By Chris Johnson - 9 May 2017
Littler Mendelson has continued its European push by securing a tie-up with 16-lawyer U.K. boutique GQ Employment Law.
The move marks Littler's third European deal in the past 18 months, after it combined with Germany's Vangard in late 2015—a move that gave the U.S. firm its first presence outside the Americas—and 170-lawyer French labor law specialist Fromont Briens last October. The 1,200-lawyer firm now has one of the largest specialist employment practices in the region, with more than 200 lawyers across offices in Berlin, Düsseldorf, Hamburg, Munich, Paris, Lyon and London.
Littler co-managing director Jeremy Roth told The American Lawyer that the move, which followed six months of negotiations, was "an important step" in the continued development of the firm's international network and that the U.K. is a key market for its clients.
The deal will see GQ join Littler's international verein, which it established in 2013 to facilitate its combinations with Costa Rica-based BDS and Colombia's Godoy Córdoba Abogados, where the firm now has more than 70 lawyers. All of Littler's international offices are members of its verein, Littler Global, except for its bases in Canada, Mexico and Venezuela, which form part of its U.S. partnership.
A Swiss verein is a holding structure that allows member firms to retain their existing forms. It has been used by the majority of recent international law firm combinations, including DLA Piper, Dentons, Hogan Lovells, King & Wood Mallesons, Norton Rose Fulbright and Squire Patton Boggs. Baker McKenzie is also structured as a verein. This means that GQ will retain its existing ownership and management structure, with co-founder Jon Gilligan remaining in place as managing partner. Roth said that Littler's less formalized managerial structure means that no individual GQ partner will have a formal firmwide management position, but he added that the U.K. practice will have representation on its global executive committee and will be a "key part" of strategic decision-making.
GQ advises U.K. and international companies on a range of contentious and noncontentious employment issues, from partnership and contract disputes to workforce policies and white-collar crime. The firm was founded in 2010 by former Linklaters employment lawyers Gilligan and Paul Quain, who recently spent time in Germany and France in order to build relationships with the Littler Global practices in those countries. The three teams have already worked together on live client matters, Roth said.
Gilligan said that he came up with the idea to establish GQ during a three-year stint as in-house counsel at the investment banking division of Royal Bank of Scotland that spanned the financial crisis. "It was a pretty interesting time to be there," he said. "I got a lot of experience of getting employment advice from full-service firms where employment law wasn't a priority. There aren't that many employment boutiques in London and those that do exist are mainly focused on high-wealth individuals and small companies. Speaking to Paul [Quain], we realized there was a real opportunity to do something different for big international companies."
Roth said that the same reasoning led Littler to initially expand beyond the United States, after it experienced a "lack of integration" in law firm alliance networks. "We were in one of the alliances for a number of years and while it had some benefit in helping us understand the global market, frankly, a [global firm approach] is a better model for clients," he said. "Global clients are looking for a coordinated, integrated global partner; they're not looking for a roster of firms on a country-by-country basis."
While a more conventional approach for a U.S.-based law firm seeking to develop a European network firm may be to start with London rather than Germany and France, Roth said that Littler's niche practice means it has been able to follow a different path. "Most of the U.S. firms that come to Europe have big transactional practices and focus on London because it's a key financial market," he said. "We're chasing employers, not capital markets, so we go wherever companies have lots of labor issues."
The U.K. has been on Littler's radar for several years, however, and Roth feels that employment lawyers are particularly well-placed to capitalize on the ongoing disruption caused by the country's decision to leave the European Union. "Anytime there's dramatic change in a market, there's an opportunity for employment lawyers," he said. "We've already seen that in the U.S. with the Trump administration, and we're going to see it in Europe with Brexit."
The addition of the U.K. to the firm's existing offices in France and Germany—two of the markets most likely to benefit from any Brexit-related fallout from London, particularly in financial services—means Littler is now "in a great position to help employers navigate that uncertainty," Roth said.
The tie-up with GQ continues a period of extraordinary international expansion for Littler. The firm has now launched in no fewer than 14 markets since October 2013, including Canada, Colombia, Costa Rica, the Dominican Republic, El Salvador, France, Germany, Guatemala, Honduras, Nicaragua, Panama, Peru, Puerto Rico, the U.K. and Venezuela.
Roth said that the firm plans to further develop its global network, with Argentina and Chile at the top of its agenda. "I've had my eye on opportunities in both countries, but so far they haven't panned out," he said.
Littler also intends to develop its Canadian offering, having established a Toronto outpost in August 2015 with the hire of seven lawyers—including four partners—from Cassels Brock & Blackwell and local boutique Kuretzky Vassos Henderson.
Roth said that one side-effect of Littler's recent trailblazing is that its growing international profile has led to increasing numbers of firms making unprompted contact to propose combinations, with the U.S. outfit fielding recent enquiries from Italy and Spain. "We get called up a lot by people asking when we're going to show up in their country and if they can join when we do, but it needs to be the perfect alignment of the right jurisdiction, the right practice and the right people," he said. "The worst thing we could do as a law firm is get that wrong—that would risk our reputation and our relationship with our clients. So I can't tell you what's next, but I can say that there will be a next."