Case for the defence
16 October 2011 | Updated: 17 October 2011 9:49 am | By Matt Byrne
12 February 2014
6 February 2014
13 October 2014
24 March 2014
24 February 2014
Firm chair Hugh Verrier and London chief Oliver Brettle have shored up White & Case’s storm-tossed City office, but can
they now make headway globally?
Eighteen months ago White & Case was in turmoil. Its London office in particular was displaying all the hallmarks of a firm on the brink. Over the course of a disastrous weekend in February 2010 13 partners left for Latham & Watkins, including a highly rated four-partner bank finance and capital markets team headed by Christopher Kandel.
Today the firm is keen to send out a message that those days are history: White & Case’s world has stabilised, no partner has left the London office for 18 months, the City is a happy place. Speak to enough current partners and it becomes a mantra.
The US firm is on a charm offensive to coincide with the 40th anniversary of its London office, marked by a party at Mansion House last Wednesday (12 October) attended by around 500 clients.
Hugh’s that man
And firmwide chairman Hugh Verrier, the man vilified by former partners as one of the causes of the turbulence in recent years, is in town. As the Americans are fond of saying, Verrier is ’reaching out’.
This in itself is a change. Verrier has never been the most enthusiastic courter of media coverage. He also has a reputation, deserved or not, as something of a difficult interviewee.
Indeed, on the morning The Lawyer meets him it is initially left to London office executive partnerOliver Brettle to handle the pleasantries as we unpack, get some coffees in and eye the bacon sandwiches laid out for breakfast.
Verrier, meanwhile, looms large in the corner as he helps himself to a drink. Silently. Small talk does not appear to suit him, although his presence in the room is undoubtedly felt.
The White & Case chairman says he may have a cold, the result of October’s freakishly hot weather, which could be why he is leaving the early doors talking to Brettle. But he gets into gear once the conversation turns to the strategic direction of the firm he has headed since 2007 and the apparent stabilising of London.
Ready steady go
“Stabilising means there’s an assumption that there was something that needed stabilising,” intones Verrier, speaking slowly and with just a hint that he might not be entirely serious. “No doubt, if a partner’s calling up a newspaper trashing the management of his firm it creates the impression of unhappiness…”
The number of partner exits White & Case suffered last year, well-documented in these pages, was certainly more than an “impression”. But even former partners, many no fans of the White & Case chairman, will admit that the firm - and the London office in particular - has stabilised since last year.
“I agree that the place has stabilised and Hugh’s done a pretty good job,” concedes one former London partner. “There were significant differences between people and groups, and once they’d left the place became harmonious. Getting rid of people who disagree with you and bringing in those who don’t usually has that effect.”
Another former London partner describes White & Case’s management style - for which, read Verrier’s - as “Soviet”. Buttoday the project finance lawyer, three months into his second term as chairman after his June 2011 re-election, is playing the role of Gorbachev rather than Stalin.
The most recent measures White & Case has put in place to continue steadying its once-rolling ship came last week. The firm’s eight-member partnership committee, which handles new partner admissions and remuneration, was unveiled, complete with two London partners, dispute resolution specialist Jason Yardley and finance partner Chris Utting.
“I’ve espoused the virtues of the rotation of leadership,” says Verrier. “It’s healthy.”
The irony of this statement is unlikely to have been lost on Verrier himself, who stood unopposed for the chairman’s position, a fact that got tongues wagging as to why, in a firm the size of White & Case, nobody else felt like having a go.
Was he surprised nobody stood against him?
Verrier pauses. He does not say a word. Then he turns to Brettle and asks, somewhat bizarrely: “Were we surprised?”
Following a succession of platitudes trundled out by Brettle - “happy and content… broad appeal…” - Verrier speaks again: “Any partner can run for chair merely by sending an email.”
Were there any other names in the hat?
“I never heard from any partner in the firm that they were thinking of running,” he states flatly. “Not one.”
Verrier, clearly, is in the mood to put the past behind him and focus on the future; although he is happy to address another election-related issue - namely that he had been obliged to change the four-member executive team as a condition of his re-election.
“We could have continued with the same four people,” stresses Verrier. “I was not obliged [to change it].”
Last month the composition of firm’s new executive committee, headed by Verrier, was announced. Along with Verrier, Brettle also retained his place, while Brussels office executive partner Jacquelyn MacLennan and David Koschik, a New York-based banking partner and regional section head of banking in the Americas, came in to replace New York corporate partner Tony Khan and Istanbul corporate partner Asli Basgoz.
“Jackie’s and David’s appointments reflect our wish to combine several things in leadership,” explains Verrier, highlighting the need for geographic responsibility and practice group representation at the top level alongside a portfolio of functionalresponsibilities.
MacLennan, for example, is responsible for all client-facing initiatives, while Koschik has been tasked with improving service delivery. As with most large firms, the key is integration.
In’t it great
“Our key challenge is integration,” admits Verrier. “So we also created a client programme four years ago. Client relationships are one of the best integrators.”
Brettle adds that the pace of the client programme, which focuses on a small group of clients that can benefit most from White & Case’s international capabilities, has accelerated recently.
“There isn’t a fixed number, but the programme, which currently has a mix of financial institutions and corporate clients, will be expanded in 2012 to include clients with global and regional footprints,” Brettle says.
Following a turbulent four years, during which Verrier not only oversaw the turmoil in White & Case’s London office and the international platform more generally, but also had to adapt his firm to the financial crisis, integration is certainly key.
Verrier was the man tasked with slashing headcount to match the levels of work, never a task likely to endear him to anyone.
“It was painful,” admits Verrier. “But it was preceded by about 10 years of boom. We also reorganised the entire firm. This wasn’t really driven by the recession, but it allowed us the opportunity to put in place a structure I felt was missing and was required for us to become a more effective global firm.”
The restructuring, now three years old, remains fundamental to understanding how and why the London office is less of a noisy place than it was 18 months ago.
Prompted by a McKinsey strategy report, White & Case moved from an office-centric system, whereby each office had its own profit and loss (P&L) report, to a model based on regional practices and sector groups, the latter then a new concept at the US firm. Current partners insist that the regional approach is bearing fruit.
London projects partner Philip Stopford, head of the Western Europe, Middle East and Africa (Wemea) project and infrastructure finance group, says it helps with staffing issues on cross-border projects and reduces the risk of the “silo” mentality caused by an office approach.
Banking and capital markets partner Rob Matthews adds that having a regional P&L has the potential to be instrumental in helping White & Case achieve its ambition of replicating its emerging markets capital markets brand in Western Europe.
“Having a regional P&L helps because everybody has a stake in the region’s success - it’s not just about a particular office,” explains Matthews.
The regional approach chimes with White & Case’s global footprint, which has long been its calling card. But the past few years have seen the lead it once had in its core emerging markets and global model eroded as rivals increasingly mirror its strategy. Indeed, during the 18 months or so that the firm has been busy working on integration, a succession of firms have put top-line growth at the top of their agendas.
Verrier is convinced, however, that White & Case still has a convincing sales pitch.
“Two-thirds of our lawyers are outside the US,” says Verrier. “But at our core are strong New York and London offices and a unified partnership. We didn’t grow by acquisition or by having different profit pools. We’re not a Swiss Verein - it’s all been organic growth.”
Rivals, however, claim that White & Case has lost its mojo. Well, they would, wouldn’t they? But a comparison with Baker & McKenzie, a similarly global and emerging markets-focused giant, is certainly illuminating.
As the table shows, the performances of both firms’ London offices in the past five years have been pretty similar. White & Case in London has grown its revenue by 7 per cent, from $172.2m (£109.3m) to $184m, while Bakers’ revenue has shrunk by 7 per cent.
Globally, however, the difference is more stark. White & Case’s total revenue has grown by 8 per cent since 2007, while Bakers’ has mushroomed by 49 per cent over the same period. Other firms, most notably Norton Rose, have enjoyed even more spectacular expansion.
“It’s true we did have early-mover advantage in going global and now other firms have set out on a similar journey,” agrees Verrier. “There are many new entrants in the global law firm arena and therefore some erosion of personnel and clientele. But we have the benefit and strength of decades of building up.”
Be White back
Verrier may not be everybody’s favourite lawyer, but today at least he goes to some lengths towards painting a convincing picture of a man candid about the issues his firm has faced and continues to face and passionate about its place in the world. He is also open about growth prospects.
“As soon as we’re permitted we’ll establish an office in South Korea and we’re studying Australia - it’s quite high up our list of considerations,” he reveals.
Growth in London has also been addressed, with a string of solid hires recently, including bank finance partners Lee Cullinane and Jacqueline Evans from Mayer Brown, project finance partner Caroline Miller-Smith from Linklaters and capital markets specialists Michael Immordino and Ian Clark from, of all places, Latham.
But White & Case’s London office is only the most visible part of the strain the firm has been under in the past few years. The firm’s lacklustre top-line growth is matched by its relatively low profitability for a major US firm, with average profit per equity partner down by 2 per cent last year to an underwhelming of $1.56m.
Now that Verrier has embarked on a new term his job is to sell his vision of White & Case in 2015. Global firm? Yes. Global leader? The jury’s out.
And while its London office might have stabilised - and frankly become a duller place in the process - the more important issue for Verrier is how White & Case regains the ground it has lost on the world stage.
White and Case
Baker & Mckenzie