GERMANY
A VIEW OF COLOGNE
Anastasia Hancock reports
DESPITE being heavily lambasted during the course of the recession for its arguably blinkered bank plan which allowed for significant toxic
debt during the peak of the recession, the German market is showing good signs of recovery. The economy
showed an impressive 3.6% growth last year, the fastest
increase in two decades, and a massive improvement
since its 2009 contraction of a startling 4.7%.
It is prominent among its EU neighbours for the
speed of its revival, particularly in comparison with
other significant economies such as Portugal and
Greece who have had to rely on rescue packages to
counteract enormous debts. Big ticket M&A, IPO and
real estate deals are appearing again, but the turbulence of the economy has had its effect on the legal
market. ‘We have had a consolidation in the market’
says Andreas Urban, managing partner of Heuking
Kühn Lüer Wojtek. ‘Stronger law firms got stronger and
the weaker firms got even weaker than before’. And
although times were tough when deal flow was at a
low, the downturn has generated a more accessible
market for law firms. ‘Part of it is due to the fact that
Germany and its business community are becoming
more and more litigious’ notes Alfried Heidbrink of
Lindenpartners.
Germany has a massive export-based economy, and
as banks start to lend again and liquidity picks up, foreign investors are looking carefully at the market once
again. This is reassuring news for law firms which have
suffered a dry period, and particularly because foreign
clients are not immediately instructing the biggest global firms in the market to advise them. However, the new
post-crunch business environment has brought with it
battle-scarred clients who are more ruthless than ever.
‘Not only has it increased the pressure on in-house legal
departments, it seems that the recession has helped
bring about a new focus on customer sovereignty. To
put it bluntly, it’s the client that calls the shots. This phenomenon is here to stay, recession or not’ warns
Heidbrink.
For domestic players, it is an issue of prestige to be
able to attract international clients, and one that is not
necessarily dependent on the model of the firm. As
Rainer Loges, managing partner of Gleiss Lutz explains,
‘it is important for recruitment, self-esteem and culture
that we have a high percentage of them. It often creates
