overlack fell easily into the role of Frankfurt figurehead. If there were to be a senior partner to fill the shoes of former German chief Mark Welling, there were no other serious candidates.
But how the management as a whole would look after Welling had gone was a matter of debate in Germany. It was clear that it was time for the partnership in Frankfurt and Hamburg to shape their own destinies. But with a partnership composed mostly of lateral hires (some like Fischer-Zernin and Helge Schäfer had only been at A&O for 18 months), it was not clear who would have to do the dirty work.
The London management asked Schäfer to conduct a wide-ranging corporate governance review, the result of which was all too familiar: no one wanted to give up client work for good, and most of the partners who had been at the firm for some time (Johannes Bruski, Neil Weiand, Peter Stenz) were either still too young or too important as fee-earners to devote their time to management. It was therefore after soundings among the partners that the names of Overlack and Fischer-Zernin were put forward to London - the names that Schäfer had recommended in any case.
But the new management was only one issue. Welling's most important legacy for A&O Germany can not only be witnessed in the success of the practice groups and lateral hires. Over four years he built up an administrative infrastructure in Germany that reflects the firm worldwide. Considerable investment was made in non-fee-earning professionals for property, IT, HR and marketing, to the extent that there are some murmurings from the German partnership that the ratio of lawyers to support staff is askew. There are more of the latter than the former, although the goal is to reach an equilibrium in the short term.
The charitable view is that A&O thus has the structure in place to support strong growth on the fee-earner side - in its brand new tax department alone the plan is to recruit another 10 or so lawyers over the next year to support the recently recruited four-man team led by Eugen Bogenschütz, which came from Haarmann Hemmelrath.
Since the build-up of such a bureaucracy is supposed to allow lawyers to get on with client work, it is ironic that there are sometimes complaints from some lawyers about being disenfranchised. The A&O offices, blessed with being constructed from scratch, displays how the management system should work. Good lawyers - and especially good German lawyers - seek autonomy. Here they get sovereignty of practice and are freed from the burden of humdrum administration if they forgo their rights to argue about the colour of every new carpet tile. Subscribe to the law, win your freedom. Looks like it is the Brits who have been reading Kant, while many German firms are fumbling around in an empiricist decide-as-you-go gloom.
No one should underestimate such change in German law firms. It is a revolution of Copernican scope. As most managers know only too well (and Overlack and Fischer-Zernin are either too modest or too new in the job to say it themselves), the process of listening and consensus-building rarely leads to a result different from that which the management and other non-legal professionals intended in the first place. What that means in practice is that the A&O partners in Germany have been involved to the extent that they will not be able to complain about it later.
But balancing the need for entrepreneurial partners and management structures is a precarious business, and being freed of administrative duties does not allow the partner to forget their internal responsibilities. Although no lawyer likes to admit it, A&O is a highly political machine. London partners point out that the German lawyers need to brush up on the rules of the game.
One who knows the German practice gives the example of the 2001 partner elections. "The reality is that partners have to lobby their colleagues to push through candidates," he says. "This is a natural development after the partnership moves beyond a certain size, with offices in many different countries. You cannot know every associate, so you listen to your partner. Those associates who don't have a partner speaking for them have little chance."
That a new, hard-boiled management at A&O in Germany has emerged is in any case deceptive. Some London lawyers think that it is the German partners as a whole who are going to have to toughen up.
Aled Griffiths is editor of JuVe Rechtsmarkt