WFW appears to be going swimmingly under its post-Greville dual management team.
It’s a valid point, but hails from an unlikely source. Over the past few years, WFW has hardly set the legal world alight as an industry trailblazer. Despite steady growth, the firm has remained a relatively low-profile beast, often regarded primarily as a shipping and finance boutique. Less a shark, more an armadillo.
But that may be an unfair assessment. Under the leadership of managing partner Michael Greville, who unexpectedly left his post in November to return to fee-earning after 12 years, revenue at WFW rocketed by almost 100 per cent – from £52m in 2001/02 to £102.1m in 2012/13 (28 November 2013). The firm was also busy opening a raft of offices, most recently in Madrid, Munich, Milan, Hong Kong and Frankfurt.
On 15 January, WFW’s leadership baton was picked up by the firm’s first-ever co-managing partners, Wegener and Chris Lowe (13 December 2013). Both have headed various offices over the years and spent stints on the firm’s management committee, so it was hardly surprising that when they hit the campaign trail in December it was under the banner “more of the same”.
While there is unlikely to be a strategic overhaul at the firm, WFW’s new pair at the top do have some subtle changes in emphasis up their sleeves.
Firstly, the duo are keen for the market to stop seeing WFW as purely a finance and shipping-oriented firm. In the 2012/13 financial year, corporate was the most profitable part of the London office.
“We’re much more than a finance and a maritime or energy firm,” insists Wegener. “We’d like to see investment in corporate, and we’ll build that in order to get up to a balance with finance.
”There’s a perception we’re a little underweight in corporate in London but we’re very strong in other jurisdictions like Germany. If we can do it in Germany and Singapore, why can’t we do it here?”
In fact, corporate isn’t the only part of the firm being bolstered behind the doors of WFW’s City outpost. While international growth remains a key part of firm strategy, Lowe and Wegener are putting a particular emphasis on building out the firm’s wider practice in London.
WFW’s sole UK office already accounts for 40 per cent of its entire global revenue, but the new co-managing partners have enlisted recruiters to push forward on headcount growth in the City – keen to bulk up across a range of practice areas including real estate, corporate, finance, energy and litigation.
Underpinning these changes is the pair’s sincere belief that, “just because it’s done that way doesn’t mean it’s always the right way”.
And their response to the recent HM Revenue and Customs crackdown on partnership tax evasion suggests that they’re not all talk.
While a raft of other firms including Hogan Lovells and Addleshaw Goddard asked non-equity partners to inject up to £100,000 into the firm in order to meet HMRC’s demands, WFW took a sideways approach. The firm asked its City-based fixed-share partners (FSPs) to put just over 20 per cent of their salaries into a separate pot, to be returned with either a bonus or a loss at year-end depending on WFW’s global performance (27 May 2014).
“We don’t need the cash, and a cash call triggers all sorts of questions including those relating to voting,” admits Lowe. “We began looking at a variable share structure, as it’s effective, efficient and a good buy-in to the business of the firm.”
It was also a great opportunity for the pair to showcase their consensus-based approach to firm politics, holding one-on-one meetings with each of WFW’s 20 FSPs to discuss the potential changes.
“There was sensible concern about the down-side risk, but there was no hostile kickback and everyone got behind the idea,” says Lowe. Ultimately, the effort paid off, with 100 per cent of those affected agreeing to participate in the scheme.
So far, so good for WFW’s new leadership, but the proof of their success will be in the financial results over the next couple of years. In 2012/13 the firm experienced a financial wobble, with revenue inching up 2 per cent but average profit per equity partner dropping by 13 per cent to £388,000 (16 July 2013).
The 2013/14 results are yet to be unveiled, but Lowe and Wegener estimate that they’ll demonstrate an uptick of about 10 per cent for 2012/13, with PEP moving on the same upward trajectory for the first time in three years.