White & Case puts on brave face as thirteen partners quit for Latham
Has the US firm learnt nothing in the two years since losing Allen and Goetz? asks Gavriel Hollander
Chris Kandel
Latham & Watkins’ capture of thirteen partners from US rival White & Case has raised eyebrows throughout the City. Not since Denton Wilde Sapte saw 11 partners move to DLA Piper in 2004 has there been such an exodus.
While the loss of five partners from three of White & Case’s Middle East offices must hurt, it is the defection of a group of four from the London bank finance and capital markets team, including group co-head Chris Kandel, that could cause the most severe long-term headache for White & Case.
Kandel’s team, including Sam Hamilton, Brian Conway and Jayanthi Sadanandan, was viewed as central to the firm’s success in London - an office that has grown quickly to become one of the most important in terms of firmwide profitability.
Latham’s City finance team has not been as visible as its counterpart at White & Case, but the firm’s undoubted earning capacity has allowed it to look to new areas.
“I’ve always viewed them as a bold firm in terms of their willingness to expand,” says a London-based partner at another US firm. “The financial crisis has created opportunities to think about doing some things differently and they’re obviously going long in finance.”
Besides Kandel’s longstanding relationships with the likes of Deutsche Bank and Goldman Sachs, Latham can also expect to benefit from Hamilton’s links with Nordic Capital.
“I don’t think there are any people going over who don’t have strength with key clients,” says the London-based partner.
So where does all this leave White & Case’s much-vaunted stable of banking clients? Much of the London practice’s success was built on relationships with Deutsche and Goldman, relationships that are now under threat.
Although the London bank finance team has been reduced to a core of just three partners, and despite one magic circle corporate partner’s claim that “it’s the end for White & Case in London”, the firm is far from ready to give up on the team.
“We’ve built it up largely from scratch before so we can do it again,” insists Magdalene Bayim-Adomako, who has become sole head of the practice following Kandel’s exit. “We can’t look backwards too much, our focus is on the business and on clients. We’ve spoken to them and reassured them we’ll continue to meet their needs.”
Magdalene Bayim-Adomako
That said, Bayim-Adomako, Barbara Choi and Antonia Rawlinson, who is due to return from maternity leave shortly, do not have the same pull with the big banking clients as some of those who left, which leaves ongoing relationships open to question.
“Deutsche likes Latham on the high-yield side,” says a City finance partner. “They’ve seen the writing on the wall at White & Case and aren’t sure they’re a long-term bet.”
It is not a view shared by White & Case, with senior figures repeatedly emphasising the firm’s global reach as a means to hang on to global clients while the London office toughs it out.
“We’re bullish,” says firmwide head of banking Eric Berg. “We view it as a setback. When anyone leaves you try to learn from it and improve, but we know we’ll be fine.”
Berg says he expects at least one partner to relocate from New York while a search for senior finance lawyers gets underway in earnest. He dismisses claims that London’s role will diminish.
“The market will be more competitive now, but this is a competitive business and the way you win is by being better than anyone else. I’m confident we will be,” he says.
But the discontent in the office was apparent as far back as 2008, when global co-head of banking Maurice Allen and his London counterpart Mike Goetz packed themselves off to Freshfields Bruckhaus Deringer.
Eric Berg
At the time dissatisfaction with the firm’s management structure was widely cited as the reason for the pair’s departures, with London partners understood to be unhappy with their lack of presence among the firm’s management. According to some it is a problem that has not gone away.
“Nothing has fundamentally changed,” says a City lawyer familiar with the firm. “You have a management that’s not particularly in tune with the finance practice and not particularly concerned whether it stays or goes.”
The reference is to a perception that the London finance practice, despite all its earning power, is undervalued by White & Case’s senior management. The fact that neither last month’s mass exit nor the departure of Allen and Goetz are isolated incidents gives the argument a certain amount of heft.
The signs that something was afoot were present last summer when restructuring partner Dan Hamilton - “undervalued and underpaid”, according to one former colleague - upped sticks for Ashurst. Hamilton followed capital markets partner Tim Jeveons and UBS relationship partner Rachel Hatfield out of the revolving door.
The firm is inevitably making happy noises about recruitment and relocation plans to keep London buoyant, but this is a “sticking plaster approach”, according to the City lawyer.
“They need to look at why these people are unhappy and dissatisfied in the first place,” he adds. “London’s had no strong central management, it’s like a bunch of tribes.”
The mood might be optimistic, but the sudden departures of such a big swathe of partners to a major rival is a body blow to the firm - and one from which it will be difficult to recover quickly.
Readers' comments (19)
Anonymous | 8-Feb-2010 4:43 pm
Oliver, Oliver, Oliver......what have you done? All those redundancies, round after round of them!
An employment partner loosing all these staff says a lot.
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Anonymous | 8-Feb-2010 11:52 pm
This is what happens when people just for whatever reason "wind up" working at a firm, as opposed to wanting to be there because they truly love the culture and management.
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Anonymous | 9-Feb-2010 9:50 am
Eric Berg rightly states that a firm has to be better than others to win work. However, he gives away the show when he says that W&C will be better in the future - which means that it has a quality problem now. That is the issue - clients need quality now.
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Anonymous | 9-Feb-2010 10:27 am
Even if culture at W&C was the reason people joined, the culture has changed significantly since HV and his gang have taken over. Given the bad blood, W&C will not be able to attract top notch recruits.
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Anonymous | 9-Feb-2010 4:54 pm
I'd agree with the last comment. W&C was a positive happy firm to work for. We worked hard but the environment was fair. Over the last couple of years things have changed. The way to survive was to watch your back and see who was plotting. There have been numerous rounds of redundancies and no one trusts anyone anymore.
Move over Mr Brettle.....
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Anonymous | 10-Feb-2010 10:05 am
It is important to point out that the bad blood is not limited to the London office. This negative sentiment is prevalent all over the global network of White & Case. First Asia collapsed after all of the key people left. Then the London office and W&C's European operations started to disintegrate. Now it is the core of the London office and the Middle East operations. It is only a matter of time before the New York and North American operations implode, bringing down the entire international network. What was built up over decades has collapsed in a couple of years under the stewardship of Hugh Verrier!
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Anonymous | 11-Feb-2010 7:47 am
The last post is a pretty accurate summary. Hint to The Lawyer - go fishing in the W&C European operations to see which offices have had declines over the last few years. It could make for an interesting article.
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Anonymous | 11-Feb-2010 7:55 am
It is surprising how much bad blood is out there re W&C. Other firms do not seem to have generated as much venomous commentary. There are probably a lot of W&C folks (past and current - each for their own purposes) that just want to turn over the rock and expose the crawly things to the sun.
As to NYC, those law students you are trying to hire are also reading these posts - so much for drawing from the top law schools.
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Anonymous | 11-Feb-2010 3:53 pm
spot on there is a lot of bad blood! take it from me!!!!!
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Anonymous | 12-Feb-2010 10:05 am
One has to wonder whether top management is even aware of what is going on in its own house. Perhaps they are just being fed self serving information.
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Tim Smith | 12-Feb-2010 11:08 am
these guys only hear what they want. Its a chnaged environment now with new London managment and the fear of "another" round of redundancies......
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Anonymous | 12-Feb-2010 11:32 am
Here is another chance for political score settling. Who is to blame for the latest fiasco and the lame reactions from W&C?
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Anonymous | 12-Feb-2010 12:25 pm
In London there was a marked change when the London management changed. Fundamentally one needs to look at who is steering each office, and in Londons case its Oliver Brettle.
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Anonymous | 12-Feb-2010 4:36 pm
Mr Brettle needs to take legal employment advice ...... quickly before the ship sinks..... remember titanic????
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Anonymous | 12-Feb-2010 4:39 pm
Its says it all when the second round of redundancies resulted in a very high number of voluntary redundancies. Even in times of recessions we were all shocked!
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Anonymous | 12-Feb-2010 11:49 pm
I'd agree with the comment above - management changes and the lead figure of the London office has changed things for good. Its time to go when the top bod makes it that that bad to be in.
At that point it was easier to take what was on offer via the 'round' of redundancies.
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Anonymous | 16-Feb-2010 5:09 pm
W&C started off in London as an enterprising and fun place to work. Beginning 2005 it all started to go down hill with B class partners taking on leadership roles. No mentoring, no credit where due, just a lot of selfish partners and paranoid senior associates. And this is from someone who resigned on his own terms due to relocation issues. For any law students reading, look elsewhere, this is not a nice place to start your career.
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Anonymous | 17-Feb-2010 11:07 am
Also no lateral partner in their right mind would go to W&C, and that is not just the London office. Too many entrenched partners that will not let go of their power, and weak management that doesn't know what is going on in their international offices and doesn't have the interest to do a review with the troops actually on the ground
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Anonymous | 17-Feb-2010 11:36 am
From the comments on this site, White and Case appears no different from any other law firm.
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