On April 23 Shearman & Sterling announced that it would shutter two offices in Germany and consolidate its 66 German lawyers into a single Frankfurt office. It appeared to be an about-face for the 842-lawyer global firm. Shearman has been a major presence in Germany over the last 22 years. Its reputation in the country was cemented in 1998, when Daimler AG tapped Shearman, rather than the firm’s much larger German rivals, to lead it into a megamerger with Chrysler Corporation. In 2002 Shearman’s German offices peaked at 130 lawyers. Even as recently as 2009, Shearman was named “M&A law firm of the year” by the German legal publication JUVE, a testament to its stature in both cross-border deals and domestic ones.
However, rather than mourning the consolidation, Shearman veterans welcomed it. After four years in which German domestic deal work lagged, competition from U.S. and U.K. rivals increased, and margins slipped, firm leaders are restructuring the practice to focus on cross-border work. “We were enormously successful for many years,” says Creighton Condon, Shearman’s senior partner. “But that market has just fundamentally altered. We either needed to be very much larger in that market—or focus just on the top end, but [be] smaller.”
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