German law firm Noerr is set to significantly scale back its presence in Central and Eastern Europe after forming an agreement to transfer four of its offices in the region to top European independent Kinstellar.  

The Munich-based firm will spin off its practices in the Czech Republic, Slovakia, Hungary and Romania to Kinstellar, after which the two firms will cooperate on a non-exclusive basis to serve their clients in their respective jurisdictions.  

The offices’ more than 70 lawyers and paralegals will all be offered the chance to work for Kinstellar along with the offices’ staff, Noerr said. 

Noerr’s co-managing partner Alexander Ritvay cited limited growth in the region as the basis for the decision.  

“As part of our regular review of the firm’s positioning, we have concluded that forming a strategic partnership in the Central and Eastern European markets is the best approach for enhancing the quality of our advisory services moving forward,” Ritvay said. “We have been pursuing a strategy of qualitative growth for many years. While this strategy is working very well in Germany, we have to recognise that the CEE markets have not developed in a comparable way.”

Noerr’s CEE network – which also includes a 16-strong Warsaw office – accounts for only a small fraction of its overall turnover, which grew by almost 6% in 2023 to €333.1m. Nearly all of that – €317.8m – was brought in by the 520 lawyers, tax advisors, auditors and paralegals spread across the firm’s six German offices, while the CEE offices generated €15.3m, down from €16.6m the year before.

Noerr said it was “exploring other options” for its Warsaw office, which has not been included in the deal with Kinstellar.  

The agreement with Kinstellar follows Noerr spinning out its Moscow office in early 2022 ahead of Russia’s invasion of Ukraine, having split from its Kyiv arm back in 2013. It similarly forged cooperation agreements with the firms created from the spinoffs. 

The agreement with Kinstellar is expected to be completed in the coming months following regulatory approval and once “operational and technical” aspects of the deal have been worked out, such as those relating to investments in IT systems and leasehold premises. It will leave Noerr with international offices in Alicante, Brussels, London and New York along with Warsaw. 

For its part Kinstellar pointed to the enhanced German language capabilities and connections with German and other continental European clients the deal would bring. 

Those aspects, “coupled with the experience of the Noerr team, will complement and enhance Kinstellar’s existing strength in these markets”, the firm said. 

Kinstellar was itself formed from the spin out of Linklaters’ offices in Bratislava, Bucharest, Budapest and Prague in 2008 under the leadership of the Magic Circle firm’s former CEE managing partner Jason Mogg, who serves as the Kinstellar’s senior partner. 

Since then the firm has continued to work with Linklaters and has launched four more offices across Eastern Europe, including one in Kyiv it opened in 2021 after absorbing DLA Piper’s 38-lawyer office in the city. 

The firm has also added a base in Turkey, two in Kazakhstan and another in Uzbekistan and announced in January it had expanded into the Southeast Asian legal market after forming a joint venture with 21-lawyer Vietnamese firm Asia Counsel.