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A flurry of aggressive French dealmaking in the last two years has allowed several U.S. and U.K. firms to make inroads into the country’s legal market. But even as these outsiders aggressively poach local lawyers to staff their Paris offices, the leading French corporate boutiques have strongly resisted rushing to the altar with their colleagues from abroad. It’s not as if all parties aren’t eager to collaborate. But the French boutiques have, so far, been more interested in establishing “best friends” relationships than in actually merging with foreign firms. “We oppose the trend to be bigger and become a one-stop U.S.-style firm of 1,000 lawyers,” says Jean-Francois Prat, the senior partner of France’s most prominent M&A firm, Bredin Prat. “We are just 35 [lawyers], but with a world network of eight ‘best friends,’ including Slaughter and May in London and other firms in Germany, Italy, and Spain, we can assemble a great team in minutes.” Bredin Prat also works often with New York’s Cravath, Swaine & Moore and sometimes with Wachtell, Lipton, Rosen & Katz. The cultural barriers to cross-border mergers are especially high. In October, merger talks between Jeantet & Associes, a leading Paris cabinet with 80 lawyers, and New York’s White & Case collapsed. The talks had progressed so far that the two parties were already starting to act as one firm and reply jointly to offers of work only to pull back from the deal. “Our clients could not understand the advantage in our allying ourselves with a global firm having offices in numerous jurisdictions,” says Jeantet partner G�rard Mazet. Notes White & Case partner Jean-Luc Boussard: “We came to realize that many things separated our view of the profession. … The two cultures [French and American] did not line up.” A number of firms, including Cleary, Gottlieb, Steen & Hamilton and Coudert Brothers, have long had major outposts in Paris staffed mainly by French lawyers. More recently, London-based Linklaters, which has had a French presence for years, expanded, and lured a number of locals to its fold. Hardest hit by defections was Gide Loyrette Nouel, France’s largest and most global law firm, which lost ten M&A lawyers to Linklaters. But deals like Vivendi’s $34 billion merger with The Seagram Company Ltd. in June have enabled Gide, which has 250 lawyers and offices in 15 countries, to recover from the raid. “It could have hit our M&A business badly, but we rebounded because of the sheer volume of business, particularly within France,” says Gide partner Youssef Djehane. In the Vivendi deal, Gide represented Seagram along with New York-based Simpson Thacher & Bartlett and Toronto-based Osler, Hoskin & Harcourt. Despite the volume of big deals, the country’s M&A laws in many ways remain “unsophisticated,” says John Riggs, senior partner in the Paris office of White & Case. In fact, finance minister Laurent Fabius obtained initial National Assembly approval last summer for a bill revising company law. The new law will tighten the rules governing mergers and acquisitions, and the legislation should also improve corporate governance by defining the respective roles of French boards of directors and chairmen and by requiring disclosure of top salary packages and voting rights. Two rival stock market regulatory authorities are also slated to be merged. The updated rules are expected to put France more in line with leading European Union countries. Many lawyers hope the level playing ground will encourage even more dealmaking. “The bill is a good one,” says Riggs of White & Case, the doyen of American lawyers in Paris and a member of the local Paris Bar Council. The immense amount of deal work hasn’t eased tensions between the French bar and the Big Five accounting firms, which have been staffing up their own “captive” French law firms. The French Bar Council, the equivalent of the American Bar Association, has aggressively asserted that a conflict of interest should keep the two professions separate. KPMG International’s law firm Fidal has led the fight against the bar council, bringing court challenges in several jurisdictions and asserting that restrictions enacted by the council go against the letter and spirit of a 1992 law merging the professions of lawyer and conseil juridique (a professional who can provide legal and accounting advice but can’t plead in court). Each of the Big Five firms have outposts in the Paris area. PricewaterhouseCoopers is located in Paris itself. The four others are based in La D�fense, the skyscraper business district on the edge of Paris, also known as the French Manhattan. With a touch of amusement, one local lawyer notes that “they control the bar council there and have made La D�fense their fortress from which they send out raiding parties.” Tillier is Paris correspondent forThe Daily Deal. He has worked in France and other European countries for Newsweek and The Times of London.

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