Funny how multijurisdictional firms are viewed in binary. First, there’s the global elite made up of the super-profitable group of New York and London transactional firms.
Then there are the internationalists. They may not be blessed with quite the same M&A heritage, but compared with the strategic sterility of much of the Sweet Sixteen many internationalists are fascinating examples of self-made organisations where expansion is king.
Actually, the internationalists are a more diverse bunch than the binary view suggests. Take White & Case, whose institutional bias is historically more akin to Clifford Chance, say, but whose global growth rate has not kept up with those of its internationalist rivals. In our interview with White & Case chairman Hugh Verrier (see page 16) it’s clear that senior figures in the firm lay considerable stress on the concept of a unified partnership. Unfortunately for those senior figures, the comparative growth success of White & Case’s rivals implicitly makes the case for the much-derided Verein, operated by the permanent revolutionaries at DLA Piper and Norton Rose. White & Case’s current structure means it is unable to pursue the route of serial acquisition because of potential integration issues. Verrier reveals that White & Case is “studying” Korea and Australia, but we won’t hold our breath.
The entrenched timidity when it comes to acquisitions wouldn’t matter a jot if White & Case’s internal culture prioritised organic growth. For years, cross-selling was stymied by an office-centric accounting system that allowed silos to build up. Compare this with Reed Smith, which upon merging with Richards Butler instantly imposed a remuneration system that rewarded intra-firm referrals.
As always, a law firm pays McKinsey to come up with the darned obvious, and following the consultants’ report three years ago White & Case finally moved to a P&L model based on regional practices and sector groups. But it took a crisis to bring about a change in mindset; one partner now admits the 14-partner mass resignation to Latham early last year was a necessary wake-up call. The question now for White & Case is whether the habit of caution is too ingrained. Time to stop aping Cleary and start making like Baker & McKenzie.