France continues to gear itself up for some major changes in its legal system and legal practice.
Recently, Big Five accountancy firm PricewaterhouseCoopers had the Paris Court of Appeal rule in favour of its legal arm, Landwell & Associes.
The landmark case ruled that the Paris Bar cannot lay down an ethical code of conduct for multi-disciplinary partnerships (MDPs).That litigation was part of an ongoing debate between MDPs and the local Bar associations.
The debate centred on a rule which states that if a law firm is attached to an MDP, then all the MDP members must be covered by Bar rules, which in turn provide that law firms must remain independent and avoid any conflicts of interest.But having failed to fight off the accountants -- five of the top ten French firms are allied to them -- the French domestic market has also long had to contend with the encroachment of London-based international firms.This is set to continue.
Firms like Clifford Chance and Freshfields are heading towards 200 lawyers in their Paris offices, and the domestic market has had to become less self-centred as foreign firms expand.Clifford Chance, the largest international law firm presence there, added 60 lawyers last year.
It recently strengthened its mergers and acquisitions (M&A) practice by hiring M&A specialist Dominique Bompoint from Bredlin Prat and a new telecoms head from Salans Hertzfeld & Heilbronn, Marc d'Haultfoeuille.
Other City firms have also been expanding into the French capital -- SJ Berwin last month opened a Paris office with another Salans partner, private equity specialist George Pinkham.And both US and UK firms have been in abortive talks to link up with another leading local firm, Jeantet & Associes.
Cecile Paillard, communications manager in Clifford Chance's Paris office, says: 'The French market is a sophisticated one and is continuing to grow in the areas that have been growing in Europe generally, such as M&A, telecoms and IPOs [initial public offerings], and there is also a growing market for tax and real estate, and finance.
Law firms like Clifford Chance are expanding to mirror the clients' needs.'And that comment is confirmed by the recent European Venture Capital Association's European private equity survey, conducted by PricewaterhouseCoopers.
On the continent, which is increasingly the focus of many firms' aspirations, France came second to the UK with 17% of total funds raised, followed by Germany with 15%.That survey may mean more business for both domestic and international firms in France, but a study by French legal research journal Juristes Associes may be helping to fuel the moves and mergers in the French legal market.
The group found that foreign law firms are pulling ahead of the leading French practices, with Clifford Chance, US firm Jones Day Reavis & Pogue and Lovells among the most successful firms in Paris in terms of turnover per partner.Caura Barszcz, editor-in-chief and publisher of Juristes Associes, explains that 'the commercial law firms are at the other end of the scale' from the vast majority of the 35,000 lawyers who practise mainly private law, with the Big Five and the Anglo-Saxons at the top.'The Big Five accountants have changed ideas about business evolution in France, be that in Paris or the regions.
They have also changed perceptions about work and service.
Most often the Big Five accountants carry out commodities work.
They strengthen and grow their geographical reach a little each day, buying up firms and hiring people.'Other big players on the scene are the UK and US firms, from which the offensive has been particularly remarkable in France.
These two groups represent more than half of fee-earners and income among the commercial law firms, which is seriously worrying the Bar associations.
And they have only just started.'And it is not just the City firms that are moving into France.
National firm Hammond Suddards Edge announced last week that it is breaking into the French market by merging with Paris-based Hausmann & Associes.Other firms are expanding their networks to include one of the biggest players in France.
CMS, the transnational legal services organisation formed by City firm CMS Cameron McKenna, recently announced that Bureau Francis Lefebvre (BFL), would join as a full member from 1 March 2001.BFL is ranked among the top five law firms in France, and also has offices in Berlin, Brussels, Bucharest, Buenos Aires, Casablanca, Dusseldorf, Madrid, Moscow and New York.Richard Taylor, chairman of CMS, said: 'The addition of BFL completes CMS' strategic plan to have at its core a top-tier law firm in each of the three major European jurisdictions -- Germany, France and the UK.
BFL's transactional tax practice will be the pivot of CMS' services in this important cross-border practice area.'From the French perspective, Robert Baconnier, chairman of BFL sees membership of such alliances or networks as inevitable for most commercial practices.
He says: 'There are still independent firms in France, but among the large firms, that is relatively rare.
Joining an alliance or network does not necessarily mean loss of independence, and there is scope for further integration later.'He adds that the French market is different from that in the UK or the US, with the Big Five accountancy legal arms, such as Landwell, and Fidal, which is linked to KPMG, and Andersen Legal having a stronger presence on the continent, particularly in the tax and legal area.And Jacques Tacquet, managing partner of Landwell France is clear why the MDPs are doing well in many European capitals, including Madrid: 'It is quite clear that the clients like MDPs otherwise they would not use us.
But the French MDP is different from the Anglo-Saxon model.
In France, the two entities are separate, owned by the partners of each profession.'He explains that historically, French lawyers did not structure themselves as business enterprises, so France has been under-equipped in terms of the organisation of its legal profession; and that is why the new players such as MDPs or the London international firms have succeeded quite quickly.London is still seen as the main threat for the French firms, but they are also aware of the ambitions of the more internationally focused US firms such as White & Case, which first established a presence in Paris in 1927.
And the pressure is on for any remaining independent firms to examine how they can sustain their businesses, and grow them, and whether that realistically means a link-up either with a UK or a US firm.
But for many lawyers in France, there is a reluctance to merge because of the difference in cultures and fears about whether it is possible to integrate.
Or will t hey simply be swallowed up to become the local office of a bigger global organisation?Mr Tacquet concludes: 'The perception is that going international is a prerequisite of surviving.
Everyone is trying to do something, and they agree what they have to achieve -- but they don't agree on how to achieve it.'
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