Inside Germany: the English lawyers’ perspective
"Respect for education and learning, well-trained workforce, benign financing environment, supportive state banks and emphasis on investment"; all reasons why Germany is popular with both investors and law firms. Anna Williams explores the legal scene in Europe's leading economy.
As parts of Europe veer dangerously close to fiscal oblivion and/or societal breakdown, the German economy not only supports low unemployment but continued to grow as others struggled, thanks to healthy domestic demand and an impressive export book. It is little wonder that so many of the firms offering UK training contracts have offices in Germany, several of them offering trainee and associate secondment opportunities.
To help me understand what makes the German economy and its legal market tick, I spoke to Simon Beddow, the head of Ashurst's European corporate practice. In 2005 he began managing the firm's Munich and Frankfurt offices, living half of the week in each city. In four years, he learned a great deal about the diminishing differences between UK and German commercial legal practice. He also earned the firm the nickname 'The People's Republic of Ashurst', following an article in German magazine JUVE, which picked up on his mission to introduce the use of first names in the office and replace the formal 'Sie' with the informal 'Du' when addressing a person. Historically, most of the best lawyers would be addressed as Herr Doktor or Frau Doktor, following the long route to legal qualification. "Whereas a newly qualified solicitor in the UK might be as young as 24 or 25, in Germany, you're probably 30 before you get out onto the dance floor."
German legal advice was seen by some non-German clients as protracted and judicial in approach - much like its qualification route - and certainly not as results focused as it would be from UK or American lawyers. Simon explains: "In the 1990s, as more deals became cross-border, there was a degree of frustration with traditional German law firms. They weren't sufficiently client friendly, in the sense that they didn't offer a round-the-clock service or provide clients with access to lawyers' direct dials or mobile phones. When private equity money started moving into Germany, those clients said to firms like ours, 'We want you to do these deals for us'."
Simon is keen to point out that "the Germans are a hugely adaptable people. If it requires English to sell something, then they will speak in English. Of the 225 people in our German offices during my tenure, there were two other Brits apart from me and every one of the remaining 222 people spoke fluent English". It's more than just the lingua franca in many corporate law firms: "Transactions are heavily influenced by English and American deal technology. Obviously there are distinct bits of German law, but anyone from London working in a German corporate or finance team will see the same things they would back at home. Some deals are even conducted using English law." Simon met people who had worked in Frankfurt for over a decade who professed to speak no German whatsoever: "You can definitely go out there as a trainee and work with no language skills, and that's not possible in Paris, Madrid or Milan. I went not speaking a word of German."
Simon encountered the legendary German efficiency pretty quickly: "It's an old stereotype, but they are organised and they do have a different working mentality. It's in at 8:30am and no mucking about, so that means less chatter around the water cooler. They also don't like to have meetings unless there's a purpose. You need to be well prepared to be effective, and if a meeting drags on then there's a sense that you weren't prepared for it." Simon recalls a meeting he scheduled soon after arriving in Germany. He turned up five minutes late to an empty room, as everyone had assumed his absence at the appointed time signalled cancellation.
It's easy to assume that Germany is a successful capitalist economy: "It is in fact a social democratic country: in industry, workers and management engage together in long-term planning. Many businesses are still owned by families and therefore the owners have a sense of trusteeship or guardianship. This influences how they plan and do things, and any risks are very calculated. It's a more cooperative economy than the UK, although we've recently seen this type of cooperation at work in relation to the Vauxhall plant in Ellesmere Port, where expectations of workers and management have been recast."
Apparently the pre-2008 corporate borrowing binge was shocking to many German business people. "They come from a completely different angle. People asked me, 'How can you gear a business to that extent?' German businesses' plans are typically more cautious, slower and steadier." Despite all this, there's a huge number of UK and American-headquartered firms operating in German cities. The table below shows all firms offering UK training contracts and the cities they operate in. A few have trainee secondment programmes from the UK to Germany.
As for why no single city dominates to the same extent that London dominates the UK's commercial legal market, Simon explains that it goes deeper than regional pride and loyalty (although this is very strong): "Germany is a completely decentralised country and economy. It used to be the case that you couldn't have a Bavarian firm in partnership with a firm in Nordrhein-Westfalen, for example, because each federal state had its own separate Bar. That meant pan-German firms weren't possible. This didn't apply to the legal departments of major corporates like BMW, Siemens or Bosch, who could centralise their lawyers in a head office. It's typical for large German corporates to have massive legal departments with brilliant lawyers, and being a head of one of these collosal legal teams is absolutely on a par with being a partner at a top German firm. In Munich, for example, if BMW's legal department were a law firm, it would be the biggest in Bavaria."
So if large companies' legal departments can do everything, why is there room for so many international law firms in Germany? The answer to this is its vast 'Mittelstand' of mid-market businesses, which show great loyalty to their region's legal community. For more on the Mittelstand, watch this from the BBC and read this from The Economist.
Summarising the context for its success, Simon points to "Germany's huge respect for education and learning, its well-trained workforce, the social and economic contract, a benign financing environment, supportive state banks, and an emphasis on investment and development ". Despite the eurozone's seemingly insoluble problems, Germany remains popular with foreign investors and that, in turn, bodes well for its legal communities.
The trainee's view
SJ Berwin's Adèle Behles spent the second seat of her training contract in her firm's Frankfurt corporate department, experiencing a variety of deals for both listed and private companies: "I saw a complete mixed bag of work, some of it linked to the London office. Sometimes we would have a London client with a German subsidiary; sometimes it would be a client that was listed in Germany; and sometimes it would be a private equity client." Adèle worked almost exclusively with German lawyers and her working language was German: "I was the only native English speaker and so I adapted to my colleagues' working practices, including attending meetings conducted in German and reading daily email traffic in German." Depending on the nature of the client or deal, some of the documentation was drafted as dual language, with the occasional issue adopting English law if it was linked to work emanating from London.
Having taken a French and German degree, which included a year living in Frankfurt, arriving for the six-month placement was almost a homecoming for Adèle: "I already had friends in the city, but if I hadn't, I could have taken advantage of a list that circulates with the contact details of other UK trainees." Colleagues' attitudes to lunchtime helped to promote friendships: "People like to go out together for a sit-down meal - five or six associates together maybe."
And what of the supposed formality of the typical German law office?: "It can be difficult to know when to use first names, or Herr or Frau. I noticed that partners would address English and American clients by their first names and use Herr or Frau for German clients. As an English person coming in, I used 'Sie', even if I called that colleague by their first name. The partners laughed and explained that as we were all colleagues, I was to call them 'Du'. I'd say at first you should always err on the safe side and use 'Sie', but assume you'll then be told to use 'Du'!"
One aspect of the trainee's role sticks out in Adèle's mind, purely because it seemed so unusual at the time. Deal documents must be notarised, and it can be the trainee's job to manage this: "It can be time consuming, especially as the notary has to read every document aloud in your presence, and they will make a point of correcting any typos they find. If you have a deal closing, you need to factor in the time needed for the notary. Since being back in London, I have been able to make that point to colleagues in discussions about deal closings involving Germany."
Adèle sees several benefits from her time abroad:
- She got to travel to visit clients as the sole SJ Berwin representative, which was a real confidence boost. On one occasion she took an intern with her, and this taught her to delegate.
- Because of the varied work she saw, including some EU/competition, she felt able to hit the ground running when she returned to London and started her third seat in EU/competition.
- She realised how much she valued the firm's London trainee network. "It's great to be able to ask a fellow trainee if they have come across a particular scenario before. Or, if you are doing a late night, it makes it more pleasant to be in a team of three or four trainees working together." Although, being one of very few trainees in the Frankfurt office, "you learn to figure things out for yourself more".
- While in Germany she was more in control of her own time management: "This taught me how to prioritise tasks and actively manage workloads and competing demands."
- Lastly, a seat abroad is a great opportunity to build your network within the firm. It is much easier to call someone with a quick query if you have had a chance to work alongside them before.
If you are hoping to incorporate time in Germany into your training contract, and your firm offers seats there, you don't need to worry about fierce competition from your peers. Seats in Frankfurt or other German locations are commonly far less popular than the likes of Paris or various Asian cities. If your German language skills need brushing up, chances are your firm will organise business language classes for you prior to departure. This just leaves you with the choice between going in the summer months or the winter. Summer festivals and public holidays throughout June v skiing and Christmas markets - tough choice!
Anna Williams is CityLawLIVE conference organiser and research manager at LawCareers.Net.