US firms storm German market
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5 September 2013
US firms have made the most impact in the German legal market compared with their UK and German rivals, according to last year's financial results published by Juve Rechtsmarkt magazine.
The German operation of Mayer Brown Rowe & Maw (MBR&M) has seen a 25.3 per cent increase in revenue per fee-earner (RPE) to E1.56m (£1.05m), the highest per cent change in RPE that the market has seen this year.
Its German turnover has increased by 41.1 per cent, from E26.5m (£17.84m) to E37.4m (£25.18m), a particularly impressive achievement given that the firm's worldwide turnover grew by a relatively modest 7.5 per cent. As a result the firm now ranks at 22 when ranked by turnover, jumping four places from last year's Juve40.
The US firm has ramped up its presence through a number of lateral hires, in particular from Ashurst and magic circle firm Clifford Chance. The firm has German offices in Cologne, Berlin and Frankfurt, which have all seen strong activity, particularly in the banking, finance and corporate sectors, but MBR&M German managing partner Reinhart Lange said the Frankfurt office is the "engine for our German operation".
Lange told The Lawyer: "We've attracted high-value work and our international platform has given us more access to different areas of work."
Weil Gotshal & Manges has slipped one place to nineteenth, but the US firm continues to grow. This year saw it post a turnover of E49m (£32.99m), up by just 2 per cent on the previous year, but revenue per equity partner (REP) rose by an impressive 14.9 per cent to E6.13m (£4.13m).
While several other US firms are busy recruiting, and indeed while Weil's London office has been busy doing the same, Weil in Germany is more conservative. Germany managing partner Gerhard Schmidt said: "We prefer to generate our own business rather than buy it. We have a large portfolio of existing clients and the next six months are going to be super-busy as we have several very large transactions in the pipeline."
Although this year has been tough for Baker & McKenzie after losing a number of rated partners to Latham &Watkins and other US firms, it has still managed to cling on to tenth position, posting a turnover of E92.2m (£62.1m), up by just 2.2 percent from E90.2m (£60.73m).
Other US firms wanting a piece of the German action are Skadden Arps Slate Meagher & Flom (turnover E30m (£20.2m)) and Hogan & Hartson Raue (E 18.7m (£12.59m)), which have stormed into the Juve chart, bagging the 28th and 41st places respectively.
Magic circle firms Freshfields Bruckhaus Deringer and Clifford Chance, meanwhile, have maintained their positions as leaders of the pack and are non-movers at first and second place with revenues of E322m (£216.8m) and E174m (£117.15m) respectively.
However, rival magic circle firm Linklaters, with its turnover rising by just 10 per cent to E168m (£113.11m), has failed to keep pace with Germany's largest firm Hengeler Mueller.
There are still just three German law firms in the top 10. In addition to Hengeler, CMS Hasche Sigle remains in fifth place, posting a turnover of E160m (£107.73m), and Gleiss Lutz is seventh with a turnover of E104m (£70.02m).
Meanwhile, German firm Beiten Burkhardt has seen a steady rise in growth since its split from former merger partner KPMG. It boasted a terrific 19.6 per cent rise in turnover, from E58.6m (£39.45m) to E70.1m (£47.2m) and a REP of E1.6m (£1.08m).
The firm has also branched out its operations in Central and Eastern Europe by doubling its office space in Moscow and launching a new office in Kiev.
While Allen & Overy's (A&O) German operation has not yet managed to follow its fellow UK magic circle firms into the top 10, remaining in the latter half of the top 20, its turnover per fee-earner has increased by an impressive 22.2 per cent, boosting RPE to E533,000 (£358,860).
Norton Rose has witnessed the biggest increase in turnover per equity partner, which has increased by an astonishing 55.2 per cent to E2.38m (£1.6m) with an overall increase in turnover of 24.2 per cent to E19m (£12.79m).
Since Hasche Sigle took over Norton Rose's Cologne office in early 2005, the firm's German operation has grown steadily, particularly in the finance and insurance sectors.
This year the Frankfurt office was bolstered by the hire of three partners coming from magic circle firms A&O and Freshfields and US firm White & Case.
A newcomer to the chart is DLA Piper, which bursts onto the scene at number 44, posting a turnover of E14.7m (£9.9m). The firm first launched in Germany in Cologne back in 2004 and now has bases in Hamburg and Frankfurt following raids on Coudert Brothers and Luther Menold. But, as with all things DLA Piper, the firm does not intend to stop there.
As first reported by The Lawyer (26 June), the firm remains ambitious, with German managing partner Ulrich Jungst confirming that DLA Piper is looking for an opening in Munich.