Recently viewed firm rankings
Recently viewed firm profiles
Recently viewed lawyer profiles
Overview
The German legal market has not been immune to the dramatic fallout from the sub-prime crisis. Consequentially there is a lack of confidence in the market. This has impacted on deal flows and law firms have noticed that many deals have been aborted, while many sources of funding have dried up considerably.
As a result of the turbulent economic times there have been fewer mega deals, however the mid-cap segment remains relatively unscathed. The crisis in the markets has had a negative impact on private equity deals, with some of the larger law firms steering a different course and concentrating more on the mid-market sector.
Insolvency lawyers witnessed a ‘ crazy end to 2008’, with firms switching less busy lawyers to their insolvency department, in order both to make ends meet there and to take advantage of the situation. This trend is expected to extend throughout 2009 and into the following year. Similarly, the employment departments are seeing an increasing number of short-notice instructions.
IP has remained remarkably untouched, as practices are not relying on big corporate deals to bring in work. ‘While the market goes up and down, trade marks last forever’ seems to be the commonly held view.
For litigation lawyers, the turmoil in the financial markets could be described as a mixed blessing as it has led to increased shareholder activism and what some have termed ‘credit crunch litigation.’ The widely reported financial difficulties of Hypo Real Estate Bank have shaken the market, causing the liquidity crunch, with firms seeing increased inter-bank litigation. On the antitrust front there is more state aid work in the financial sector and more compliance work. Due to decreased M&A activity there have been fewer merger filings and various law firms are re-deploying their resources to cartel and dominance work. Private enforcement actions are being brought to the fore by victims of anti-competitive behaviour.
The German Investment Act has been revised. As a result of this, law firms are becoming more conversant with the intricacies of open-ended investment funds. On structured finance transactions banks are still making offers to existing customers, but these offers are not as attractive as they previously were, therefore law firms have to think of innovative ways of structuring some of the deals. As a result of the volatility in the markets, several firms have had to shift the focus of their tax practices on to advising clients on joint ventures and complex restructuring transactions.
Firms have noticed an increased price awareness on the client’s side, who are asking for negotiable fees and even questioning the numbers of lawyers that have been put on a deal. Clients seem relatively content to pay the more expensive partner fees, but are demanding an increase in the quality of advice.