Clifford Chance is to sign up another merger partner, this time in European legal hotspot, Luxembourg.
The proposed merger between the global giant and Faltz & Kremer is currently before the Luxembourg Bar Association. If approved, partners from both firms will vote on the move within the next couple of months.
Faltz & Kremer is the country's sixth largest firm. Its strengths, says managing partner Christian Kremer, are in the arenas of banking, corporate and tax law.
The new firm would be called Clifford Chance Faltz & Kremer. But the merger may face objections from the Luxembourg Bar, which has strict rules on name changes.
“It is not possible to become a partner with non-lawyers. Punders has tax advisers, and provides other forms of service. This is potentially an obstacle,” says an insider.
“Clifford Chance is not looking for the biggest firm as the biggest are not necessarily the best,” says Kremer. “It is a question of quality and reputation and a good footing in the market.
“There are a lot of firms in Luxembourg which have internal difficulties, which can make it more difficult for a firm to integrate in a merger.”
A Clifford Chance spokesman says: “We can confirm that we are in an advanced stage of talks with Faltz about the two firms merging.
“Faltz is a first-rate practice with a very similar culture to Clifford Chance, Rogers & Wells and Punders. Both sides are confident about the outcome of the talks but do not wish to comment further until after the partnership have voted on a proposal.”
Faltz is small in comparison to Clifford Chance's other merger partners, Rogers & Wells and Punder Volhard Weber & Axster.
It has 20 lawyers. However, it will provide a foothold in the Luxembourg banking market.
Until last year, Kremer worked for Luxembourg's largest law firm Arendt & Medernach which, it is believed, started talks with Clifford Chance. These were called off because of conflicts within the Luxembourg firm.
“Arendt & Medernach reflects the possibility of changing and looking for alliances. They can see this is the way forward and are worried the train will leave the station very soon,” says a source from a rival Luxembourg firm.
Linklaters is merging with Loesch & Wolter while A&O is linked with Zeyen Beghin Feider Loeff Claeys Verbeke.