Germany vs the U.S.: The battle for legal talent intensifies

Against a backdrop of growing political and economic tensions between Europe and the United States, the legal market now appears to be facing its own form of contagion: a strategic rivalry between Germany and the U.S. for control over key legal talent.

A market shock without precedent in Germany

“This is huge. Probably the biggest move the German market has seen in years.” The comment, widely echoed across the profession, captures the scale of the shock triggered last week when Latham & Watkins was revealed to have raided Freshfields for a group of top-tier corporate partners.

The U.S. firm has recruited four heavyweight figures:

• Markus Paul, Frankfurt-based and until recently Freshfields’ Continental Europe managing partner,

• Carsten Haak, a private equity specialist widely viewed as a rising star of the German market,

• Wessel Heukamp and Verena Nosch, Munich-based corporate partners.

Even before the move became official, market rumours were already well advanced. Many were bracing themselves for what could become one of the most significant turning points in recent German corporate law history.

While some sources close to the matter believe Freshfields - with five offices in Germany and more than 200 lawyers in its M&A practice alone - can absorb the blow, others are far more pessimistic. One insider went so far as to say: “It’s the end of Freshfields’ private equity practice in Germany.”

Far more than a routine lateral move

This was no ordinary partner departure. The lawyers involved are widely regarded as integral to Freshfields’ German corporate and private equity identity. Markus Paul, in particular, is known for leading some of Germany’s largest private equity transactions, including landmark deals for clients such as Permira.

For many observers, the exits must be read against a broader backdrop of long-term strategic and cultural change within the firm.

As reported by Habiba Cullen-Jafar, one insider put it bluntly: “The shift toward the U.S. and U.K. has really changed the culture. Before, it was an Anglo-German law firm with huge operations in Germany; many decisions were taken locally. Over time, this has shifted more and more toward the U.S.”

Historically, Freshfields’ German roots were central to its European dominance. The 2000 merger with Deringer Tessin Herrmann & Sedemund and Bruckhaus Westrick Heller Löber created Freshfields Bruckhaus Deringer and cemented Germany as a core pillar of the firm’s identity.The U.S. pivot: stated ambition, internal friction

In recent years, however, the strategic emphasis has increasingly pivoted toward the U.S. market. Freshfields has openly articulated its transatlantic ambitions, backed by a series of high-profile U.S. hires, including:

• Ethan Klingsberg from Cleary Gottlieb in 2019,

• Damien Zoubek and Jenny Hochenberg from Cravath in 2021.

Officially, firm leadership maintains that U.S. expansion does not come at the expense of other regions. Senior partner Georgia Dawson told Law.com last year that the firm’s U.S. growth ambition would be “in addition to what we already have.”

Privately, the picture appears more nuanced. Several German partners are said to question the internal impact of the U.S. push, particularly in terms of governance and remuneration.

One senior partner at a rival firm commented off the record: “Some German partners are bloody pissed that some U.S. guys are earning $10 million and not necessarily carrying their weight.”

Symbolically, Freshfields’ decision last year to rebrand simply as ‘Freshfields’, dropping the German elements of its historic name, was seen by some as reinforcing that shift in strategic centre of gravity.

A complex equation for Freshfields Germany

Beyond symbolism, the challenge is deeply operational: replacing a cross-generational team combining experience and future leadership. Markus Paul, a partner for 17 years, represented stability, while Carsten Haak — promoted to partner only last year — embodied the next generation of German private equity leadership.

For some market watchers, Freshfields’ appetite for renewed German growth appears to have waned in light of its U.S. ambitions. The losses may not be deliberate, but they are viewed as a predictable by-product of a U.S.-centric strategy.

That said, Freshfields retains formidable strength in the region. Its German M&A practice alone numbers more than 200 lawyers, with nearly a third focused on private equity-related transactions.

Latham: a strategic gamble and a German comeback

From Latham & Watkins’ perspective, the move must also be viewed in context. The firm’s German trajectory has not been without turbulence in recent years. High-profile departures include:

• Tobias Larisch, who left in 2024 to help Kirkland & Ellis launch a new Frankfurt office,

• an 11-lawyer restructuring team hired by Willkie Farr & Gallagher,

• and two M&A partners who subsequently joined White & Case in Frankfurt.

Against this backdrop, the recruitment from Freshfields looks like a critical strategic response. Less about short-term market share, it appears designed to stabilise and future-proof Latham’s German platform while anticipating generational transition.

Yet the gamble is real. Historically, Latham has not always excelled at integrating lateral hires in Germany, and much of Freshfields’ client base remains highly institutional in nature.

A market in transition

For competitors, the implications are clear: the balance of power in the German legal market may be shifting. Freshfields has long been the dominant force. Latham’s offensive could fundamentally reshape competitive dynamics.

Germany versus the United States: more than a simple partner transfer, this episode illustrates an intensifying transatlantic rivalry — with the German legal market emerging as one of its most exposed battlegrounds.

Sophie Stevenard