How could they do it? How could a German firm refuse to fall gratefully into the arms of an Anglo-Saxon powerhouse? Pünder, Oppenhoff, Boesebeck Droste and (so it seems) Feddersen Laule have realised that they cannot go it alone. So why not Bruckhaus?
The fact that a third of the partnership was not ready to vote for a merger with Freshfields does not mean that it is off for good. But the two-thirds majority does not tell the whole story. With partners of five years plus having two votes, an absolute majority is meaningless because it would take only 10 more senior partners to scupper any bid to reach the majority needed.
These are the lawyers who, without any international alliance, have been the first port of call for the majority of major deals in the past year, including Vodafone/Mannesmann, Deutsche/Dresdner and Veba/Viag. Bruckhaus also has the largest private equity group in Germany and a tax team which has rocketed up the rankings. In almost any area, the firm is among the top five.
And that is the point. Bruckhaus does not need to jump into bed with Freshfields because it has a dominant position in the biggest European market.
What of the cream of the cross-border work? Surely Bruckhaus could not fail to want a fair slice and is not going to get it by remaining domestic. But London firms’ strength in international M&A and capital markets work is based on the relative size of London as a finance centre, as well as the tendency for transaction management to be directed out of investment banking offices there. Both are being undermined. It is not so much that Frankfurt will supplant London, but as it is the biggest European domestic market, it may allow Germany’s law firms to take on other characteristics: a hint of New York or Chicago rather than London. In other words, if the UK was as big as Germany, perhaps it might have more than one Slaughter and May.
Given this, it is surprising to see Freshfields sources blame poor communication in Bruckhaus as the cause of the resistance, as if voting for a merger ought to be self-evident. It isn’t, and a substantial number of partners are not prepared to ruin the Bruckhaus culture for a merger to which there are a number of equally attractive alternatives. One senior Bruckhaus lawyer summed it up by saying: “It would be good if we do it, it will be good if we don’t.”
Most of the Frankfurt office may be in favour, but the Düsseldorf office has every reason to be more hesitant. The advantages for the finance lawyers in Frankfurt are obvious, but Freshfields will realise that merging with Bruckhaus without the stars of the Düsseldorf corporate practice would not be received well.
In sum, a substantial number of Bruckhaus lawyers think that Freshfields has much to do. And they think it will have to consist of market analysis, multi-cultural understanding and convincing argument, and not with the attitude that the merger should be a matter of course.
Aled Griffiths is editor of German legal news magazine JuVe Rechtsmarkt. He can be contacted at firstname.lastname@example.org