News earlier this month that DLA Piper is to close offices in Berlin and Tbilisi – with the announcements coming within just two days of each other – sparked speculation over the global firm's commitment to Europe.

However, international COO Andrew Darwin is quick to dismiss any suggestion that the firm is retrenching across the continent and, indeed, today (31 March) the firm announced a tie-up with 150-lawyer Danish firm LETT.

"To say we are downsizing in Europe is nonsense – it is our fastest-growing region. With the closure of Berlin and Tbilisi, we are tidying up our coverage," he says.

Darwin says that both of the offices closed were "extremely small", and data from ALM Intelligence backs this assertion up, showing that Berlin was the firm's smallest office and Tbilisi its third smallest in the region.

Darwin would not comment on whether any more offices could be in the firing line, but said: "As any business does, we are always actively managing our coverage in all parts of the world."

But is this, as Darwin says, just a tidy-up around the edges? Or is it symptomatic of a changed focus at the firm following decades of breakneck growth?

New management, new strategy?

Under inspirational former managing and senior partner Sir Nigel Knowles, DLA Piper's non-US business expanded rapidly during the 1990s and early 2000s, opening offices across Europe, including Berlin and Tbilisi, both of which came as part of wider acquisitions.

DLA opened in Berlin following the hire of a team from German firm Luther in 2006, while its Tbilisi office was acquired in 2005 as part of the firm's takeover of EY Law Europe's 80-lawyer CIS business.

Under Knowles there was a lot of growth and a lot of investment – the firm has moved to a more mature phase

One former partner says that the closures are indicative of a new era for the firm: "DLA is going through a period of reassessment of where it wants to be. Under Knowles there was a lot of growth and a lot of investment – this shows that the firm has moved to a more mature phase."

The leadership duo at the helm of DLA's international arm, chief executive Simon Levine and senior partner Juan Picon, have been focusing on trying to boost profitability since they took over the leadership.

Reforms have included trimming the number of sectors the firm focuses on, from 15 key industries to seven, and introducing a points-based partner remuneration system. Both moves were motivated by increasing profitability, with the cut in the number of sectors based on targeting resources more effectively to areas where DLA could maximise profit.

The decision to shed the offices in Berlin and Tbilisi can be seen in a similar light.

As Darwin says: "Even small offices require support, and we want to be as efficient and effective as possible."

German strategy

Germany, unlike the UK, has no one dominant economic hub, so law firms entering the market often face a dilemma over where they want to be based. Berlin typically comes down the list behind cities such as financial centre Frankfurt, and Duesseldorf, home to some of the country's major corporations.

DLA's Berlin base was smaller than the firm's other German offices in Munich, Hamburg, Frankfurt and Cologne, as one former DLA Piper Germany partner says: "The Berlin office was not big enough to have an important role in the German legal market."

Another former partner says the Berlin office did not fit with the firm's wider Germany strategy.

The partner says: "DLA grew quickly in Germany over the past 10-12 years, but most of the time it didn't grow with a particular strategy. More recently, the firm has developed a clearer strategy that focused on big industrial clients, the car manufacturers and the banks, and Berlin didn't fit with that."

"In Berlin you need a strong real estate practice, a strong regulatory practice and a strong tax practice – it is a different focus compared to Frankfurt or Duesseldorf," the partner says.

The partner says that a decision could have been taken to invest in the office, hiring lawyers that fitted better with Berlin's client profile, but that there was not an appetite within the firm to invest.

"The feeling was an investment into the Berlin office would require a deviation from the strategy, and there wasn't enough willingness to do that."

Other law firms to have pulled out of Berlin in recent years include Orrick Herrington & Sutcliffe, which closed in 2015; Olswang, which saw a 50-strong team jump to Greenberg Traurig in 2015; and King & Wood Mallesons, which shuttered its operation in 2014.

A former partner says of the closure: "I don't think it's a big mistake – firms which decide to be in Berlin and have a good reason to be here have proved that it can be successful, but where firms don't have a good reason to be in Berlin, leaving is the right choice."

Struggles in the East?

The closure of DLA's Tbilisi office follows the firm's exit from Turkey in 2014 and Bulgaria in 2010, and can be seen as part of a wider contraction in both the CIS and eastern Europe.

Data from ALM Intelligence shows that between 2010 and 2015, the number of DLA lawyers in the CIS fell by 21%, from 96 to 76; while in eastern Europe, numbers fell by 35%, from 215 to 139.

Despite falling lawyer numbers, DLA Piper International chief executive Simon Levine restated the firm's commitment to the CIS and eastern Europe, saying: "Having a presence in the countries where our clients do business is an important part of our strategy. Clearly, eastern Europe and the CIS continue to be extremely important to our clients, and therefore to us. Our commitment to these regions is demonstrated by our continued investment in both hiring locally and promoting our own lawyers to the partnership, including three partner promotions effective as of May this year."

The firm's 11-lawyer Tbilisi team will join Dentons on 1 May. A former DLA partner argues that it is "telling that Dentons has taken over the office", as it clearly sees Georgia as a "significant market".

The partner notes that "many firms in London spend a significant amount of time acting for clients with interests in the former Soviet Union" and, indeed, Georgia's government has previously engaged DLA on major investment treaty disputes.

This partner argues that the decision to close in Georgia is "strange", and adds: "Why would one international firm take over the office of another if it was such a flawed proposition?"

However, one DLA partner insists that the move to close in Georgia makes sense for DLA, regardless of Dentons' interest in the market.

"We need to have a presence in places where we see synergies and relevance for our footprint and clients, whereas Dentons' model tends to be more flexible."

Sharper focus

Some sources argue that the latest closures are indicative of DLA's sharper focus on profit at the expense of global coverage. While the firm is still expanding internationally, as illustrated by its recent moves to add coverage in Latin America and the Nordic region, which this week have included deals in Denmark and Peru, these moves are regionally focused, building jurisdiction by jurisdiction, rather than the more piecemeal growth the firm went through in its earlier growth phase.

As Darwin concludes: "Our key driver is: 'Where do we believe our clients want us to be? And where do we need to be to give our clients coverage?' That is our litmus test."