Reaching the top of the German markets

Aled Griffiths takes a look at the German telecommunications and equity capital markets and reveals the law firms that are cleaning up in these areas and who their clients are. Aled Griffiths is editor of JuVe magazine.

The German telecoms market is at the cutting edge of the move towards industry-based legal advice.

When liberalisation took hold in Germany, law firms were mainly involved in regulatory work, which explains the presence of well-known administrative practices such as Redeker Schon Dahs & Sellner at the top of the rankings (see table).

It was consolidation of the telecoms market that forced law firms to establish teams which could provide an industry focus on mergers and acquisitions and anti-trust work.

Regulatory issues still have a long life to run, but generally, the transaction-based work has made the legal market much more fluid. Clients are less loyal to firms, and certainly better informed, exercising their choice more often – something which has led to the JuVe ranking changing extensively from that in 1998/99.

The team which has established itself as a nose ahead of its rivals is at Bruckhaus Westrick Heller Lober. Even clients on the other side of the table are effusive in their praise of the whole team.

Clifford Chance has one of the best-known lawyers in the field, Sven-Erik Heun, who started off as a single practitioner, with a good mix of clients, including MCI Worldcom.

Deringer Tessin Herrmann & Sedemund has this year seen the benefits of its link-up with Freshfields, becoming one of the leading corporate firms in the field. Its clients include Mobilcom.

Doser Amereller Noack/Baker & McKenzie has the grandfather of German telecoms law among its ranks, Joachim Scherer, who has advised governments from all over the world on deregulation. Redeker Schon Dahs & Sellner does a large chunk of the regulatory work for Deutsche Telekom.

Also notable over the last year is the success of Hengeler Mueller Weitzel Wirtz, which despite its strong contacts in the world of industry, had been curiously quiet in the telecoms market. The last year, however, has seen it take over some of the regulatory work for Deutsche Telekom and the firm also acted for Deutsche Telecom in its aborted merger with Telecom Italia.

Gaedertz has also had success in the last year acting for Deutsche Telekom, in particular on anti-trust matters.

The appearance of a number of boutiques in the telecoms market should also be noted. Chief among these is Piepenbrock & Schuster – Hermann-Josef Piepenbrock was previously at Heuking Kuhn Luer Heussen Wojtek and Wessing & Berenburg-Gossler- together with the German office of Washington DC firm Wilkinson Barker Knauer.

Frankfurt's rise as the number one market in continental Europe has a lot to do with the success of the Neuer Markt, which can now boast issuers from several different countries.

Many law firms will point to their Neuer Markt record, even though many companies carry out much of their legal work for smaller issues exclusively in-house, leaving only the more undemanding corporate issues for law firms.

What will be vital in the future will be close contacts to the IPO players outside Germany, in particular in the US.

A number of German firms have been spending time building up close relationships with the leading Wall Street firms and US firms can see the potential in the German capital markets.

Over the last few years Germany has changed radically in the form of disclosure offered by quoted companies. This is, of course, down to the demands of the international capital markets, but the fact that most internationally active IPO lawyers in Germany think that full disclosure along Securities and Exchange Commission lines will become the norm in Euroland reveals a learning curve of the steepest proportions for many German lawyers.

However, it also represents an extraordinary opportunity. To establish a firm as a market player at the beginning of a full disclosure culture in Germany will be vital to its chances of success in the future.

US firm Shearman & Sterling has made a remarkable impact on the market over the past year. Its transatlantic capability has meant it was instructed on most of the important dual listings taking place, where it has even moved ahead of Sullivan & Cromwell, Simpson Thacher & Bartlett – both of which have worked with Bruckhaus – and Cleary Gottlieb Steen & Hamilton (even if the latter does still have a strong foothold in high volume transactions). What is really impressive, however, is the number of purely domestic issues it has advised on.

Hengeler Mueller Weitzel Wirtz has once again been involved in a large number of the high-profile issues going on in Germany and appears to be hand-in-glove with Davis Polk & Wardwell.

Firms which are fast improving include Oppenhoff & RAdler – which caught the attention of many with its work on the global co-ordination of the Stinnes IPO – and Doser Amereller Noack/Baker & McKenzie, which, in its Munich office, has some of the leading lawyers in the field of hi-tech and venture capital exit IPOs.