White & Case was another firm to post muted financials for the last year, as a bullish 2021 gave way to a 2022 struggling under the weight of a deal slowdown, inflation, high interest rates, supply chain disruptions, and geopolitical conflict.
Global revenue declined by 1% from $2.87bn to $2.83bn, and net income dropped by 11% to $1.09bn. Profit per equity partner (PEP), meanwhile, suffered a significant 20% drop from $3.5m to $2.8m. This took its PEP figure below the $3m mark crossed in 2020, and was the lowest figure reported since 2019 when it hit $2.6m.
The decline in PEP must be seen in the context of continued growth in headcount. The number of partners rose by 5% to 678, with a 7% increase in equity partners, to 390. The total number of lawyers at the firm swelled by 6%, climbing from 2,464 to 2,616.
London revenue remained broadly flat, increasing 1% from $445m to $451m. For context, the City office saw an 18% revenue hike in 2020 and a 12% uptick in 2021.
Speaking to Legal Business, London partner and firm executive committee member Oliver Brettle emphasised external shocks. ‘I think we did well to keep our revenue at more or less the same level as 2021. Of course, you don’t want to go down at all. But to drop by only 1% on what was an exceptional 2021 is, I think, quite an achievement.’
‘We had to deal with, among other things, the closure of a substantial office as a result of the Russian invasion of Ukraine, as well as the effects of the invasion on capital markets.’
Tumult in exchange rates also harmed the firm’s figures. ‘Lots of our UK work is billed in pounds, our European work in euros, our Japanese work in yen, and so on. And all of those currencies went down very significantly against the dollar.’
That headline 1% decline in revenue comes after a 20% jump in 2021 – the biggest year-on-year increase in 25 years. And this year’s $2.83bn remains significantly higher than 2020’s $2.4bn.
Brettle was keen to put the figures in a longer-term context, which has seen the firm’s revenue grow by 57% and net income by 51% since 2015, and to focus on continued investment.
‘Revenue is just one measure. Another is net profitability. And there, there was a substantial decrease. But part of that is because we continued to invest. We had significant headcount growth in 2022, in part because we had been phenomenally busy up to the end of February, and by the time we realised that things were getting a bit tougher, it still felt very close to when we’d been busy to start pulling back.’
London executive partner Dipen Sabharwal KC (pictured) took a similar longer-term view. ‘It’s gratifying that, when we look back on the last five years, we see consistent growth.’
He also took pride in the London office’s performance. ‘We’ve broken through the $450m barrier for the first time. That’s an all-time high. We were building on a boom year in 2021, and the environment really chilled in 2022. So to have grown our revenue at all, even modestly, was an achievement.’
Notably, while 2022 saw a significant drop-off in deal activity, the firm’s London corporate practice held steady. ‘If I were to single out one practice area for standout performance in London’, said Sabharwal, ‘it would be M&A. Despite the fact that deal levels were more muted, our teams in London really were gangbusters busy.’
Both Brettle and Sabharwal stressed that the firm’s strategy remains unchanged. ‘Our bread and butter’, said Sabharwal, ‘is cross-border work. That’s our sweet spot. It’s what we do well.’
Brettle echoed this. ‘Nearly half of our matters during 2022 were cross-border. We advised clients in 115 countries on matters spanning 195 countries.’
‘We are committed to our very strong presence globally. We are not ‘hub and spoke’ – we are a truly global firm. Our practices are truly integrated. We want to continue to do the right work, for the right clients, in a way that plays to our strengths as a global firm.’