Andreas Dietzel has been elected as Clifford Chance’s German chief after a cabal of younger rainmakers gave him their block vote. But can he raiseprofitability enough to keep London happy?
It was a warm summer evening in Frankfurt and it seemed as though peace had broken out. Guests at the annual Clifford Chance summer party on the banks of the Main watched the two candidates for the top job in Germany spend most of the evening next to each other, smiling and relaxed. Corporate head Andreas Dietzel had good reason to be happy: he had beaten banking veteran Michael Weller to succeed Hans-Josef Schneider and become German regional managing partner at the magic circle firm.
Schneider had served two terms after beating Peter Nägele to the position in 2002, in an election that had been seen as significant for the German partnership. After the merger between Pünder and Clifford Chance in 2000, there had been substantial restructuring as the German Pünder offices were moulded to become suitably efficient and more profitable. The election of Schneider was interpreted as the wish for a less confrontational figure who stood less for aggressive management and more for the pursuit of a harmonious culture in Germany.
Dietzel is quick to praise his predecessor for his “remarkably integrative approach” over the years. But when asked to sum up his goals for the next four years, the change of gear is apparent.
“I stand for a strong client-facing approach,” he says. “It’s through client work that you integrate practice groups and industry groups more fully. That in turn leads to closer cooperation of the various offices, both domestically and internationally.”
Even though there was seemingly strong support for Weller in his native banking practice, most partners were not surprised by Dietzel’s win.
“Weller emphasised how honoured he would be to have the post, but I think most of us found that Dietzel had thought a lot more about his agenda for the next few years,” says one Frankfurt partner.
The two candidates represented two different management styles and two different personality types.
“Weller is definitely the more relaxed,” says one banking lawyer. “He finds it easy to approach people. Dietzel is more distanced, maybe a bit more of the bureaucrat.”
That might fit most Clifford Chance partners’ picture of Dietzel: the wine expert whose hobbies include collecting antique legal texts. But what has impressed partners most over his years of running the corporate practice was how Dietzel attempted to rise above political dogfights.
“He’s very, very reliable,” says one corporate partner. “I wouldn’t go for a beer with him, but he’s totally neutral as regards the competing interests of the partnership. That’s a strong value in itself.”
When pushed it is noticeable that Dietzel’s description of himself chimes with the opinion of his partners.
“I think people associate me with a strong degree of fairness and the ability to integrate people,” he says. “It’s always about what’s right for the team. That’s what we’ve managed to achieve in the corporate practice, even though there was as ongoing restructuring of the practice over
That restructuring has left some scars in the German partnership. The much-publicised Shape programme led to a dozen partners leaving the German practice and, in the case of the Düsseldorf office, highly public and unnecessary court cases.
After a strong performance in the boom years Clifford Chance in Germany has recently posted disappointing revenue figures, with revenue per lawyer now down by 10 per cent on 2007’s.
More significantly, at e517,000, that is a considerable way behind those competitors that Clifford Chance regards as its peer firms, be it the other UK magic circle firms (Freshfields Bruckhaus Deringer (e704,000), Allen & Overy (e786,000), Linklaters (e617,000)) or leading German firms such as Hengeler Mueller (e850,000) and Gleiss Lutz (e551,000).
On the other hand Clifford Chance, more than any firm, has pioneered a highly successful sector group approach in Germany – energy, health care and private equity being the most prominent examples – that has been copied not only by other German competitors, but, significantly, by the London headquarters.
And the finance practice in Frankfurt is the most international of any of the firms in the city. The team, led by Riko Vanezis, has become a hub for transactions in Eastern Europe and Turkey. It is now extending its reach into the Gulf region and Africa and taking German lawyers way beyondparochial borders.
The extension of this industry-focused approach is thus a major goal for Dietzel. “It’s based upon what we’ve managed to achieve in corporate,” he declares. “It was new at the time, now it’s being imitated by other firms in Germany. That’s compliment enough in itself.”
Just as important, however, is how Dietzel sees the role of managing partner.
“I’m not just going to sit in the office and pore over the figures,” he vows. “I will and must get things moving.”
While his predecessor Schneider is seen internally as being one of the main reasons why Clifford Chance managed to rebuild a degree of community spirit among its German partners, those same partners also now think they can afford a change. Dietzel will be more client-facing and will fulfil a role not unlike a typical senior partner, carrying the Clifford Chance message to key clients.
“That’s the clear expectation of the partnership,” says Dietzel. “The focus on figures was important after the merger, but that’s now behind us. I’ll be visiting clients with partners during and after ongoing projects.”
That fits in with the views of most of the partners. While some point out that it would be new for Dietzel compared with his former role, they are united on the need for a shift of gear.
“What we need is a sales guy,” says one banking lawyer. “Someone who can drum up business and help raise profitability. That’s the only way that London will take us seriously.”
And that, more than anything, sums up the views of a group of younger partners who were not prepared to play a passive role in the election process. In a development as yet unparalleled in a German law firm election, a group of younger partners – all of them salary partners or at the beginning of the lockstep with strong business (upwards of e2m) – came together and informed the two candidates that they would be voting as a block and that they wanted to hear what each had to offer. Numbering 13 in total, they made up a significant proportion of the 90 or so voters in their own right. But considering nearly all of the young rainmakers were in the group, it was not a summons the candidates could ignore.
Staying in Shape
One of the caucus is explicit in what they expect from Dietzel. “It’s about setting the course for the firm that we younger partners are going to be inheriting in 10 years or so,” says one.
And it becomes clear that there was some degree of dissatisfaction about the performance of the older partners. “Some think that things will go back to normal after the end of Shape,” the partner continues. “But that’s not how it should be. Shape is the normal state of things.”
It is also clear that this generation of partners – who were all made up after the merger – is not interested in the old Clifford Chance-Pünder divisions. Nor do they want to continue an uncooperative them-and-us relationship with London.
One of the group of 13 points out that it has been a dysfunctional relationship.
“London sees Germany as chronically less profitable. The pressure to change that has led to a defensive mentality and we’ve fought some pointless battles. Whether we use envelopes with windows in them or not, is completely irrelevant,” he says bitterly.
As one of his colleagues concurs: “There’s no point just whinging about London. The young partners want to build out their business in the network and we all want to be more profitable. That means we have to deliver. But London has to trust our generation to achieve that.”
Testing the harmony
The challenge for Dietzel is enormous. Younger rainmakers expect a strict line on profitability in the German practice. Not only will the equity partners be expected to face up to more responsibility, but the large number of non-equity partners (about half of the total in Germany) will have to pull their weight as well. All this may test the social harmony that Schneider strove to achieve. And Dietzel will be expected to accelerate the German integration into the international network on a partner-by-partner basis. He seems to understand this as part of his role and is less interested in the formal role of regional managing partner.
“It’s more important how well-connected you are and how well you communicate,” he says. “That way you can contribute much that benefits the German partnership.”
On this point many are agreed. Dietzel’s excellent English is often mentioned in comparison with some of his contemporaries,including his predecessor.
Dietzel is, whether it was intended or not, the representative of the interests of the younger generation at Clifford Chance in Germany. This year has brought not just a new managing partner, but the election process itself has given that up-and-coming generation the opportunity to demonstrate their influence. Now they have to produce the goods.