Editors' Blog

Keeping up with the White & Cases?

Posted 5/02/2008 by Richard Lloyd

At the end of January, White & Case and Weil Gotshal & Manges confirmed eye-catching 2007 financial results for their London offices.

White & Case excelled in revenue growth, increasing its top line by 37% to reach $235.7m (£119m), up from $172.2m (£87m) in 2006. The 420-lawyer London office also improved its profitability, with profits per equity partner (PEP) hitting $1.53m (£774,000), compared with $1.28m (£646,000) the year before.

Weil stood out in terms of profitability, as the firm’s PEP almost doubled, jumping from $1.38m (£699,000) in 2006 to $2.69m (£1.36m) last year. However, the New York–headquartered firm saw much more modest growth in revenue, which increased from $105.7m (£54m) to $112.7m (£57m).

“It’s been a good year and we’re very happy, but I can’t believe that anyone you speak to won’t say that,” Weil London head Michael Francies says.

“My life was a lot easier last year [than the previous year],” he jokes, admitting that the office’s profitability fell short in 2006.

He attributes part of the office’s success to some key lateral hires that the firm has made in recent years, including a team of private equity specialists led by former Lovells rainmaker Marco Compagnoni, who joined the firm in 2006.

The Compagnoni hire was part of Weil’s strategy to focus more resource on its private equity practice in London, which counts UK buy-out houses Terra Firma and Apax among its client base. However, Weil also saw the departure of its leading restructuring partner, Chris Mallon, to Skadden Arps Slate Meagher & Flom in November 2007. With the collapse in big-ticket private equity, the firm’s chances of repeating its 2007 growth look slim.

“We’ve budgeted for 2008 to be flat but we’d like to see some growth,” Francies adds.

In contrast, White & Case has a much better chance of continuing its growth trajectory. The firm is full-service in London, with leading practices in project finance, banking, capital markets and emerging markets M&A. With its spread of lawyers outside the US — according to the most recent American Lawyer/Legal Week Global 100, 63% of the firm’s 1,800 lawyers are based outside of its home jurisdiction — White & Case is well-positioned internationally. Continued growth in emerging markets — in Russia, the Middle East, and Asia, where deals often involve input from London or have an English-law element — should play to the firm’s strengths.

London senior partner Peter Finlay emphasises with some justification that White & Case’s performance in 2007 was part of a consistent growth trend since 2003, when the firm reported London revenues of $72.1m (£36.5m).

“We will grow this year,” he predicts. “We’re well hedged in terms of our practice groups, we’ve put more resources into our restructuring group and our litigation practice is already busier.”

In a few months, attention will focus on the performance of the leading UK firms. One senior magic circle partner forecasts double-digit growth for most of London’s elite when they announce their results after their financial year closes at the end of April, even if six months of market turmoil will likely slow their growth somewhat.

Over the last few years, most London-based firms have dramatically improved their profitability and have also seen their results improve in dollar terms, thanks to the weakness of the US currency. As such, the pressure will be on US law firms operating in London to match up to White & Case’s startling recent expansion.

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