International eye: Germany

Hard times for Haarmann Hemmelrath

Haarmann Hemmelrath appears to have run into hard times. Ever since name partner Wilhelm Haarmann announced his departure, the firm has been plagued by a series of exits.

Haarmann’s decision was not a killer blow for the firm, but very little time seems to pass between one departure and another. Haarmann was followed by Andreas Oldenbourg and Simon Preisenberger, who left the firm’s Munich office to set up on their own. As reported in The Lawyer (14 November), the former partners are practising under the name Oldenbourg Plus, specialising in corporate M&A and private equity. They have also taken former Haarmann Hemmelrath associate Silke Pütz.

The upheaval of the Munich office has obviously caught the eye of competitors, who are on the lookout for good quality lawyers. Taylor Wessing has been the first to go in for the kill, taking two corporate partners – Haarmann Hemmelrath’s former head of M&A Heinrich Rodewig and corporate restructuring specialist Thomas Krempl.

But it has not been all bad news for Haarmann Hemmelrath, with three new lawyers joining its ranks. First, Munich was bolstered by the arrival of two new partners – real estate expert Frank Oprée moved over from the local office of Graf von Westphalen Bappert & Modest, while Georg Nagler, an employment and administrative law specialist, joined from health insurance firm AOK Bayern. Finally, London played host to a new recruit, with Field Fisher Waterhouse‘s head of wind energy Stefan Schmitz joining as a partner. There’s life in Haarmann yet.

US assault continues with Sidley’s Frankfurt launch
The interest from US firms in the German market continues unabated. US firms have been pouring into Germany during the past few years and making a success of it.

The latest to set up in the country is Sidley Austin Brown & Wood. As first reported on (13 October), the firm is launching an office in Frankfurt with two Lovells partners. The office will initially focus on structured finance, with a long-term aim of expanding into corporate. As reported in The Lawyer (24 October), the move has caused a bit of a stir at Lovells, but the future bodes well for the Sidley.

In a survey of the German legal market, conducted by German legal magazine Juve Rechtsmarkt, the US firms made some of the biggest gains. The German office of Weil Gotshal & Manges led the way in Germany last year after it posted a mammoth 41.2 per cent increase in turnover to €48m (£32.3m). The figures are testament to the firm’s aggressive expansion policy in the country. Latham & Watkins scored a similarly impressive increase in turnover, up 23.5 per cent to €43.1m (£29m) thanks to a series of lateral hires and its burgeoning high-yield practice.

As to which firms are next, rumours abound, with lawyers looking out for the next competition and recruitment consultants looking for the next big-ticket instruction.

Lovells suffers further losses
The departure of two Lovells partners to Sidley were not the only exits the firm had to contend with in Germany. The UK firm also lost a five-strong private equity team to Clifford Chance, including rainmaker Oliver Felsenstein.

Felsenstein, a former German managing partner, is understood to be one of the biggest billers in Germany and the firm’s highest-profile corporate partner. His clients at Lovells have included HG Capital and Terra Firma.

The two firms are still thrashing out the terms of Felsenstein’s move. But even if Felsenstein is unable to join Clifford Chance for months, he is getting plenty of contact with his new colleagues. Clifford Chance recently advised German retailer Metro Group on its IPO, which included the sale of 75 per cent of the shares to Permira. Guess who led the deal for Permira…

Most expensive lawyers in west and south
A survey, conducted by our friends at Juve Rechtsmarkt, was published in November examining the partner and associate chargeout rates around Germany.

The survey discounts the bigger international firms and instead questioned 239 domestic mid-sized (less than 50 partners) and specialist boutiques. It compares results by city and region (see map), with a split developing between two halves of the country.

Overall, lawyers in the west and south of the country charge more for their advice than those in the north and east. The west and south includes Munich, which has always been a large legal centre and in the past few years has attracted many international firms.

Unsurprisingly, Munich turns out to be one of the most expensive cities to get legal advice in Germany. The Bavarian capital has the second highest average billing rate for partners at €303 (£204) per hour and the highest average billing rate for associates at €236 (£159) per hour. It is also home to the highest partner chargeout rate of all the firms surveyed at €750 (£505) per hour, followed by Frankfurt and Stuttgart with €600 (£404) and Düsseldorf at €500 (£337).

The city with the lowest reported partner chargeout rate was Frankfurt at €180 (£121.2) per hour, while Berlin and Stuttgart came a close second with €190 (£128).

A look at the regions shows that lawyers in the Ruhrgebiet in the west of the country on average have the highest partner billing rate at €273 (£184) per hour, while east German lawyers charge the least on average at €221 (£149). The lowest reported rate by region came from Bavaria and Rhineland at €150 (£101), followed by Hessen with €160 (£108).

Top US firms in Germany
Rank Firm Turnover Revenue per equity partner
    €m £m €m £m
1 Shearman & Sterling 95.9 64.6 3.3 2.2
2 Baker & McKenzie 90.2 60.7 2.3 1.5
3 White & Case 80.4 54.1 1.7 1.2
4 Weil Gotshal & Manges 48.0 32.3 5.3 3.6
5 Latham & Watkins 43.1 29.0 1.3 0.9
6 Cleary Gottlieb Steen & Hamilton 31.0 20.9 2.2 1.5
7 Jones Day 29.4 19.8 1.8 1.2
8 Mayer Brown Rowe & Maw 26.5 17.8 1.3 0.8
9 Wilmer Hale 19.0 12.8 1.1 0.7
10 McDermott Will & Emery 9.8 6.6 1.2 0.8
  Source: Juve 40