At the end of January, White & Case and Weil, Gotshal & Manges confirmed strong financial results for their London offices in 2007.
White & Case excelled in revenue growth, increasing its top line by 37 percent to reach $235.7 million, up from $172.2 million in 2006. The 420 fee-earner London office also improved its profitability with profits per equity partner (PPP) hitting $1.528 million, compared with $1.276 million the year before.
Weil stood out in terms of profitability, as the firm's PPP almost doubled, jumping from $1.38 million in 2006 to hit $2.69 million last year. The New York-headquartered firm saw much more modest growth in revenue, which increased from $105.7 million to $112.7 million.
"It's been a good year and we're very happy, but I can't believe that anyone you speak to won't say that," Weil London head Michael Francies says. "My life was a lot easier last year [than the previous year]," he jokes, admitting that the office's profitability fell short in 2006.
He attributes part of the office's success to some key lateral hires that the firm has made in recent years, including a team of private equity specialists led by Marco Compagnoni. That group joined Weil from U.K. firm Lovells in the first half of 2006.
The Compagnoni hire was part of Weil's strategy to focus more resources on its private equity practice in London, which counts U.K. buyout houses Terra Firma Capital Partners Limited and Apax Partners among its client base. (Apax owns a majority interest in Incisive Media, the parent company of The American Lawyer and Law.com.) However, Weil also saw the departure of its leading restructuring partner, Chris Mallon, to Skadden, Arps, Slate, Meagher & Flom in November 2007. With the collapse in big-ticket private equity, the firm's chances of repeating its 2007 growth look slim. "We've budgeted for 2008 to be flat, but we'd like to see some growth," Francies adds.
In contrast, White & Case has a much better chance of continuing its growth trajectory. The firm is full-service in London, with leading practices in project finance, banking, capital markets and emerging markets M&A. With its spread of lawyers outside the United States -- according to the 2007 Global 100, 63 percent of the firm's 1,800 attorneys are based outside of its home jurisdiction -- White & Case is also well positioned internationally. Continued growth in emerging markets in Russia, the Middle East and Asia -- where deals often involve input from London or have an English-law element -- should play to the firm's strengths.
London senior partner Peter Finlay emphasized that White & Case's performance in 2007 was part of a consistent growth trend since 2003, when the firm reported London revenues of $72.1 million. "We will grow this year," he predicts. "We're well-hedged in terms of our practice groups, we've put more resources into our restructuring group, and our litigation practice is already busier."
In a few months, attention will focus on the performance of the leading U.K. firms. One senior Magic Circle partner forecasts double-digit growth for most of London's elite when they announce their results after their financial year closes at the end of April.
Over the last few years, most London-based firms have dramatically improved their profitability and have also seen their results improve in dollar terms, thanks to the weakness of the U.S. currency. According to last year's Global 100, Magic Circle firm Linklaters had PPP of $2.385 million, placing it among the world's most profitable practices. Slaughter and May remained top dog among English performers, with its PPP hitting $2.495 million.
