In Germany’s decentralised legal market, different cities have their own attractions for local and international firms looking to open an office
Germany’s legal market is unique in Europe in being particularly decentralised. Whereas Paris is the only place to be for French corporate law, and Milan and Madrid keep most of the work in Italy and Spain, in Germany there is a choice of several cities where a valid reason can be found to open up.
Each has its own attraction, and although most firms argue that it is possible to do national work from any location, the individual cities retain local characteristics.
In the following pages we take a look at the attributes of Germany’s leading legal centres.
Population 1.8 million
Hamburg is Germany’s key port city, which makes it a trade gateway. It has been a popular destination for law firms in the past few years, with no fewer than eight opening offices since 2010.
The city is the location of German firm Graf von Westphalen’s (GvW) largest office, which has more than 50 lawyers located there. Corporate partner Ritesh Rajani says that while Hamburg is a full-service office it has, by virtue of its location, a strong foreign trade practice.
“The connection between the UK and Hamburg is strong,” he says, adding that a significant portion of his work has been for UK clients.
But there is more to Hamburg than trade. The city and the wider region is home to many SMEs and family-owned businesses.
“The SME is the backbone of the German economy,” adds Rajani. “We have a strong client base, with wealthy people and the
SMEs in northern Germany.”
He explains that the sector is providing significant legal work, with issues such as succession planning top of the agenda.
“After the boom years people have realised there isn’t that much high-end business in Germany,” Rajani says, predicting a rosy future for Hamburg. He adds that companies based in Hamburg are also looking at investment overseas, prompting firms like GvW to spend time and effort building foreign investment practices focusing on regions such as China and India.
Population 3.5 million
Germany’s capital has never had the status of a legal capital compared to its counterparts in countries such as France or the UK. Nevertheless, it appears to be picking up fans in the legal market as it develops as a centre for technology and innovation.
MoFo corporate partner Christoph Wagner says the German launch was more a question of finding the right people. But he believes Berlin’s emerging digital economy is a driver for the future.
“No other German city has come close to what Berlin has accomplished in the past five years,” says Wagner. “It’s created an international community of investors and creative people involved in start-up businesses.”
Görg corporate partner Roland Hoffmann-Theinert, who is based in Berlin, agrees that digital work is an up-and-coming area, stopping the ‘brain drain’ to other parts of Germany.
“The industry will attract intelligent, well-educated people,” says Hoffmann-Theinert.
He adds that Berlin’s status as the capital city remains key.
“Proximity to government is important for firms,” he says.
Wagner concurs. “In Berlin you have access to decision-makers,” he notes.
Population 1.4 million
Recent office launches: Field Fisher Waterhouse, Olswang, Orrick Herrington & Sutcliffe (2011), Pinsent Masons (2012), Lefèvre Pelletier & Associés, Quinn Emanuel Urquhart & Sullivan, Simmons & Simmons (2013)
Munich, says Gleiss Lutz managing partner Rainer Loges, is a relatively young legal market. Many firms only opened offices there in the early 2000s.
The city is a corporate centre, hosting the HQs of six DAX 50 companies – Allianz, BMW, Infineon, Linde, Munich Re and Siemens. IP and biotechnology work flourishes, and lawyers praise the region’s government for being “pro-business”.
Noerr co-managing partner Tobias Bürgers notes that Munich also has its fair share of family-owned enterprises. He says for Noerr, which was founded in Munich in 1950, the city remains an important source of work and adds that instructions from elsewhere in Germany also come via Munich.
Bürgers says the importance of the city is underlined by a number of recent openings by German and international firms, and he is confident the legal market will grow.
Loges is equally confident, and adds that Munich is a good place to live, with a strong economy.
“It’s an interesting place for business, and therefore an interesting place for law firms,” he concludes.
Population 0.59 million
Glade Michel Wirtz is one of the few German firms based in only one city. When the firm spun out of Taylor Wessing in 2007 it chose to locate in Düsseldorf in Germany’s industrial heartland, the Ruhr Valley. The corporate and competition boutique feels no need to be anywhere else, since its main client base is in the immediate vicinity.
Corporate partner Achim Glade points to the recent launches of German, UK and US firms in Düsseldorf as proof of the city’s importance. But he believes this recognition has been slow in coming and says that the city did not hit the national consciousness of the legal market until 2007. In that year, both Allen & Overy and Linklaters opened in Düsseldorf, and Beiten Burkhardt amalgamated its Cologne and Düsseldorf offices into the latter.
“Most of our work is for corporates,” says Glade, pointing to locally based businesses such as pharmaceutical and household products companies Bayer and Henkel, as well as energy giants including Eon and RWE.
“There are many market-leaders,” Glade adds. “Assuming the economy doesn’t dive, the region will stay strong.”
But he says Düsseldorf is also a good place to do national work. A high-speed rail link and a nearby airport make it possible to do business day trips to most
For a firm such as Glade Michel Wirtz, Düsseldorf also offers the attraction of being a national centre for antitrust work. While the Federal Cartel Office
is based an hour away in Bonn, the courts that are used to challenge the decisions that office makes are in Düsseldorf. Accordingly, law firms specialising in competition work are often present in the city.
Population 0.33 million
No recent office openings
The former capital of West Germany, Bonn is not on the radar of most law firms. The largest outfit in the city is Flick Gocke Schaumburg, founded by two Bonn-based lawyers and now fielding 350 staff. The firm has since expanded into other German cities, with a further 100 lawyers or so in cities including Berlin, Frankfurt, Munich and most recently Hamburg.
Corporate and tax partner Holger Dietrich says Bonn retains a certain local client base, including Deutsche Telekom and Postbank, but also points out that the city does not have quite enough work to be the only source of work for Flick Gocke lawyers based there.
He admits Bonn is unlikely to rival other centres.
“You’ll never find an international or bigger German law firm that intends to open up in Bonn,” he says.
Population 1.01 million
No recent office openings
Situated a short distance south of Düsseldorf, Cologne has a rivalry with its neighbour. It lacks the appeal that has drawn foreign and national firms to launch in Düsseldorf but nevertheless has been the foundation for several successful firms. These include Luther, and Linklaters spin-off Oppenhoff & Partner. When the magic circle firm focused its efforts on Düsseldorf in 2007, a team of partners set up independently in Cologne.
Luther co-managing partner Markus Sengpiel says that although the two cities are geographically close, they have different client bases – Cologne
has a particular focus on the automotive industry.
“There are a lot of companies that can be served in Cologne,” says Sengpiel. “But it’s clear it’s not a banking town.”
Openhoff senior partner Michael Oppenhoff says the fact his boutique launched in Cologne was more down to the location of the lawyers and, while the firm has local clients, it also effectively acts nationally and internationally from the city.
“I don’t think we’d have fared much differently if we’d set up in a different city,” he observes.
Population 0.69 million
Recent office launches: Hammonds (2010), Berwin Leighton Paisner, Bryan Cave, Lefèvre Pelletier & Associés (2011), Dechert, Watson Farley & Williams (2012), Herbert Smith Freehills, Oppenhoff & Partner (2013)
Frankfurt is the first place that many think of when considering the German legal market. As a hub for financial services and the location of the German stock exchange, it has been the first stop for many international firms over the years. Last year, Shearman & Sterling consolidated its German presence in the city, plumping for Frankfurt over Düsseldorf and Munich.
Hengeler Mueller finance partner Dirk Bliesener says the status of Frankfurt as a hub for German business has lessened in recent years, with other cities building their own strong economies. Nevertheless it retains its attraction for many.
“Frankfurt is in the centre of Germany, so you can get all kinds of national work,” Bliesener says, pointing out that it is not just local instructions coming through the doors in Frankfurt.
Despite diversification in recent years finance is still a core part of many firms’ practices in Frankfurt. The European Central Bank is in the city and Bliesener points to the imminent establishment of an EU-wide supervisory mechanism as another source of work.
He also says real estate financing is a growing part of the picture.
“Real estate transactions used to be very local, with local firms taking a large chunk of the work,” Bliesener explains. “But Frankfurt has become a hub for large real estate portfolio transactions.”
For Hengeler, Bliesener says, Frankfurt remains a “cornerstone” of the firm and its largest office.
He predicts a rosy future for the city’s legal market, with banking and capital markets – as well as a broader corporate scene – continuing to attract newcomers.
Key figures: Germany
Life expectancy at birth: 81
Source: World Bank, Destatis