CMS Hasche Sigle becomes largest German law firm by revenue as top 10 firms see 4% fee growth

CMS Hasche Sigle has overtaken Hengeler Mueller to emerge as the largest German law firm by revenue, with the 10 largest firms in the country seeing an average revenue rise of 4% during their last financial year, according to new research.

The rankings, compiled by German legal publication Juve, show Freshfields Bruckhaus Deringer retaining its position as the largest law firm in Germany with turnover of €334m (£286m), while CMS Hasche Sigle has passed Slaughter and May ally Hengeler with 3.9% revenue growth to rank second with revenues of €212m (£182m).

CMS Hasche Sigle managing partner Hubertus Kolster said: "We are now facing a market that has recovered. Our law firm has always developed in a positively and continuously way – even during the worldwide financial crisis."

Clifford Chance (CC) was among the fastest-growing firms in the top 10, with revenues climbing 8% to €194m (£167m) during the year, while Noerr and Gleiss Lutz also posted healthy growth of 9.5% and 8% respectively.

Linklaters was another solid performer, with revenues rising 5.3% to €168.5m (£145m). Germany senior partner Carl-Peter Feick commented: "Germany is very healthy right now, despite what is happening in the rest of the world. However, it is not yet back to the way it was before the financial crisis."

The relative resilience of the German legal market provides some cheer for international law firms. Despite the focus of many in recent years turning to key emerging economies, Germany remains the largest foreign practice for many UK law firms.

Average revenue growth across the entire top 50 was 7.7%, with 17 firms in the top 50 seeing double-digit increases in turnover. Salans saw the biggest percentage revenue rise, growing fee income by 35.5% to €27.1m (£23m), followed by German independent Graf von Westphalen, which saw revenues rise by 24.8% to €28.4m (£24m).

In contrast, only six firms saw fee income fall, with Shearman & Sterling the only firm to see a double-digit drop in revenue, down 14.3% to €66m (£57m). Allen & Overy, Weil Gotshal & Manges, Bird & Bird, SJ Berwin and Buse Heberer Fromm also saw fee income fall.

Shearman Germany co-managing partner Harald Selzner (pictured) commented: "The legal market is quite difficult. In 2009 there was a certain amount of recovery but 2010 was rather difficult because there was no big project work. It is still very patchy and it's anyone's guess if the few projects that are around will ever make it to the finish line."

Despite the largely positive results, many firms in Germany remain cautious due to the mounting eurozone crisis married with financial uncertainty in the US.

Jones Day Munich partner-in-charge Ansgar Rempp said: "Generally 2011 has been strong, but over the last few weeks we have noticed that banks have become much more cautious. It is hard to say what the long-term impact of the eurozone crisis will be, but we remain cautiously optimistic."

Feick continued: "The economic outlook is mixed. We were very busy in the first half of the year but since August we have seen it slow down a bit. Banks remain risk-averse due to what is happening in the rest of the world."

Shearman's Selzner added: "What is clear is the euro crisis is having an effect. Financing is very shaky at the moment. It has been a challenging time, that is for sure – and it remains so."