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25 February 2014
It's always the quiet ones you have to watch.
After 10 years in Germany, Cleary Gottlieb Steen & Hamilton has not only scooped one of the country's pre-eminent antitrust partners, Linklaters Oppenhoff & Radler's Dirk Schroeder, but has also decided to open a second office in Cologne.
It is only the second time that Cleary has gone down the lateral route in Germany.
Its first attempt in 2000 was tax partner Gottfried Breuninger. Also from Linklaters Oppenhoff & Radler, Breuninger left less than a year later for Shearman & Sterling, due to a client conflict situation.
But although the hire of Schroeder - and with him junior antitrust partner Romina Polley - is undoubtedly big news, the fact that Cleary is expanding into Cologne is likely to have a bigger impact on the German legal sector.
At first Cologne seems like an odd choice for Cleary. As one legal expert described the move: "It's like Slaughter and May opening an office in Birmingham."
Düsseldorf, the industrial centre of Germany, would have been the natural step for a firm that has already built a very successful capital markets practice from its Frankfurt office.
But this is a moot point: practically speaking, Cologne is only 20 minutes away from Düsseldorf. You only need look at Shearman & Sterling's German operation to see that quality rather than location should be the primary motive for growth.
After all, when Shearman took a group of partners from corporate boutique Schilling Zutt & Anschutz in May 2000, their Mannheim base was not exactly construed as the most "happening" of regions. But it hasn't done Shearman any harm.
But what exactly is Cleary trying to achieve with the Cologne branch? It would be a mistake to assume that the US firm is just going to focus on antitrust matters.
True, the Federal Antitrust Authority, or Bundeskartellamt, is located nearby in Bonn - increasingly important as Europe moves away from EC centralisation - and antitrust and competition partner Wolfgang Knapp is relocating from Cleary's Brussels office to Cologne.
But first and foremost, this is a drive into M&A, and for this reason, Cleary's rival law firms should be extremely worried. Two of the firm's star partners Thomas Buhl and Stephan Barthelmess will be splitting their time between Frankfurt and Cologne. And although Barthelmess is an antitrust expert, he also acts on M&A and private equity deals.
Now Schroeder and Polley have whetted Cleary's appetite for hiring, corporate laterals for Cologne cannot be that far behind. It is highly possible that Linklaters could find itself the target of more partner losses, while Freshfields Bruckhaus Deringer would do well to keep a close eye on its corporate partners.
Cleary is not a firm that takes a decision lightly and when it pounces, it pounces with purpose.