Herbert Smith in head-to-head with Freshfields for Bruckhaus

Herbert Smith has joined the race to merge with German legal giant Bruckhaus Westrick Heller Lober, going head-to-head with Freshfields.

Herbert Smith is looking for a tie-up with the 30-partner Cologne outfit as a stepping stone to a global legal practice, sources close to the firm say.

Rival Freshfields, which is also in discussions with Bruckhaus, is expected to vote in favour of a merger next week.

“Herbert Smith is talking to a couple of firms in Germany but it already does a lot of work with Bruckhaus and has a good relationship, so some sort of alliance would be the natural thing,” the source confirms.

But Herbert Smith will have to overcome a strong challenge from Freshfields, which has made no secret of its expansion plans, and possibly a third suitor from the US. Bruckhaus partners are said to be divided over the Freshfields bid.

Dr Burkhard Bastuck, a partner with the firm, says: “We respect both UK firms and we have had a policy for the last two years of exploring possibilities for having better common law capabilities. In trying to achieve that goal we have had contact with many firms not only in Britain but also in New York.”

Bastuck adds that “all options are open”.

Bruckhaus is expected to make a final decision in the middle of this month. If it opts for a UK merger it will choose between the litigation expertise of Herbert Smith and Freshfields’ corporate resources.

Both firms are profitable, with Freshfields ranked the fourth in the UK with profits per partner of £555,000, and Herbert Smith fifth with profits per partner of £503,000 (May 1999 figures).

Herbert Smith partner Barry Jackson says: “I cannot talk about individual cases but obviously firms our size have to have relationships in the major markets.

“In the end you make the step forward to give clients a slightly more seamless service.”

Herbert Smith’s new senior partner Richard Bond takes charge this week.

He has promised a top-to-bottom strategic review of the firm.