Travers quits Germany; Salans inherits team

Travers Smith has shut down its German operations, forcing all five of its Berlin-based lawyers to find a new home at Salans.

Travers Smith will now operate a best friends system in Germany, as it prefers to do in most jurisdictions. It is understood that the firm has referral relationships with Hengeler Mueller, Noerr Stiefenhofer Lutz and P&P Poellath & Partners.

Travers Smith senior partner Alasdair Douglas denied that killing off Germany was proof of a failed international strategy: “That’s not how we see it. Opening offices around the world is not our strategy. We prefer to use best-friend relationships and Germany was a one-off.”

Douglas chose not to comment on whether or not the Berlin office was turning a profit but did say that in private equity, TMT and corporate finance, the volume of work was not as high as expected.

Douglas told The Lawyer: “We’ve been thinking about it for a long time and we’ve been weighing our strategic options. We thought we’d be better off dealing with a decent independent German firm than trying to do the work ourselves.”

Travers Smith opened in Berlin in October 2001, taking Karl Pilny from Coudert Brothers. It was its first office with foreign-law capability.

At the time Travers Smith managing partner Chris Carroll said that the decision to open in Berlin was prompted by uncertainty over the future of many German firms, as Travers Smith regarded the possibility of forming a German alliance as too unstable.

Travers Smith used to enjoy relationships with Gleiss Lutz, which went on to formalise its alliance with Herbert Smith, and Bruckhaus, which went on to merge with Freshfields.

“At the time, we saw all the decent firms tumbling into bed with our competitors,” said Douglas. “But with top-notch independent firms still existing in Germany, the reason for us opening in 2001 was no longer a reason for keeping the office open.”

Pilny is a corporate partner and was hired to build up the office’s private equity, M&A, TMT, competition and litigation capability. At the end of 2006, there were only five lawyers in Berlin, with Pilny as the only partner. Douglas said Pilny had done a good job in building up the office but that the Berlin market did not generate enough volume of work.

The firm still has a Paris office, which opened in 1999, but it only advises on English law. “We’re absolutely committed to being in Paris, and it’s a totally different situation,” said Douglas. “It’s a great place to be.”

Travers Smith exit from Berlin follows the departures of Clifford Chance and Lovells from the German capital. Lovells killed off Berlin in August 2006 following the walk-out of its five-partner banking team. Clifford Chance shut down its Berlin operations in 2005.

Salans chairman Stephen Finch said: “We had been looking to build Berlin up with more competence. We’ve only had the office for a year, and it has exceeded our expectations. We now get a team of excellent experience and the bonus of a few clients as well. It marks no change in our international strategy, but ties in well with our Paris and Moscow offices, and Shanghai.”