managing partner Duane Wall took over leadership of the global firm on April Fool’s Day in 2000. Not an auspicious start date, but since then Wall’s six-year stint at the helm of the New York-headquartered firm has been anything but a bad omen.
For someone that comes across as quite a conservative manager, Wall has been an instigator of change. During his reign, White & Case has grown to 1,900 lawyers in 37 offices across 26 countries. It also joined the elite group of firms with gross revenues above the $1bn (£692.2m) mark for the first time this year, although admittedly by the skin of its teeth, with a gross revenue of $1.04bn (£719.8m).
But while Wall has spent his term as managing partner building up White & Case’s global presence, the firm has continued to struggle to develop as a notable domestic US practice. As one industry commentator put it, White & Case suffers “in terms of market perspective, as it is not top tier for any one practice area”.
This is reflected in the firm’s profitability. Although its average global profit per equity partner (PEP) of $1.24m (£709,000) is nothing to be sniffed at, it is still far shy of the New York heavyweights. Simpson Thacher & Bartlett boasts a global PEP of $2.37m (£1.35m) while Sullivan & Cromwell‘s reported figure for 2005 is $2.59m (£1.48m).
But Wall is not about to change the firm’s international focus. In February he announced that the firm is to close its 22-lawyer San Francisco office by the end of June.
Wall claims that the details are still being ironed out, but funding for that office will be diverted to build up Palo Alto instead. The closure does, however, mean that just five out of the firm’s 37 worldwide offices are in the US.
Wall, then, will be best remembered for developing White & Case’s global presence. And he is about to leave another legacy at the firm: he has just launched an extensive review of the firm’s governance structure in the lead-up to his retirement in March 2008 in order to reflect that growth.
“We have an eight-person board for a 1,900-lawyer firm. There’s opinion among the partners that this isn’t enough,” he says. “We probably need more than one person devoted full time to the management of the firm, or we need several people who are at least expected to devote X per cent of their time.”
Under the firm’s partnership agreement, Wall must stand down at the end of his current term in two years time as he reaches retirement age. As such, the review will also examine the process of electing his successor.
Wall says the partnership is examining a range of potential changes to the firm’s structure, including whether to introduce a senior partner role; a two-tier management board; an extended network of regional management; and/or having a non-lawyer in a management position.
The resulting recommendations will be put to an equity partnership vote, with any approved changes (85 per cent approval is required) to be introduced by 1 April (yes, April Fool’s Day) next year.
The last time White & Case overhauled its governance structure was in 2000 when Wall was appointed to the then newly created role of managing partner. At the time, the firm’s four-member management committee was replaced with the current eight-seat governance board, overseen by a full-time managing partner.
Despite potentially signalling an even more dramatic change to the firm’s structure, Wall downplays the current review. “I don’t expect it to be controversial. It’s just a review of the structure… which is something that all firms should do,” he says.
In his own way, Wall has embraced change. Last year, he led a similarly extensive overhaul of the firm’s partner compensation system, replacing the modified lockstep model with a primarily merit-based system. This was largely driven to appease the international network, which had become frustrated that the former system unfairly favoured the US.
For someone that will leave a lasting legacy at the firm, Wall was a surprisingly reluctant leader at first. He admits that he climbed the management ladder almost by default. Wall moved to London in 1980 (his second stint in the UK after spending four years here as an associate) with a view to eventually heading the local office. However, less than a year later the firm’s banking advisory practice head passed away and Wall was called back to the US to take over.
After four years in the role Wall was again promoted, to head of corporate, and subsequently elected to the management committee.
“When I first became head of corporate I tried to convince [chairman] Jim Hurlock not to make me do it, as I was having a lot of fun practising law,” he says.
But Wall is clear that he quickly saw the benefits of having such a hands-on role in the firm’s development, saying: “Once I became involved in management, I saw the advantages of being in a position to help develop the firm’s strategy, to decide how to implement it and motivate partners to achieve the objectives you set.”
One of the key areas that Wall has been crucial in developing is the firm’s international network.
White & Case was an early leader in the global legal marketplace. It opened in London in 1971, launched its first office in Asia (Hong Kong) in 1978 and was an early entrant in Central and Eastern Europe, opening in Poland, the Czech Republic and Moscow in 1991.
However, the firm has struggled as a result of its rapid global expansion. Wall’s critics claim that the firm overextended itself early on in his leadership, with one lawyer claiming that he has not “steered White & Case on a steady course”. The San Francisco and Palo Alto offices are a case in point.
Shortly after Wall’s appointment as managing partner, the firm expanded with its second office in China, in Shanghai, while in Europe the firm hurried to expand through mergers with German 40-partner practice Feddersens in 2000 and Italian firm Varrenti e Associati in 2001.
At one stage White & Case was also in merger talks with Rowe & Maw before the UK firm finally opted for its tie-up with Mayer Brown & Platt.
Such rapid expansion left White & Case with a dismal global PEP of $775,000 (£446,200) in 2000 and $865,000 (£498,000) in 2001, while gross revenue was half its current level at $491m (£282.7m) in 2000 and $603m (£347.2m) in 2001.
Wall has recently opted for a more cautious approach – a strategy that is bearing fruit if the firm’s revenue and profit are any indication.
Wall says the firm’s current strategy is to test the ground before officially entering new jurisdictions to ensure client demand. As such, the firm also operates an associated consultancy in Geneva. Meanwhile, its customs-focused ‘consultancies’ in Taipei and Manila were merged into the firm’s China practice last year.
“China’s important to us and we’re looking to build up our resources in Beijing. The practice there is very tax and customs-related, so we decided to focus our practice on China and move our people there,” he says.
Spain is another key focus, with Wall adamant that the firm will launch there “within five years”.
White & Case also terminated its exclusive tie-up with associated Indian firm India Law Services last year in order to enable referrals with a wider section of the local market, according to Wall.
However, Wall is clear that the firm is not searching for much growth beyond those three key jurisdictions.
“Our geographical reach is pretty much complete; we might fine-tune it, but it’s now about bedding that down. We’re now working on strengthening our principal offices and practice areas,” he says.
That might not be as sexy a challenge for his successor. However, Wall’s heir had better not stay still.