"This is huge. Probably the biggest move the German market has seen in years.” Last week, Latham & Watkins sent shockwaves through the German legal market when it emerged that the firm had raided Freshfields for a quartet of heavyweight corporate partners—including the firm’s former European managing partner. Frankfurt-based Markus Paul, until recently Freshfields’ Continental Europe managing partner, and rising star Carsten Haak—both private equity specialists—along with Munich-based corporate partners Wessel Heukamp and Verena Nosch, are exiting the nearly 300-year old firm for the Los Angeles-founded Latham. Even before the news officially broke, when whispers of the move were already pretty advanced, the market was steeling itself for what could become one of the most significant shifts in recent German corporate law history. For Latham, the benefit is clear. And for Freshfields, for many sources, the loss is a direct result of the firm's shift in focus away from Germany and towards the U.S. Whereas some peoples close to the matter suggest that Freshfields, which has five offices in Germany and over 200 lawyers in its M&A group alone, can absorb the hit, other insiders say it that the firm will struggle to recover, one going as far as saying: "It's the end of Freshfields PE in Germany." Freshfields Bruckhaus Who?

Once the news emerged, attention quickly shifted from the immediate sting of the departures to their deeper significance for Freshfields’ German business. This was not a routine lateral loss, but the exit of partners widely regarded as integral to the firm’s German corporate and private equity identity. Paul in particular is known for handling some of Germany's largest PE deals for clients such as Permira. “This group of partners really has true Freshfields DNA," said one person with knowledge of the moves. "They are genuinely at the centre of Freshfields Germany." Indeed, these were not peripheral rainmakers or disgruntled operators on the margins, as one partner at a rival firm put it. “These are not the guys standing in the second row, they are in the front row, they are the ones defining the strategy." For many, the departures have been read against the backdrop of longer-term strategic and cultural shifts within the firm. One insider pointed to a gradual reorientation of power away from Germany. “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; they could handle a lot locally, with many decisions taken on the ground. Over time, this has shifted and shifted more towards the U.S.” Historically, Freshfields’ German roots were central to its European dominance. The firm first voted to merge with German firm Deringer Tessin Herrmann & Sedemund and German-Austrian firm Bruckhaus Westrick Heller Löber in 2000, creating Freshfields Bruckhaus Deringer. At the time, the tie-up gave the firm unparalleled reach across Continental Europe and entrenched Germany as a core pillar of its identity. In more recent years, however, the strategic emphasis has increasingly pivoted towards the U.S. market, with the firm openly articulating its transatlantic ambitions. In 2023, managing partner Alan Mason told Law.com: “I would also emphasise the particular opportunity we have in respect of transatlantic work, which is a major priority,” adding: “We've invested very heavily in the U.S. over recent years and it's gone really well.” That investment has been reflected in a series of high-profile U.S. hires, including the addition of Cleary Gottlieb Steen & Hamilton partner Ethan Klingsberg in 2019, followed in 2021 by the recruitment of Cravath, Swaine & Moore dealmakers Damien Zoubek and Jenny Hochenberg. While the firm maintains that the partnership wholly supports its U.S. strategy, several sources suggest the picture on the ground—particularly in Germany—is more complex. U.S.-Germany Tension

Last year, Freshfields' senior partner Georgia Dawson explained to Law.com that the firm's U.S. growth ambition would not come "at the expense of other parts of the firm; it's in addition to what we already have". And although many partners accept the logic of the U.S. push, some privately question its internal impact, sources indicate. “Speak to any German Freshfields partner off record, and they will all tell you they are bloody pissed that some U.S. guys are earning 10 million, and not neccesarily carrying their weight,” said one senior partner at a rival firm. Symbolically, the firm’s decision last year to rebrand simply as ‘Freshfields’, dropping the German elements of its name, was seen by some as reinforcing that shift. Another rival partner observed: “I can see they may not have been happy. Freshfields is recalibrating its global footprint. But internally the U.S. is still not being seen as accretive as was promised, and the partners are still waiting on a decent return.” For several observers, the bigger problem that Freshfields faces is replacing a team that carries cross-generational talent. While Paul became a partner at the firm some 17 years ago, Haak, widely spoken of as a future PE star in Germany, rose to partner just last year. He was named to Law.com's Private Equity Rising Stars in 2024. A partner at a rival firm said: "I've had a look across the entire market myself; there is no one in Germany now who can replace the breadth of that team." But for the senior partner of a Continental Europe firm, it is very possible that Freshfields' appetite for German growth has waned in light of its U.S. ambition. The losses, while not a deliberate tactic, are a predictable byproduct of the U.S.-focused strategy. Nevertheless, Freshfields maintains corporate dominance over the German region. Its M&A team in Germany counts more than 200 lawyers, almost a third of which is focused on private equity-related transactions, two people with knowledge of the firm said. Latham’s German Ambitions

Latham has not had an entirely smooth trajectory in Germany either. The firm has seen a number of high-profile departures in recent years, including M&A partner Tobias Larisch, who left in 2024 to help Kirkland & Ellis establish a new Frankfurt office. Losses were not limited to M&A either— Willkie Farr & Gallagher last year hired an 11-strong bankruptcy and restructuring team from Latham, led by Jörn Kowalewski, Ulrich Klockenbrink, and Hendrik Hauke, alongside counsel Jan-Philipp Praß and seven associates. Soon after, partners Oliver Seiler and David Rath departed to join White & Case in Frankfurt. Against this backdrop, the recent recruitment from Freshfields can be seen as a strategic, even critical, response. “I think in my view for Latham, it is very valuable as it was on the way to suffering a generation-transition issue,” said one insider, adding that the move allows the firm to “tick off that box.” In other words, the hire is less about short-term market share than about stabilizing and future-proofing Latham’s German platform. Yet, insiders caution that execution remains a potential stumbling block. The same insider added: “We need to see if Latham will be able to on board them. This will lead to a lot of change, and Latham have historically not been very good at onboarding laterals in Germany. So we will need to see if it really works out." Another partner at a rival firm described the move as a “gamble” for Latham, especially given the institutional nature of a lot of Freshfields' client relationships. Another rival partner was more cynical. “For us it’s good. It levels the playing field. Freshfields has been really strong in Germany, now it should change things up.” Another highlighted the broader commercial consequences: “This is pretty good for fees—Latham charges a lot. Freshfields were more flexible in their approach to pricing so it can only be a positive as it will push fees towards the higher end of the spectrum.” Whether these predictions ultimately prove to be hyperbole or prophecy will only become clear over time. What is already certain, however, is that this is far more than a lateral move, representing a turning point for the wider German market.