International eye: Germany

Lorraine Cushnie on the month in Germany

The break-up of Haarmann Hemmelrath continued to dominate the headlines in the German market last month. The saga, which began at the tail end of 2005, has been taking on Wagnerian proportions as each week a new twist is unveiled.

Haarmanns’ split reaches home straight

Those impatiently waiting for the final curtain can probably now breathe a sigh of relief as, by February, it looked as if the final act had been reached.

As first reported on www. (4 January), Ashurst made a New Year raid on Haarmanns’ London office to hire an eight-lawyer insolvency team, including partners Matt McDonald, Ingo Schulz and David von Saucken. As well as doubling the size of Ashurst’s insolvency group, it gives the UK firm access to the German non-performing loan (NPL) market.

As head of restructuring at Ashurst, Nick Angel would have seen the growth of the NPL market when he was running the German operation in the late 1990s. He no doubt jumped at the opportunity to pick up a ready-formed team, while the Haarmanns guys will benefit from Ashurst’s finance practice.

It already seems to be paying off, as news reached The Lawyer in February that some of the investment banks, including Credit Suisse, are already lining up more work.

It was not long before what was left of the London office (namely, nine partners practising corporate, energy, finance and tax) had found themselves a new home. As first reported by The Lawyer (30 January), the London and Frankfurt offices are getting cosy with Squire Sanders & Dempsey.

It is understood that the Paris office has also been approached but is playing harder to get, and it is rumoured to have been approached by McDermott Will & Emery.

Meanwhile, Salans finally got itself a German base when it swooped on Haarmanns’ Berlin office, as first reported on (13 January). It is surprising that Salans has not found itself a German home earlier considering the size of its Eastern European network and the importance of Germany.

The firm has even admitted that it missed out on work because it was not based there. However, Berlin would not be most firms’ first choice of the German cities, and Salans global managing partner Dariusz Oleszczuk has not ruled out a second office.

Haarmanns as we know it may be at an end, but the names will still echo around the legal market, as both name partners have set up new franchises.

As first reported on www. (6 January), name partner Wilhelm Haarmann quit the firm he founded to launch a new practice with other members of the Frankfurt office. Haarmann, along with partners Francis Bellen, Christoph Schmitt, Markus Söhnchen and Jan Wildberger, founded the snappily titled Haarmann Partnerschaftsgesellschaft Rechtsanwälte Steuerberater Wirtschaftsprüfer.

Meanwhile, Alexander Hemmelrath is salvaging what is left of the network for Hemmelrath & Partners, which will be home to the legal and tax practices.

The remaining German offices, along with Moscow and Shanghai, have also signed up. But that leaves Milan, the Eastern European network and the offices in Tokyo and Singapore still up for grabs. Catch them while you can, folks.

Kirkland makes foray into restructuring work

Kirkland & Ellis‘s entry into the German restructuring market was a logical and canny move. At the beginning of February, the Munich office revealed that it had hired two insolvency partners.

Kirkland has remained tight-lipped over the identity of one of the new recruits while he works through his notice period, but the other has been named as Bernd Meyer-Löwy, who has joined from Linklaters
Restructuring is one of the key practice areas of Kirkland. The firm has a large US practice and a growing UK one that is increasingly involved in cross-border deals, such as the recovery of auto parts retailer Collins & Aikman.

Munich managing partner Volker Kullmann says: “It’s a natural decision to expand into restructuring work. It’s one of the areas where Kirkland & Ellis has a strong franchise.”

London partner and head of the European restructuring practice Lyndon Norley adds: “The plan has always been to have restructuring expertise in Munich. The German market represents a huge opportunity and there are very few US firms doing this type of work in the country.”

Indeed, restructuring in Germany has traditionally been the preserve of boutique firms. That is not to say internationals have not got in on the act, though. Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters and White & Case all have recognised practices, but the real specialists are the niche firms such as Kübler in the Cologne area and Wellensieck Grub & Partners in the South West.

However, as more and more work takes on an international flavour and Germany continues to increase in importance, firms such as Kirkland & Ellis will be well placed to pick up the big-ticket work. Or so they hope.

Hemmelrath & Partners
Office managing partner Harald Plewka to Gleiss Lutz; six partners set up Arquis Rechtsanwälte
Five partners left to set up Haarmann Partnerschaftsgesellschaft; remainder create Hemmelrath & Partners
Hemmelrath & Partners
Office left to join Heuking Kühn Lüer Wojtek
Hemmelrath & Partners
Three partners to Ashurst, the rest go to Squire Sanders & Dempsey
Hemmelrath & Partners
Three partners set up White & Case in Munich, two partners to Taylor Wessing, two partners set up Oldenbourg Plus
Hemmelrath & Partners
Partners left to set up Graf Kanitz Schüppen & Partners

The future of the remaining offices is undecided, including: Bucharest, Budapest, Milan, Paris, Prague, Singapore, Tokyo and Warsaw