Linklaters in German partnership cull” />Freshfields Bruckhaus Deringer and Linklaters have both shaken up their German partnership to deal with underperformance and overpartnering.
Linklaters has taken the most radical steps after implementing plans first revealed in The Lawyer (28 June) to reorganise 19 German equity partners.
Freshfields has opted for a a softer approach, but has acknowledged that the core German corporate/M&A practice is overpartnered. In response, the firm has moved three partners from corporate into finance and litigation.
Sources say the firm is also encouraging early retirement among some of the older German partners. Freshfields partner Manfred Finkin claimed that a recent spate of early retirements were for “reasons of work-life balance”.
German publication Juve reported last week (22 July) that Linklaters had completed its review of the German partnership, freezing 10 partners at their current position on the lockstep, making five of counsel and asking a further four to leave.
In a strategy document entitled ‘Clear Blue Water’, the firm also plans to increase the time recording targets for its German partners.
Currently, the target is seven hours a day, but this will go up to 10, of which a minimum of 80 per cent should result in chargeable time.
Juve reports that employment was Germany’s most profitable practice in 2003-04, with partners bringing in £51,000 per equity point, compared with litigation and real estate, which notched up £26,000 and £13,000 per unit respectively.
However, M&A was equally profitable in Germany and London, bringing in £30,000 per point; average profitability at the firm is £36,000 a point.
Michael Lappe, German sernior partner, said: “We’re discussing individual remuneration and status with some partners; we’re talking to a very small number of partners about leaving the firm. The talks are confidential and ongoing. Our goal is to attract and retain the best clients and lawyers to achieve market leadership in Germany.
We want to give our best young lawyers the ability to become partners.”