White & Case London office demands recognition from those damn Yankees” /> It’s just as well there’s a little less work around, because last week most White & Case London finance partners spent most of their time in internal meetings. Not just the individual interviews with global chairman Hugh Verrier, who had flown over the previous Sunday (9 March), but the group meetings too, such as the one on Tuesday night (11 March) called with around an hour’s notice. In that meeting the New Yorkers confirmed the departures of Maurice Allen and Mike Goetz.
“Our finance group is completely unloved and unregarded.” This bald statement by a White & Case lawyer last week sums up the level of distrust in London towards New York. The management certainly has some rebuilding to do.
There are two tasks for them. First, how is White & Case going to stabilise London? And who at White & Case will fill the shoes left empty by Allen and Goetz?
Much hangs on Deutsche Bank, a highly symbolic client. The London office acts for a good handful of other investment banks, such as Credit Suisse, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS (as well as targeting UK-headquartered institutions such as Barclays), but the relationship with Deutsche has been the bedrock of the finance practice. In 2003 White & Case billed Deutsche $20m (£9.9m) worldwide. In 2007 the London office billed Deutsche that amount alone – and that was more than the New York office billed it. The man with the keys to Deutsche was not Allen but Goetz, who was sent over to London in 2001 to focus on building a UK relationship with the bank. His success was spectacular.
As The Lawyer reported last week (10 March), global finance head Eric Berg is being seconded temporarily to London from New York. This is partly to rebuild transatlantic bridges, but one suspects that the Deutsche and Morgan Stanley relationships swung it – Berg is a relationship partner for both banks.
Ironically, it was Berg who championed Allen’s recruitment from Weil Gotshal & Manges in 2000. Keen White & Case observers have noted that Berg’s apparent reabsorption into the inner cabinet is surprising – Berg was pitted against Verrier for the top job. (“Americans like nothing better than someone who’s repented and seen the light,” quipped a White & Case source last week.)
Politically significant was the appearance of Dave Koschik in London last week as part of Verrier’s peacekeeping force. Another New York banking partner, Koschik is seen as a heavyweight by many of his colleagues in London.
But White & Case can’t rely on Berg or Koschik in London for ever. The challenge is how to integrate other partners into the key banking relationships. The frontrunner here is Chris Kandel, who arrived in 2005 from Cadwalader Wickersham & Taft and who has his own relationships within Deutsche dating back to his time at O’Melveny & Myers more than a decade ago – plus strong ties to Goldman Sachs.
Kandel aside, there is a quartet of junior banking partners who are rated but who lack many senior contacts at the bank (although a series of City firms have them in their Antonia Rawlinson, have worked with Deutsche a little; Kate Allchurch is close to BNP Paribas, while Magdalene Bayim-Adomako and Barbara Choi have advised across a variety of banking clients.
The capital markets group, which came under Allen’s general finance remit, is also known to have been targeted by headhunters. Indeed, newly made-up partner Peter Epp jumped ship for Herbert Smith last month.
But there is patchiness in capital markets throughout White & Case’s global network – not enough in New York and not enough lawyers in Asia, claim former White & Case lawyers, who also argue that London shows that you can grow capital markets from a standing start.
So what of Verrier’s strategic options? One thing London finance has been calling for is for the firm to be more organised around practice group lines to be better able to tackle emerging markets.
“We know what we’re doing and we need control because it’s a nasty market and we need to be able to decide what to do,” says a source close to the firm. “We need to gain presence on the ground in Asia, and especially in Russia.”
It would certainly be the logical conclusion of a process that began in January 2003 at the White & Case partner retreat in Florida. Allen and Goetz were heavily involved in pushing for change at the time, and White & Case vowed to focus on fewer, but bigger, priorities. Banking and capital markets were two of the six practice areas earmarked for investment – the others being tax, disputes, projects and corporate.
And then there’s pay. The signs of revolt from the finance practice in London were unmistakeable last week. The firm is currently in the throes of assessing partner compensation, with the final decisions being made by the end of next month – something that has put partner pay right at the top of the agenda at the firm’s embattled City office.
As a White & Case source told The Lawyer last week: “We’re paid in dollars, not sterling, and we’re underpaid compared with our competitors. Something needs to be done.”
The issue is particularly sensitive given London’s lack of representation on the firm’s powerful partnership committee, which has the final say on remuneration across the firm.
The move that would pacify UK finance partners enormously would be giving London a say in management. “We’re the principal revenue generator outside New York!” exclaims a partner. And yet Verrier’s selection of the executive committee last year pointedly excluded London. Instead, he picked Tony Kahn, corporate finance head in New York, Asli Basgoz, a finance partner in Istanbul, and Dimitrios Drivas, a New York IP partner.
“It’s not exactly representative of the global firm in terms of offices or groups,” says a former White & Case lawyer drily.
London’s importance to White & Case has been fuelled by finance. In 2000 that business brought in £7.5m. It now accounts for nearly £60m – nearly half the London office’s total revenue. The future of the London office may rest in the happiness or otherwise of its finance partners.
but can the finance partners be appeased? By Catrin Griffiths