It takes a special sort of talent to foul up the goodwill generated by the most successful office in your global network. But White & Case‘s New York management has done just that. Ever since Hugh Verrier became chair after two years of internal dithering, the discontent in London has grown exponentially.
Discontent in the banking and capital markets group, that is, for there are essentially two cultures at work here. First is the projects group, whose global success and historical importance to the firm have made it part of the White & Case establishment.
Then there’s the feistier, more entrepreneurial culture of banking and capital markets. In 2000 that business turned over $15m (£7.48m). Now it represents $120m (£59.82m) – well over half of the total London revenue.
So what’s gone wrong? The banking and capital markets group see enormous opportunities in Russia and Asia and are frustrated at New York dragging its feet. Added to this, London barely has a say within the direction of the firm.
Banking partners Maurice Allen and Mike Goetz – currently being courted by Freshfields, as we reveal today – are by no means the only rebels (there are plenty in London and Germany). But they are the ones everyone else is hiding behind, and in such a charged situation will almost certainly end up as scapegoats. Allen is also politically associated with Eric Berg in New York, his co-head of global banking and finance. Berg stood against Verrier for the top job last year and was associated with a more robust attitude to profitability and partner performance.
Meanwhile, Freshfields is licking its lips at the prospect of snaring Allen and Goetz, who have a proven track record. If Allen does end up there, he’ll have come full circle; he nearly moved there in 1995 on leaving Clifford Chance, but plumped for Weil Gotshal.
White & Case is not in the Manhattan first tier. But as a global firm it has a distinct offering and is way ahead of many of its US rivals. With 60 per cent of its lawyers now outside New York, it’s hardly playing to its strengths. Madness.
Here’s a prediction: White & Case will be more interested in finding our sources than putting the situation right. This is strategic inertia elevated to an art form.