US firm announces Frankfurt office closure after 18 years; seven partners to be laid off

Faegre & Benson has announced plans to exit Germany, with the US firm's Frankfurt office to be closed down later this year.

The closure will result in 15 lawyers, including seven partners, being laid off.

The decision to close the office, which covered corporate, real estate, employment, dispute resolution and trademark law, was made at the beginning of the month, with Frankfurt staff informed on 3 April.

The Minneapolis-based law firm has been in Frankfurt for 18 years, with the office first launching in 1991.

Faegre's management committee chairman Tom Morgan admitted the closure had come as a surprise to its German lawyers, eight of which were added through a team hire from former PricewaterhouseCoopers ally Heussen only three years ago.

He said Germany had not lived up to expectations on activity levels in the cross-border mid-market segment that the firm has targeted, especially in the key corporate area.

Morgan told Legal Week: "This is not a reflection on our colleagues in Germany but only a reflection on the market. Frankfurt has not developed the stature as an international business centre to the extent it was talked about some years ago.

"You look at your practices to identify which are more successful and which are more distressed. Germany was a more distressed practice."

A rival Frankfurt partner with a US law firm commented: "A lot of firms misunderstand the German market. They think Frankfurt is one single German legal capital like Paris or London."