Technology, media and telecoms
9 July 2001
Since then, the vocabulary of monopoly in the legal market has been starkly depleted. An increasing number of companies, including Deutsche Telekom, have recognised that by introducing something akin to a panel system, two goals can be attained: better service for specialised questions and blocking law firms for the competition.
Colt Telecom, for example, used to instruct predominantly Joachim Scherer of Baker & McKenzie, who is widely regarded as the father of telecoms law in Germany. But recently Colt has admitted other firms onto its list, including Coudert Schürmann, which last year gained ex-Bruckhaus lawyer Holger Neumann and who, together with Markus Bauer and corporate partner Rainer Jacob, has built up a strong, all-round telecoms team.
Even the best-known exclusive relationship in the market - between Bruckhaus (or rather Thomas Tschentscher, one of the top telecoms lawyers in the country) and Arcor (the second-biggest provider, now part of Vodafone) - has been undermined by the appearance of others on the substitute's bench. Kornelius Kleinlein, in the Berlin office of Linklaters Oppenhoff & Rädler, has represented Arcor in a number of regulatory proceedings.
But telecoms companies are also asserting their independence by forgoing outside counsel to a degree that was unthinkable only a year ago. The days when a small clique of telecoms lawyers could treat the courts as their second home are gone. The large providers now often go unaccompanied into the next round of sparring with the incumbent over deregulation issues. Not only do they undertake more work in-house, but law firms are asked to focus on background advice, while the companies themselves appear in public to argue their cases.
There is only one private practice lawyer still visible: Thomas Mayen, a partner at Bonn administrative powerhouse Redeker SchöDahs & Widmaier, who for years has undertaken the substantial portion of regulatory work for Deutsche Telekom. But Deutsche Telekom has also worked with a number of other firms. Pünder Volhard Weber & Axster was instructed on finance questions and a series of equity offerings long before the merger with Clifford Chance. A number of Gaedertz offices advised Deutsche Telekom on antitrust and some regulatory issues. Ever since Deutsche Telekom started its acquisition and disposal tour, it is Hengeler Mueller, through Christoph Jäckle, who has been advising the ex-monopolist. The past month has seen the closing of the huge cable network sale to Liberty and Klesch (advised by Freshfields Bruckhaus Deringer).
Deutsche Telekom has been particularly successful in blocking firms working for the opposition, but the private sector companies have been more tolerant. They may display a sceptical attitude as to the efficacy of Chinese walls, but they have accepted it through clenched teeth. There is simply a restricted number of firms which come into question, be it now or in the foreseeable future.
But there is some market movement through the departure of well-known telecoms lawyers from the larger firms. Conflicts led to Sven-Eric Heun leaving Clifford Chance after the merger with Pünder, and he now advises clients such as MCI Worldcom at Willkie Farr & Gallagher. The firm sees its future as linking technology expertise with corporate and finance strength. Its success depends on its ability to recruit experienced corporate finance lawyers over the next year.
It is this combination that Allen & Overy achieved. Already the leading telecoms finance practice in Germany, it shocked the competition and became an all-round player by poaching Helge Schäfer and Mark Hoenike from White & Case Feddersen, opening especially in Hamburg for the purpose.
Clearly, this is where the future lies. Interconnection agreements will continue to bring substantial amounts of regulatory work over the next year, but in the medium term, German telecoms work will be transaction and finance related. The universal mobile telecommunications system (UMTS) licences alone cost the licensees almost euro50bn (£30bn) and this is going to have to be refinanced. Everyone also expects further consolidation and insolvencies in the thicket of the land-line market. When it comes to client relationships, 'exclusive' may no longer be applicable, but 'full service' is still necessary.
Astrid Gerber, publisher of JuVe Rechtsmarkt