Frankfurt-based Punder Volhard Weber & Axster is to be the first German firm to introduce a full-time executive management.
Punder, with the largest Frankfurt office of the German firms, says it has experienced "size-related management problems".
As a result, the firm is abolishing its existing unwieldy partners' council, comprising three managing partners, the head of each department, one partner from each foreign office and a senior partner.
It will be replaced with a management board consisting of one of the existing managing partners - respected figurehead Dr Thomas Gasteyer, partner Peter Naegele, who has been put in charge of marketing and communications, and a non-lawyer "general manager" who will be appointed from outside and given partnership status.
The general manager will join the firm from 1 January 1999 and will act as a chief financial officer. The Lawyer understands that Punder is looking to recruit from a Big Five accountancy firm in Germany for the new position.
Punder has also created a supervisory board made up of five of the most senior partners within the firm. Chaired by partner Irene Thiele-Muhlhan, it will check that the managing partners are doing their job properly.
The consent of the supervisory board would be required before the managing partners could decide on a change of strategy, opening a new office or exceeding the annual budget.
Naegele said: "It is an enormous step forward from the old fashioned European law firm with outdated structures to a professional service firm."