Editors' Blog

Democracy White & Case-style leaves London with uncertain constituency

Posted 5/10/2007 by Deal Comment

Judged by a hatful of metrics, White & Case’s London office is an undoubted success.

Revenue of $172m (£84.3m) last year, up 38% since 2005; market-leading acquisition finance and project finance practices; high-profile rainmakers with key relationships with Deutsche Bank, Goldman Sachs and the Royal Bank of Scotland; eight new partners promoted at the start of this year; and one of the most aggressive lateral hiring policies in the City. All this has been achieved from a standing start in just less than 30 years, without a merger in sight. The firm is now the second-largest US firm in London by revenues, just behind Mayer Brown.

So with all that to boast about, does it matter if a London partner fails to win a place on either of White & Case’s key decision-making bodies?

First, a little recap. White & Case’s new management structure, unveiled at the beginning of this week, has been in the pipeline since early 2006. In August former Moscow head Hugh Verrier was confirmed as the new chairman — having demonstrated, according to one partner, a remarkable knack for turning around underperforming offices. Having moved to the firm’s New York office, he officially took over from Duane Wall at the beginning of this week and began by unveiling the first part of his management team.

Under the new structure, the old eight-partner management board has been replaced by an executive committee — its members chosen by Verrier — and a partnership committee elected by the global partnership. Joining Verrier on the executive committee, the main decision-making body, are New York partners Tony Khan and Dimitrios Drivas and Turkey-based Asli Basgoz. Not a Londoner in sight.

Nor has anyone from London so far made it onto the partnership committee, the group responsible for deciding compensation and the appointment of all new partners. London now has a second chance. Both Kahn and Basgoz were originally elected to the partnership committee, but Verrier grabbed both for his management cabal, leaving two spots still up for grabs.

Some London partners downplay the sting of being passed over. “It would hardly be a slap in the face if no one here got it,” one says. Still, among the 14 partners vying for the last two spots on the partnership committee are three from London: litigators John Bellhouse and Alistair Graham and project finance supremo Philip Stopford. Bellhouse is a former London office senior partner, while Stopford was a member of the firm’s management board under Wall. Graham is perhaps best known for representing three British bankers fighting extradition to the US in a case related to the collapse of Enron. Notable absentees are current London senior partner and co-head of corporate Peter Finlay and banking rainmakers Maurice Allen and Mike Goetz. According to one partner, all three were in contention in the first round of voting, but not having made the cut, they declined to stand again.

Thus, for all the success that White & Case London has enjoyed, it is faced with the chance that it may have no voice on the firm’s global management. Should no Londoner make win a place — the final two partnership committee positions are expected to be filled in a matter of weeks — it is of course unlikely that Verrier et al will simply ignore the concerns of an outpost that accounts for roughly 15% of firm revenues.

Having a representative partner in central management might soothe London’s ego, but the whole issue arguably says more about the slightly dysfunctional character of the office, with power dispersed among a delicate coalition of the six main practice group heads. It also underlines the increasingly pressing need for a single figurehead to head the London office. At the moment, the position of office senior partner is largely ceremonial and carries little power. A reinvigorated London management structure with real power vested in an office head could do much to capitalise on White & Case’s obvious successes. Finding the right candidate, particularly amid the competing interests of the banking and project finance teams, is another matter entirely. As Verrier will discover, leading a global law firm needs more than a little diplomacy.

rlloyd@alm.com

A version of this article also appears on The American Lawyer, the US sister title of Legal Week.