Rated Freshfields Bruckhaus Deringer telecoms partner Raimund Schutz has blamed his departure on the effect that conflict issues and high leverage ratios have on his ability to serve his clients.
Schutz, who has quit for 10-partner German independent Loschelder, told The Lawyer: “I’m not speaking of legal conflicts, it’s a commercial thing. Clients don’t like it if you’re also advising their competitors.”
Schutz is a telecoms regulatory lawyer, a sector in which Freshfields is by far the strongest firm in Germany, advising TAL, Cable & Wireless, France Telecom and Telefonica.
Much larger than corporate rival Hengeler Mueller, Freshfields is a victim of its own success in Germany, where key practice areas such as telecoms and private equity are plagued by conflicts.
It is understood that commercial conflicts were also an issue for Peter Nussbaum’s private equity team, which defected to Milbank Tweed Hadley & Mcloy in May.
One source in the private equity sector said: “Historically, clients have given consent, but this is no longer the rule.”
Freshfields’ Cologne managing partner Klaus Beucher accepted that, as a regulatory lawyer, Schutz had conflicts problems, but claimed: “Right now clients seem to be more relaxed [on conflicts] and it’s not a particular issue in telecoms.”
Schutz also said: “The goal [at Freshfields] is to have high leverage with teams of 4 or 5 associates advising a client.”
However, Beucher said: “We’re comfortable with 1:2 or 1:3, 1:5 is out of the ballpark.”