Armin Lange is a founding partner of Grundwerk Legal, a labor & employment boutique in Frankfurt, Germany and one of the ILN’s four German firms. In this episode, Lindsay and Armin delve into the current uncertainties in the general business market and their impact, what people often misunderstand about labor law, and the challenges facing today’s law firms.
You can listen to the podcast here, or we’ve provided a transcript of the highlights below.
Lindsay: Hello and welcome to the Law Firm Intelligence Podcast. I’m your host, Lindsay Griffiths, Executive Director of the International Lawyers Network. Our guest this week is Armin Lange with GRUNDWERK Legal in Frankfurt, one of our four German firms. Armin, welcome. We’re so happy to have you with us this week. Can you tell us a little bit about yourself, your firm, and your practice?
Armin: Yes. Hi Lindsay. Yes. Thank you very much for this invitation. It’s really a pleasure speaking with you. Yes. Well, GRUNDWERK Legal, as you said, the most important message, so to say, or information, is that in Germany, the ILN, we have this German group, so it’s not one firm for all different areas of commercial law, but we have different law firms. And we, at GRUNDWERK Legal, we cover the area of employment and labor law. That’s what we specialize in, and we are boutique and, so to speak, do nothing else but labor and employment law and do this with all the power, capacity, and knowledge we have.
Yes. Well, we might come later to a more detailed view on this, what it means for our business. Yes. And I’m one of the partners of the firm, and I’m on the job for more than 20 years, so rather experience. And I started my profession as a lawyer specializing on labor and employment law with a very similar approach at advising companies. And we have never changed this perspective. Yes. Well, I think that’s it at the moment, I would say.
Lindsay: So, can you talk to us a little bit about the current state of the market and what that means for your clients?
Armin: Yes. It depends on what you mean with the market. I mean, we can view this from the legal market and from a more general perspective. And if we start with our legal market, I think many firms and we, ourselves, have the same problem at the moment is it’s very difficult to find young, capable lawyers. So, the market is still expanding, business is expanding, it’s growing. And so, many law firms have the need to find younger professionals. And it’s very difficult. Hard to say. The main reason might be that it’s just that the baby boomers are now near retiring age, and therefore they’re slowing down. And on the other hand, there are not so many younger people who finish doing the studying of law and have the first steps of legal experience in this market. So, that’s one challenge. And the next challenge is the legal tech, AI. We will see what this means. We already see this, and maybe we started with departments became very popular and our clients in the HR departments, they started to Google and do not asking us. So, that was really a difference.
Lindsay: Always a risk.
Armin: Right. And now, the next step might be or will be this ChatGPT, for example. I already learned from a colleague, a much younger colleague, who uses this ChatGPT to prepare his statements, legal statements. And it really came to me as a surprise because I would never have had this idea to do this, to use this ChatGPT as a tool. So, this, of course, is a very, very serious challenge for us. And we will see that the business, the legal business will change seriously. Not so much, I hope, in our area of law, labor and employment law, and in particular not when we advise the companies. Because it’s very often we need this very detailed and suitable solutions. It’s not standard we can use all the time.
But for example, if someone represents employees, that’s standard business and it can be done easily by ChatGPT, I’m sure. Yes. We will see. That’s really a challenge. Well, on the legal market in labor and employment law, I would say it’s still a good situation for us. Although M&A is still rather low, it’s other business we can substitute this with. So, that’s the legal market. And now, the economy as a total is something else. Maybe to start with, I would say that if you speak with people on the street, we have a very high level of nervousness. People are anxious. And the reason might be, or one of the reasons might be that we had very, very good economic years the last 20 years. And we realized in the last years that it cannot continue like this all the time.
So, we already started to be a little nervous. And now, I mean, we have these objective problems. We have a war between Russia and Ukraine, which, of course, influences not only the mood, but also creates serious economic problems. We have this uncertain situation with China, which also influences German economy. Just given the fact that, for example, the automobile companies, VW and Mercedes and so on, they produce in China, and they sell a lot of cars in China. So, it’s a very, very important market for us. And we have this global climate problem, serious climate changes. So, this, of course, creates a lot of nervousness.
On the other hand, the unemployment rate is still okay. It’s not dramatic, not at all. And I think it’s even… It’s a little higher than last year, but still not traumatic compared to the years in 2015 or ’16 or so. So, at the moment, that’s not really a problem. We already had this problem during the Corona pandemic, and we avoided the risk of unemployment by short term work. So, the amount of hours per week was reduced and the state paid for the difference for the pay gap. This will… I’m very sure if we come into a similar situation again, the state will do the same again because they want to avoid the dramatic emotional effect of one of the risks of this unemployment rate.
And what’s really interesting is that the business climate index here in Germany, which reflects the mood of the companies or the company leaders, is still really good. It’s better than last year in March. So, on one hand, emotionally and psychologically, we would say, it looks like we could get into a crisis. But on the other hand, if you take an objective look on it, we don’t see it at the moment.
Lindsay: That’s good.
Armin: Yes. That’s good. And I hope it continues like this.
Lindsay: I know, right? Yes.
Armin: I mean, for us as employment lawyers, we always have something to do. That’s good news. If the economy is in a crisis, then we have these avalanches of terminations and we have a lot to do and coming to agreements with the Works Council and so on. And if business is okay or is good, then the companies have money to do projects to modify and so on, and to change the structure. So, we are to help again. We can stay relaxed.
Lindsay: Yes, it’s a good business to be in.
Lindsay: So, what would you say is your biggest challenge at the moment? I mean, you talked a little bit about it because you’re talking about the war for talent and that type of thing, and ChatGPT. What would you say is your biggest challenge at the moment?
Armin: Yes. Well, it’s right. The biggest challenge at the moment is precisely that. We are looking for a new partner, partner/colleague. We have a new setup for the firm. We started with this in July last year. We became GRUNDWERK Legal, and a new partner came to the firm, [foreign language], who’s, I think, 18 years younger than me. So, it’s a new perspective for us, all of us. And the business is very good for us. We are happy that many clients have asked for our advice, and therefore there is a need for assistance and help.
And it’s very difficult to find a fitting lawyer, not only due to the general situation, but also because maybe in particular [inaudible] when it comes to labor and employment law. I don’t know. But what I can say is for our firm, it’s very important to understand being a team. So, we need team members. So, we need someone who really fits in it, and we enjoy collaborating with her or him. And the same, of course, applies for him or her. And that’s not so easy. It takes its time.
Lindsay: Yes. Absolutely. I mean, especially given the size of your firm, you want to make sure that’s someone that fits really well.
Armin: Right. Exactly. Yes. So, that’s the main challenge, I would say, from our firm perspective.
Lindsay: Yes. Can you tell us about someone who has been a really big mentor over the course of your career?
Armin: Well… Yeah. From the top of the head, I would say, yes, there in fact is someone who is like a mentor because I have an uncle, an uncle who was a professor of law at a very high respected university here in Germany, in [foreign language]. And he made me study law. And he was a counterpart when I was at the university when we met. And he also gave me the idea that it makes sense to get a doctorate, to work on a scientific piece of work. And even at the moment, the last years, whenever we meet, he’s very interested to learn the news and to discuss with me and so on. I mean, of course, it’s not really a mentor, but he is a mentor in the meaning that he really helped me, in particular at the beginning, helped me to love the law, so to speak. And that’s still ongoing, of course.
Lindsay: Absolutely. That definitely counts as a mentor. Is there a client that’s changed your practice?
Armin: Well, that’s hard to say. I don’t think that I really have a client, one client, I would say, he changed my perspective on the legal market or on doing my business or so on. So many clients. No. I think we can say, and I can say, every client changes my work in the meaning that, for us, as labor and employment lawyers, it is very important and it helps to make better work and be more effective for the client if we understand the business, if we understand the company, if we know about the culture of the company. Because the better we know this, the better our advice can be. And therefore, every new client is interesting for us because we learn something else of business, a new perspective of business. In particular, of course, if it’s a client from another area of economics we have not covered yet. But in any case, it’s very important for us.
So, that’s really something I say. I think it’s a lot of fun and it’s very interesting. And as I said, it’s more than 20 years I’m doing this job and it’s still great for me. And it’s a pleasure to come to a new client and see how they work, how are the processes, who it is we are dealing with, how is the culture. That’s great.
Lindsay: That’s great. It should be something that you’re still enjoying after 20 years.
Armin: Yes. Right. Yes. When I started studying law, my idea was that I wanted to find a profession which would make me learn every day. And my dream was that every day is different from the day before. And that’s exactly for me, working as a lawyer here in this environment.
Lindsay: Absolutely. The law will definitely answer those needs.
Lindsay: What is something that you think most people misunderstand about your field of work?
Armin: Yes. Maybe one aspect is that it’s not always termination. Many people think that if it comes to labor and employment law, they say, “Well, that’s easy. It’s termination and you always do the same, and that’s it.” But it’s not true. It’s not only termination, but also so much else we cover. I mean, the total of employment reality is covered by this labor and employment law. So, when it comes to someone who does overtime work and he or she wants to get paid for it, the question is, do they have the right claim to get this paid? Or can we, for the employer, avoid this claim? When it comes to working time, we have rules. And so on and so on. And beside this, we have the very important role of the so-called Works Council. So, that’s a group of employees. They are elected and they have the duty to represent the interests of the employees. And they have a very, very strong legal position.
So, the lawmakers wanted to create such a group, the Works Council, being very strong. So, there are many areas where they really co-determine together with the employer. So, the employer has to learn that they cannot act as they want, but they have to respect this Works Council, they have to come to an agreement. And that’s really… I think in many jurisdictions, that’s unbelievable, that an employer has to accept that a group of employees… It was hired by the firm, by the company. And now, this group of employees, they really can challenge decisions and say, “Okay.” For example, “You want to make people work overtime. No, it’s not possible. We do not accept this. We want you to give us notice, a week in advance.” For example. “And if it’s more than 10% of all employees, then it’s not possible. And below this threshold, you have to explain to us why you want this.” And so on and so on.
If the employer decides to have a room where the people can spend their rest time, the employer cannot do it on her own or his own. They need the acceptance of the Works Council. So, it’s an unbelievable broad areas of law, or not only law, but reality where this Works Council really has to co-determine. Or if it comes to termination, this Works Council must be informed. They really need to learn about the details of the decision, why the employer decided to terminate this employment relationship. And there are strict rules which has to be covered. So, that’s really much more than only writing a letter and saying that’s a termination. That’s it. And as I said, it’s really not only termination, but also much more than that.
And because we have this very strict rules for the protection of employees and for this Works Council and so on, when we represent the employers, we cannot only work with a tool of law. It helps a lot, of course. But of course, we also need a sense for strategy, and we need a sense for psychology because we negotiate on the same level with the Works Council. Or we have a legal dispute with an employee and he or she is in a rather strong position. And nevertheless, the employer, of course, I would say, understandably, wants to solve a problem. And so, the law might not help totally. And so, we have to find a way to make the employee understand that it probably makes sense to accept the decision of the employer, which probably sounds very harsh. I don’t know. I don’t mean to be so harsh. That’s not what I want to say.
I want to say that many… I mean, every one of us knows this. When we think we have a claim, we have the right to ask for something, then we want to get this. And if someone says, “No, I don’t give it.” Then it’s difficult to understand this. And it even gets worse, so to say, if the employee in our situation says, “I have the right. I want to get this.” Misunderstanding that we have a continuing works relationship, and it probably is not a very good idea to take this fight. And there are many more aspects we can cover by trying to persuade the employee that probably he or she should accept that they will not succeed. And I think that’s really typical for labor and deployment law. In many other areas of law, it’s nothing like that.
Lindsay: Yes. That makes a lot of sense. I mean, as you said, compromise is a big part of what you do because it’s not supposed to be so adversarial because you want the relationship to continue, especially in employment law.
Armin: Right. Exactly.
Lindsay: Unless it is about the termination, which is only a small part of what you do.
Armin: Exactly. Correct. Yes. That’s it.
Lindsay: Yes. So, what do you think is the most important lesson that you’ve learned over your career?
Armin: Never give up. It’s simple as that. There are so many situations… Well, every one of us knows this. But there are so many situations when you think, “Wow. That’s really a tough one. How can I solve this problem?” And it makes sense to say, “I want to find a solution.” And I think about this and I’m taking the time, find the best way, and in the end, come to a solution. And even during months of a lawsuit, and it can continue for years, it’s very important to keep on going, say, “I will never give up.” Because sometimes you think you will never make it, and then something happens, you find the right angle and you change the case totally. So that’s, I think, something I really learned.
Lindsay: That’s great. And what does be… Just to wrap up, what does be a part of the ILN mean to you?
Armin: Well, I’m a member of the board. So, it shows that it’s something for me. Well, first of all, it’s good news for our clients because it’s just great and relaxing to be sure if something comes up and our clients need help from a different jurisdiction, it will be no problem for us to find a firm. It’s just quickly done. And we know if we make this referral, then the other firm will do this case with the same emphasis and effort as we do. So, that’s really very, very helpful. And for me personally, I mean, it’s a great pleasure, of course. And not only the ILN meetings, but also to have the possibility to get these referrals and to have contact with clients from other jurisdictions and to have this cultural thing to explain the particularities of German labor and employment law, which are something for itself.
And it’s great. It’s really very, very helpful. And I enjoy it a lot. And it helps a lot. I mean, we have this slogan, the ILN, where lawyers become friends. And after, I don’t know, many, many years at least of membership, I can totally sign this slogan. There are many, I would say, they are friends for me, and I learned them through the ILN. Yes. So, it’s a really great network and I’m very grateful and happy that we are members.
Lindsay: Good. I’m so glad to hear that. Well, Armin, this has been a pleasure. I really appreciate it. Thank you so much. And to all of our listeners, we’ll be back next week with another guest. And in the meantime, please take a moment to rate, review, and subscribe over on Apple Podcast or wherever you listen to podcasts. And thank you very much.
Armin: Thank you. It was a pleasure. Thanks a lot.