MERGERS, MERGERS EVERYWHERE: CONSTRUCTING THE GLOBAL LAW FIRM IN GERMANY
| Published date | 08 November 2001 |
| DOI | https://doi.org/10.1108/S1521-6136(2001)0000003006 |
| Date | 08 November 2001 |
| Pages | 51-75 |
| Author | Susanne Lace |
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MERGERS, MERGERS EVERYWHERE:
CONSTRUCTING THE GLOBAL LAW
FIRM IN GERMANY
Susanne Lace1
Competition between national elites and public confrontation between modernizers and
guardians of tradition contribute to the revelation of hidden structures or the tacit rules on
which rests the authority of these symbolic fields.
Dezalay (1995)
In Germany globalization is now regarded as the main threat to the Federal Republic’s
post-war reconstruction of social order.
Albrow (1998)
INTRODUCTION
The last decade has proved to be a most fascinating epoch in the history of
German commercial law firms. Only six years ago, academic work discussed
specific structural and cultural barriers which were said to inhibit these firms’
development. It was argued that the German legal profession was held back by
professional regulation (Flood, 1995) and that German corporate lawyers’ deter-
mination only to provide “precise and informed legal advice which justifies an
exceptional fee” restricted their firms’ growth (Rogowski, 1995).
Conversely, writers in the professional press were more upbeat – they
believed that centres such as Frankfurt were home to some sophisticated and
entrepreneurial German law firms (Balzer & Jensen, 1996). Indeed, foreign law
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Legal Professions: Work, Structure and Organization, pages 51–75.
Copyright © 2001 by Elsevier Science Ltd.
All rights of reproduction in any form reserved.
ISBN: 0-7623-0800-1
firms reportedly found it difficult to break into the lucrative Frankfurt market.
The English firm Slaughter & May left the city; others, such as the U.S. firm
Skadden Arps, scaled down their operations. The thwarting of Anglo-American
ambitions appeared to counter theses (such as Dezalay’s, 1991, 1995) which
focused upon the advantages Anglo-American law firms held over their foreign
counterparts.
This renders subsequent developments all the more intriguing, as the last four
years have witnessed a series of Anglo-American/German law firm alliances
and mergers. By the first quarter of 2001, all of the most highly regarded
German firms were linked in some way with English firms.
This chapter will consider these changes. Drawing upon empirical research
undertaken with lawyers in England and Germany,2the recent development of
commercial law firms in Britain and Germany will first be considered in order
to contextualise the later discussion. The chapter will then move on to discuss
the fortunes of Anglo-American firms in Frankfurt and the recent spate of
mergers. In so doing, it will unpack the concept of the “global law firm” and
analyse what has catalysed change. The final discussion will speculate about
the future, by weighing the possible success of the mergers and by considering
how the working lives of commercial lawyers in Germany may change.
BACKGROUND – A BRIEF RECENT HISTORY OF
COMMERCIAL LAW FIRMS IN BRITAIN AND
GERMANY
Britain
The role of government as an agent in the process of professional change in
Britain in the last thirty years or so should not be underestimated. Significant
de-regulation and re-regulation of business and the professions has taken place.
Implicitly and increasingly, governments rejected functionalist accounts of
professional altruism (Parsons, 1954), criticising what were seen as self-
interested practices (Powell et al., 1999). The 1967 Partnership Act facilitated
the growth of law firms, by allowing partnerships to comprise of more than 20
partners. The New Right championed moves to a flexible, post-Fordist, regime
of accumulation and promoted policies such as the expansion of international
free trade and the rolling back of the public sector, legitimising capital’s desire
to extract profits world-wide (Hanlon, 1999). Financial markets were deregu-
lated in the eighties (the “Big Bang”), by a government willing to oppose
business interests hostile to radical reform and keen to tackle anti-competitive
practices (Moran, 1991).
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52 SUSANNE LACE
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