The capitulation of the German independent
At the turn of the century something big was happening in Germany. After years proclaiming independence, virtually all of the major firms were suddenly succumbing to the overtures of London practices.
Lovells’ deal with top-10 outfit Boesebeck Droste went live at the beginning of the year, as did Clifford Chance’s merger with top five firm Pünder Volhard Weber & Axter – part of its tripartite combination with US firm Rogers & Wells. Linklaters was edging closer to Oppenhoff & Radler, finally merging in 2000. And Hengeler Mueller stayed close to UK best friend Slaughter and May.
The Anglo-German deal of the year was that of Freshfields with elite German practice Bruckhaus Westrick Stegemann – the only top-tier competitor to Hengeler. Freshfields had already taken over noted Cologne boutique Deringer Tessin Herrmann & Sedemund, but the Bruckhaus deal turned it into a genuine European giant.
The next big catch after Bruckhaus was Gleiss Lutz. Herbert Smith landed the firm as an alliance partner in the autumn. Gleiss had already talked to Freshfields the previous year. Unlike most of the other Anglo-German deals, the alliance – joined by Dutch firm Stibbe – has not moved to full-blown merger.
It was not the first time major UK firms had tried to launch credible presences in Germany. At the beginning of the 1990s many City firms tried, but successes were few and far between. Slaughters even closed its German office in 1995 only three years after opening it.
But the M&A boom at the end of the 1990s (encapsulated by the high-profile hostile bid for Mannesmann by Vodafone) and a more savvy approach from UK firms put them in a much stronger bargaining position.
German firms themselves had undergone major consolidation, with dozens of intra-jurisdictional mergers, many of which thankfully put paid to longwinded monikers. Hasche Eschenlohr Peltzer Riesenhampff Fischotter and Sigle Loose Schmidt Diemitz became Hasche Sigle, which banded with Cameron McKenna in the CMS alliance. Wessing & Berenberg Gossler – itself created from a merger – amalgamated with
Taylor Joynson Garrett to become Taylor Wessing.
However, it was not all a success story, with Norton Rose’s talks with Gaedertz breaking down at the end of the year.
Panel cull of the year
In September Lloyd’s syndicates Brockbank and Hiscox teamed up to purchase legal services. They cut the number of US and UK law firms they use from 250 to 60, intending to have only 50 by November.
The partnership began earlier in the year when Brockbank and Hiscox set up a project to see whether their relationships with firms were productive.
Brockbank solicitor and project head Paul Jaffe did not pull any punches.
“We were using too many firms that didn’t know what they were doing,” he said. “We decided we wanted to build closer relationships with the firms we worked with, but we obviously couldn’t do that with 250.”
In 1999 the combined spend of the two syndicates was £21m, split between the US and the UK.
SJ Berwin sparked a new salary war with rises of up to 25 per cent in February. Newly-qualifieds would receive £45,000.
SJ Berwin’s move fuelled a London trend, which had started after the huge salary increases in Silicon Valley and New York – itself propelled by the rewards available to lawyers that went in-house to investment banks and internet start-ups. In July Macfarlanes also raised its assistant salary rates past magic circle levels to match SJ Berwin.
Matrix Chambers finally opened its doors in April, its launch having been trailed for months. It immediately had 22 barristers, including silks Nicholas Blake QC, Clare Montgomery QC, David Bean QC, Ken Macdonald QC and Cherie Booth QC, and branded itself as a specialist in human rights – just in time for the incorporation of the Human Rights Act that year.
And two that did
Hammond Suddards merged with Birmingham and London practice Edge Ellison.
Hammonds managing partner Chris Jones said: “We want the reputation that Macfarlanes has got.” Macfarlanes partner Vanni Treves responded: “We wish them well, but it’ll be a very long haul.”
Titmuss Sainer and Dechert Price & Rhoads, in alliance since 1994, merged to become Dechert.
Apparently this interwebdealchatroom thing is terribly modern
Allen & Overy and Clifford Chance launched client intranet deal rooms, called Newchange and FruitNet respectively (no, that is not a joke, but Clifford Chance swiftly changed it to Clifford Chance Connect after internal hilarity).
Booming profits, first time round
Slaughter and May partners at the top of the equity easily passed the £1m barrier for the first time, with drawings of £1.2m.
Allen & Overy did not do so badly either, with a handful of partners at the top of the lockstep on £1.08m.
Jonathan Goldstein, Olswang
Jonathan Gold- stein became chief executive of Olswang at the age of 32 in 1998.
In 2000 he capitalised on the technology boom of 1999-2000 with the establishment of a corporate finance house – the first UK law firm ever to do so.
LongAcre Partners was set up as a joint venture with JPMorgan to focus on Olswang’s heritage practice areas of the media, entertainment and information industries. Olswang had a 60 per cent share in the separate limited company; in May 2007 the boutique was sold to Jefferies Group.
Olswang was strongly identified with the dotcom years, but on Goldstein’s watch the firm began to diversify into real estate and corporate. It took on a number of boutiques, including the property and media divisions of DJ Freeman, it opened an office in Germany and concluded a US alliance with Miami firm Greenberg Traurig.
In 2007 Goldstein left the law to join Heron as joint managing director.