A View From Berlin

In Germany, the days of the Bonn Republic now seem like a distant memory. The market town on the Rhine, whose only claim to attention is that Deutsche Telekom insists on maintaining its headquarters there, can return to being a sleepy settlement. It is now known only as being the short straw for a few federal institutions, such as the Antitrust Office, which were forced to move from Berlin as recompense.

All eyes are now on Berlin. Its skyline has become a natural backdrop for newsreaders; every other police drama includes a chase scene through the Tiergarten; the Reichstag has been transformed from an embarrassing historical monument to the icon of a liberal, self-confident democracy.

Is it any wonder then that foreign law firms with a regulatory practice see it as natural to set up there? Frankfurt remains the undisputed financial capital, but many lawyers from outside imagine an office in Berlin as having a finger on the regulatory and lobbying pulse of the nation. Both Mayer Brown & Platt and Coudert Brothers have had an office in Berlin since reunification, and Wilmer Cutler & Pickering is also well established.

But it is the arrival of Hogan & Hartson, through its poaching of a whole team of Oppenhoff & Rädler lawyers, that has interested and bemused competitors. “Just because they are a Washington firm doesn’t mean they should be in Berlin,” remarks one Clifford Chance Pünder lawyer. “It remains to be seen whether Berlin can produce the sort of profitability that US firms demand.”

But Berlin has a unique market. It is characterised by its detractors as being ridden by low-level corruption (the Berlin “Filz”). Nowadays, though, its supporters point out that the fall of the wall ended Berlin’s island status in the middle of the German Democratic Republic, opening it up for investment and allowing a fresh wind to blow through its corridors of influence.

The wider economy, and not just the construction industry, is now the focus of the legal market, and the currency of contacts to politicians and local authorities is sinking fast. Instead, a Berlin office is now a site from which national advice can be offered in almost any area (other than banking and finance), and as such it is looking more and more like Düsseldorf or Munich, a location where law firms work from rather than just work in.

Most notable in this economic upturn has been the rapid growth of the high-tech and new economy in the city. The reason? More and more highly qualified young people want to live and work in Berlin. After life in the pleasant but mundane regional cities, they are moving to Germany’s one true metropolis. Once there, they find not only the most cosmopolitan scene in the country, but thanks to the migration of older inhabitants into the new hinterland around the city, a benevolent housing market which throws up fantastic accommodation. It seems lawyers are not immune to such attractions. One partner at a leading firm said they receive twice as many applications for Berlin as anywhere else, and a well-known Hengeler lawyer even claims that he never would have joined Germany’s top firm had it not been for the Berlin office.

Hogan & Hartson might, then, have unintentionally moved at the right time. No doubt it was mostly interested in the outstanding telecoms work, brought from Oppenhoffs by Christoph Wagner; but the experienced Berlin lawyers who have come with him could provide the basis for strong full-service growth if the migratory trend continues. Berlin shows what can be done when German law firms invest resources in a project. They have achieved what UK and US firms set out to do in the rest of Germany, partly because international firms have ignored Berlin’s potential. Hogan & Hartson might be a sign that this is changing. Maybe Berwin Leighton should take a look.

Aled Griffiths is the editor of German legal magazine JuVe Rechtsmarkt.