How the Brussels boom reveals the problems of European law firms

Brussels is currently experiencing the second major wave of US law firms entering the market after the 1990s. Several recent personal details show the power with which the US units are penetrating the European market: veteran Linklaters partner Christian Ahlborn is moving to Covington & Burling, and two other Linklaters partners from the Brussels office are also switching to US law firms. The logic behind the move is understandable: Brexit has increased the importance of Brussels as the European capital – and that should also be a reason why Ahlborn, who has chosen London, is officially moving to Brussels.

But there is another development that is putting Brussels in the focus of the US units: the growing self-confidence of the EU Commission, especially in the regulatory and antitrust containment of the dominant US tech industry. Anyone who is one of the regular antitrust advisors for this financially strong clientele in their home market, such as Cooley, will be better able to defend this status in the long term if they can also present a convincing offer in Brussels.

Strategieberater statt Local Counsel

The hourly rates in Brussels, which have risen significantly in recent years, are also encouraging US law firms to open offices there and in other EU countries – so that they can also strategically support these clients in entering the market and defending their business models before the powerful EU Commission. The development in the Brexit context raises extremely uncomfortable questions, especially for the British units of the so-called Magic Circle. For many years they have been struggling with more than good and with a lot of money to really gain a foothold in the USA. Business with US companies in Europe is still going well for some.

But to ensure that it stays that way, continental European and especially British law firms such as Linklaters should urgently fine-tune their US strategies. Because if the US units that are growing in Brussels and elsewhere succeed in fully taking over the strategic legal advice of their clients in the European legal market, then the continental European competition could be demoted to a market position that falls far short of their self-image: that of the cheap Local Counsel for special legal questions.

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