Eversheds finally gets German friend after Teutonic torment

It has been a search that has straddled millennia, but Eversheds has finally found a friend in Germany that it can call its own.

While jumping into bed with a firm that is only six months’ old may look a little bit desperate, the German firm it has ended up with – Munich’s Heisse Kursawe Rechtsanwälte Partnerschaft – is a solid outfit. It has good clients such as Bayerische Hypo-Vereinsbank, Munich Re and Expedia and the firm does all of Burger King’s German work.

Heisse Kursawe was formed last November from the wreckage of Arcon, a demise which did not surprise anyone. While all of the firm’s offices were respected, they were never fully integrated. When Heisse Kursawe managing partner Matthias Heisse provoked an argument about the need for an international alliance, the fragile inter-office affiliation was shattered.

Heisse Kursawe is the Munich office of what was Arcon. The other offices mutated into two separate firms, Avocado and Sibeth. Heisse immediately set about finding an international ally and his first port of call was his old mate Carsten Rumberg, the head of Eversheds’ German business group.

Eversheds has endured a whole load of heartache in Germany. It has generally sought out smaller firms which it hoped would grow. Görg was approached when it was just a small firm. Eversheds also flirted with Schmidt von der Osten & Huber, but was far too heavy-handed.

“At the time, the agenda of British law firms in general was to go for a merger, but during our earliest talks with a German firm, Görg, we didn’t discuss merger because it just wasn’t on the agenda,” says Eversheds chairman Alan Jenkins.

Gaedertz actually voted to join Eversheds in 1999, but influential partners who chose not to vote for the tie-up mobilised support against the UK firm in the second ballot. Norton Rose also failed to secure a merger with Gaedertz and the German firm subsequently splintered into its constituent offices.

The break-up of Gaedertz mirrors the dissolution of Arcon and is an indication of why UK firms in general, and Eversheds in particular, have had difficulties with the German market.

Traditionally, German firms have operated as a loose collection of affiliated offices, with each location having a distinct client base and culture. When talking of the firm’s travails in Germany, one Eversheds partner even compared German firms to barristers’ chambers. “You get a couple of partners who are uneasy and then they kibosh the whole deal,” he said.

Jenkins was in charge of the firm’s international strategy before he was made chairman in February 2004. While he has gradually built up the firm’s network, Germany has been a real nightmare for the last two years.

In 2003, talks with Cologne’s Cornelius Bartenbach Haesemann & Partners came to nothing. But Jenkins kept doing the rounds and the partnership had high hopes for KPMG’s former ally Beiten Burkhardt. There was a feeling that Beiten would slot in nicely, having already had experience of being part of an international network, but Eversheds got the signals all wrong.

Beiten never wanted a formal alliance with a UK firm, merely best friends relationships with a number of UK firms. It ended up with both Berwin Leighton Paisner (BLP) and Eversheds, which were both vying for an exclusive tie-up, as well as Dickinson Dees and Maclay Murray & Spens. That Eversheds should end up with a former Arcon firm is ironic considering BLP was keen to secure a deal with Arcon before it disintegrated.

There is a school of thought in Germany that Eversheds has always tried to secure a merger with indecent haste. In recent years, the firm has been more committed to a close alliance of firms which retain financial and managerial independence from one another. That has been crucial in finally sorting out Germany and also Eastern Europe, where the firm has recently expanded.

Jenkins denies a change of approach but characterises the firm’s strategy as “evolutionary” and “pragmatic”. Notably, he does not rule out further mergers. “Our Danish office began as an association and six or seven years later it made financial sense to merge,” he said. “That could still be the case in the future with other offices.”