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With globalization and international expansion by U.S. firms, there has arisen a need for legal services to go hand in hand with this change. The globalization of business means that lawyers logically follow suit, and this creates many opportunities for lawyers who want to gain experience in the international arena, and the best place to start is Europe. The growing importance of a unified European market, with a strong euro, means that international companies and their legal advisors need to respond rapidly. Despite instability in the European marketplace, there are many opportunities for lawyers seeking a tour of duty abroad. Firms are hiring U.S. lawyers, not just for their U.S. expertise but also for their specialist talents. Most U.S. practices in Europe are either consolidating or growing, and over the last few years U.S. firms have shaken up the European legal market with a host of mergers and lateral hires. Some firms have chosen to expand an already established practice, particularly those that have been supporting U.S. businesses in Europe for a number of decades. Firms newer to the European market have realized the business opportunities and have taken the acquisition route and acquired local expertise. A handful of firms are seeking a truly global strategy whereby a firm has offices in the major cities of the world. The majority of U.S. firms have either a Western European strategy, with offices in the major cities of Western Europe, or a Eurasian strategy with offices in the major centers of Western Europe and Asia-Pacific. A London base is seen as an integral part of the strategy, since it is the gateway for U.S. firms into Europe, and there are now more than 100 U.S. law firms represented in the city. This often follows client activity in brokerage and financial markets. Major areas of growth have been in antitrust, mergers and acquisitions, private equity, capital markets, corporate finance and tax. Another major area of growth is in U.S. capital markets practices, which are being used to challenge New York firms’ traditional niche of handling U.S. securities work for European companies. The Sarbanes-Oxley and USA Patriot acts, along with a general awareness of corporate governance issues, have led to European firms needing to understand U.S. securities law in greater depth. Essentially, the four ways in which U.S. law firms can enter the highly competitive European market is through merger, acquisition, joint venture or the establishment of a new business. Different firms are at different stages of development, with some 40 firms having little more than a letterhead presence. Of those with a physical presence, some are long established and are in a second or third stage of growth, while others are in their first phase of expansion. Originally, U.S. firms set up offices in London to service their domestic U.S. clients. Practicing U.S. law meant that they had to parachute in U.S. lawyers, but more recently U.S. firms set up London offices to practice English law. Some offer a full service, while others are niche firms offering services to a specific client base. Following this pattern, Cleary, Gottlieb, Steen & Hamilton of New York is an example of a firm that has a long pedigree in Europe and has grown organically as a result. The firm set up in Paris way back in 1949, followed by Brussels in 1960 and London in 1971. Again, reflecting a trend, the firm emphasizes its English law capabilities, and has been practicing English law since 1995. The firm is able to offer a full service, and sees itself as able to compete globally and locally as a result. It is clear that U.S. firms are in Europe to stay, indicated by their property strategies as well as by their employment practices. Firms like Latham & Watkins; Davis Polk & Wardwell of New York; Sidley Austin Brown & Wood; Weil, Gotshal & Manges of New York; and Morgan, Lewis & Bockius have all doubled or tripled the size of their London offices and many have moved to larger developments away from the famous City area. See Law Firm Advisory Group Newsletter “Legal Trends,” Spring 2000. On the employment front, a key development in the past year has been the taking on of trainees from U.K. law schools. (Historically, American firms relied on poaching staff from their indigenous counterparts.) At the other end of the scale, U.S. law firms continue to raid the top English law firms for partners, despite persistent rumors that some U.S. law firms are planning to pull out of London. However, homegrown talent isn’t encouraged by reports that the number of eligible U.K. associates promoted to partner at U.S. firms dropped last year. See The Lawyer (U.K. weekly magazine), April 14, 2003. In March 2002, the top U.S. firms in London called a truce with their City rivals over associate pay by freezing salaries at 2001 levels. Rather than increase the pay scale for each band, which is akin to an associate class, many of the leading firms moved their associates up to the next band. The move was welcomed by City firms that were desperate to avoid a salary war. With U.S. firms bringing in U.S. lawyers, U.S. law firms are often in the driving seat on European deals, leaving some European lawyers claiming that they feel like they are overshadowed by their trans-Atlantic counterparts. However, this is changing, as U.S. firms in London begin to hire more English lawyers. Firms need to compete against other U.S. law firms and the established European firms, and appreciate that this is a very sophisticated market. It is essential to be able to offer in Europe what the firm is well known for back home to build its practice and client base in the European centers. Depending on the United States for work, however, is not a good recipe for stability or continued growth, but is obviously helpful early on. Access to international resources and knowledge is also of paramount importance. Last year, Boston-based Mintz, Levin, Cohn, Ferris, Glovsky and Popeo surprised the London market by moving in on what is currently an unstable legal market, and a similar move was made by Chicago’s Winston & Strawn, which recruited lawyers to spearhead its long-awaited U.K. expansion. However, a number of other U.S. firms have been dramatically scaling back their London presence. Pittsburgh’s Buchanan Ingersoll has been one of the worst hit, after a stream of departures left the practice with a branch in London that had no lawyers. Washington’s Crowell & Moring has been adding to its London arbitration and litigation group and has a European strategy to expand its offices in London, which has been around since 1991, and Brussels to 30 lawyers each. See Legal Week (U.K. magazine), July 31, 2003. The past year has seen a lot of poaching in order to increase business, and that remains the primary means of winning. New York-based Shearman & Sterling’s London office continues with an aggressive recruitment drive after taking on another lawyer formerly with London firm Linklaters. Washington’s Hogan & Hartson has taken two finance partners from the London office of Dorsey & Whitney as it continues its determined push into the City. See Legal Week, March 23, 2004. Hogan has invested and expanded into a significant pan-European practice-it has eight offices and about 150 lawyers in Europe, and is aiming to double the size of its London office in the next year. Outside of London Of course, not all of the action is in London. U.S. firms have been making their presence felt elsewhere in Europe. The growth of the European Union means opportunity in Brussels, the home of the European Union, as well as Strasbourg, France, and Luxembourg. Competition law in Europe is still a matter of individuals, and personal relationships with the European Commission (E.C.), and it helps to have big stars in Brussels. Last fall, Los Angeles-based Gibson, Dunn & Crutcher, Washington-based Arnold & Porter and Sidley Austin Brown & Wood announced new offices, and the previous year saw Latham & Watkins move into town. See Legal Week, Feb. 11, 2002, and Aug. 28, 2003. The E.C. veto of General Electric Co.’s $45 billion merger with Honeywell in 2001, after approval by U.S. authorities, demonstrated the pivotal role now played by Brussels. This is the second wave of arrivals in Brussels, the first being in the late ’80s and early ’90s, when several U.S. and British firms opened offices in anticipation of the 1992 unification of the European market and the lowering of trade barriers. The last year or two has seen some significant partner poaching in Brussels. Washington’s Howrey Simon Arnold & White launched its 20-lawyer competition and litigation practice, attracting partners from other firms in Brussels and officials from the European Commission’s antitrust enforcement arm. Howrey Simon had planned its move since 2000 and had been wooing potential recruits but, even without an office, the firm was able to gain business at the European end of the GE/Honeywell, WorldCom/Sprint and Boeing/McDonnell Douglas deals. Washington’s Wilmer, Cutler & Pickering announced that its Brussels office had brought on board three partners from Amsterdam, Netherlands’ Stibbe, filling the vacancies left when three jumped ship to launch Latham & Watkins’ Brussels office. Just last month, European Commissioner Mario Monti attended the official launch of Arnold & Porter in Brussels, and the firm now has five associates working in Brussels and has made lateral hires from other firms in Europe. McDermott, Will & Emery has opened a base in Brussels for the use of its European competition partner, which, one partner noted, means they no longer have to do business out of the Conrad Hotel. The move reflects a quiet yet deliberate approach to a Brussels presence with a small focused team in Brussels supported by established capacity in the member states. The firm believes that it isn’t as important to be big in Brussels as it was five years ago. The Paris market is also vibrant, and Ashurst of London, Cleary Gottlieb and New York’s Willkie Farr & Gallagher are now among the top five most remunerative firms in France. Research by French legal magazine Decideurs Juridiques reveals that the three firms are muscling in on French corporate powerhouses. Ashurst’s growth has been phenomenal, with profits for the Paris office rising by 50% to 30.3 million euros, driven by its active private equity practice. Willkie Farr’s profits per lawyer increased by 18.2% to 640,000 euros. The firm’s Paris office has been the driving force of its European expansion. Offices in Milan, Italy; Rome; and Frankfurt, Germany, have been opened on the basis of what has been achieved in Paris. The Paris office’s profits of 38.4 million euros now accounts for around 13% of Willkie Farr’s overall profits of $320 million, largely as a result of a strong private equity practice. Morgan, Lewis & Bockius is set to launch in Paris with a team from French independent De Pardieu Brocas Maffei & Leygonie. Morgan Lewis has to clear its arrival in France with the French bar before it can announce the launch. Other firms have aimed for the other major European business center of Frankfurt. Baker & McKenzie has added to its Frankfurt office and has a strong banking and finance practice in Germany, particularly in acquisition finance and securitization. Continuing its European expansion, McDermott, Will & Emery last year opened an office in D�sseldorf, Germany, working on the assumption that Germany is a complex market that demands a multioffice presence. The D�sseldorf team will be working closely with the Munich, Germany, office, which also opened in January last year. Europe, it seems, is a land of opportunity for those who want to get into international practice. Lateral hiring of partners is rampant. However, the best way for lawyers to make the break is to go on a tour of duty for their current firm and then wait to be poached, but not to tell anyone! David Cowan is a public affairs counsel based in Cluny, France, advising on public affairs and regulatory issues for legal, financial and intellectual technology firms. He was formerly a financial journalist. He may be contacted at mailto:[email protected].

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