Silky PR skills can’t quite cover the embarrassment of Links’ Cologne withdrawal

Linklaters has clearly been taking lessons on managing tricky news, but there is such a thing as being too cute. Buried away at the bottom of a press release confirming the admittedly quite interesting news that the magic circle giant was to launch an office in the much-fancied Duesseldorf market with a couple of respected Freshfields partners, is the footnote:

“With the opening of the new office, Linklaters will wind down its nearby Cologne office. A number of partners in the Cologne office do not share the strategic vision of opening an office in Duesseldorf and the firm is engaged in constructive discussions with them.”

From that point, the missive resumes the celebratory, Duesseldorf-love-in, bombshell ill-concealed.

It is certainly one way of getting out the unusual news that Linklaters is to close one of its largest foreign offices (120 lawyers) in a major international market.

Take in a little recent history and the move becomes all the more startling. Cologne was one of the firm’s largest German offices and head office of legacy firm Oppenhoff & Raedler, which Linklaters merged with at the beginning of the decade.

Ironically, it was the Cologne partners who were the most positive about merging with the UK giant, with the dissenters mostly based in Munich and Berlin.

Despite the reputation for unhappiness of Linklaters’ German partnership, the move has been greeted with near-disbelief in the local market, with one ex-partner today initially refusing to accept it was more than a rumour.

Once it had sunk in, he commented: “It makes no sense to do this. Cologne is historically the largest office and there is no advantage of being in Duesseldorf over Cologne.”

This, one would imagine, will be a view echoed throughout the current Cologne partnership and the main reason why just 10 out of the 25 partners have agreed to join the Duesseldorf venture.

To further stick the boot in to the Cologne lawyers, there is the fierce rivalry between the two cities. Natives compare it to the relationship between Glasgow and Edinburgh or Liverpool and Manchester.

The departure of such a large firm from Cologne will also be a body-blow to the local market. Linklaters joins the likes of magic circle rival Clifford Chance, Slaughter and May ally Hengeler Mueller and Gleiss Lutz, who all feel there is no strategic advantage to be in Cologne. Other firms such as Beiten Burkhardt and Norton Rose have, of course, pulled out of the market in recent years.

Linklaters managing partner-elect Simon Davies says that the firm felt it could not attract the top-level corporate talent required without shifting its focus towards Duesseldorf.

He comments: “It has been recognised for a long time by partners that we needed to strengthen our German corporate practice and [the new Freshfields recruits] Ralph Wollburg and Achim Kirchfeld are two of the most well-respected practitioners in Germany.

“However, it makes no sense to be in both Duesseldorf and Cologne and many of our competitors who also target the top corporate work are in Duesseldorf.”

Given the clear corporate drift towards Duesseldorf in recent years, Linklaters' move is understandable, if a little belated.

But the bottom line is that the move is also the clearest indication yet of just how badly Linklaters’ German practice has been performing outside of a decent showing in finance.

Certainly, the operation had yet to get traction as a credible corporate adviser with German bluechips, which had been acknowledged for some time as a problem. But even the most rabid Silk Street-basher would not have claimed that the firm needed such drastic action in a key European market.

Another ex-Linklaters partner comments: “This is an admission that they got it wrong from the start – that they should have been in Duesseldorf, and the people they got in Cologne have not delivered to the required standard. Apart from the Frankfurt part of the merger, it really has been quite disappointing.”

Quite. For all the rightly-lauded polish of Linklaters’ global ascent, the firm’s reputation has been badly dented nationally. To be a ruthless Anglo-Saxon firm in Germany is one thing, but to be a ruthless Anglo-Saxon firm that has not even got results is a reminder that there is still the odd chink in Links’ shiny armour.

james.illman@legalweek.com; alex.novarese@legalweek.com