International and U.S. law firms are continuing to invest in Germany, with cross-border mergers and acquisitions (M&A), finance, and private equity hires driving legal market growth in the country. Reed Smith is the latest firm to expand its Munich office, bringing in two partners from McDermott Will and Emery, including its German private equity group leader, Nikolaus von Jacobs. The move is part of the firm’s key commitment to the expansion of the Munich office. Other U.S. law firms that have recently grown in Munich include Kirkland & Ellis, Dechert, DLA Piper, Allen & Overy, Ashurst, and Dentons, all of which have added transactional partners in the Bavarian capital.

Morgan, Lewis & Bockius opened its second German office in Munich in March, with a 19-attorney group from rival Shearman & Sterling, including its country head and M&A leader Florian Harder. The firm’s chair, Jami McKeon, said in a statement that the opening of a Munich office is strategically aligned with its global client base, as the city is home to many multinational companies, such as Amazon, Google, Siemens, Linde, Allianz, Audi, BMW, MunichRE, and Microsoft.

Goodwin Procter, which launched a Munich office last year, called the city a “private equity hub.” Frankfurt, Germany’s financial capital, also saw partner hires by Dentons, Herbert Smith Freehills, and Latham & Watkins this year. According to Refinitiv data, Freshfields Bruckhaus Deringer advised on more than $13 billion worth of deals involving German companies in Q1 2023, making it the top global dealmaker for German M&A during this period. Shearman, Latham, Goodwin, and Sullivan & Cromwell were the other top dealmakers for German M&A during this period.

German companies were the second most-attractive M&A targets for international investment in Europe, after the UK, in the first quarter of 2023, with $109.7 billion worth of investments announced during this period, according to Refinitiv. The U.S. is also a top investment destination for large German companies, as a February survey revealed that 72% of German respondents planned to increase U.S. investment in 2023, with the auto, transport, and logistics sectors likely to be the biggest beneficiaries.