Legal Business Blogs

Latest accounts do not reflect performance, says White & Case as filings show City revenue edging down

White & Case‘s most recent limited liability partnership (LLP) accounts filed at Companies House show turnover in its UK and Africa offices dropped 2% in the financial year ending December 2013.

The LLP that is described as providing legal services for UK, Europe and Africa saw turnover decline from £139.9m in 2012 to just under £137m in 2013, while operating profit dropped by 7% to £52.5m in 2013 from £56.4m in 2012.

A further breakdown in the filings revealed turnover of the London office was down by 1.8% from £138.6m in 2012 to £136.1m in 2013, while accounted activities in Africa were down 35% from £1.3m in 2012 to just under £842,000 across the same period.

The firm said in the filings that the drop came from ‘challenging economic conditions’ and that it is ‘continuing to seek opportunities for sustainability growth across practice groups in addition to improving operational efficiency’.

Staff costs fell by 4% from £51m to just under £49m, with wages and salaries decreasing 11% on the previous year. These drops came following a drop in staff members, excluding partners – in 2013 the partnership employed 245 fee-earners on average per month, compared to 262 in 2012, though some of this reduction is due to changes in accounting treatment of staffing costs for fee-earners.

Nevertheless, the firm did enjoy a 68% rise in cash in hand on its consolidated balance sheet from £4.1m in 2012 to £6.9m in 2013 over the financial year ending December 2013. Net current assets were also up by 19% from £31.9m to £37.9m, while total assets less current liabilities grew 15% to £40.6m from £34.8m across the previous year.

White & Case argues, with some justification, that there is a limit to what can be gleaned from its UK accounts given the sprawling nature of its international network and as the LLP accounts do not capture all its UK revenues given the multiple legal entities it uses in the UK. The firm, which structures its business through its parent New York LLP, also somewhat unusually does not run a London P&L account, instead favouring practice area accounting.

The firm told Legal Business that while the LLP filings show figures from the UK and Africa offices, it doesn’t account for the level of work done outside of the UK for the UK office. A firm spokesperson commented: ‘White & Case is a global partnership which operates through a number of entities around the world. The firm’s financial performance in 2013 was strong and the London office was a strong contributor, as in previous years. Our UK White & Case LLP accounts do not reflect the overall performance of the London office or any other office of the firm. Any attempt to draw conclusions about financial performance of the London office, or indeed the firm as a whole, from these accounts alone would be misguided. As stated in February 2014 when the firm’s global results were published, the performance of London tracked the performance of the firm as a whole.’

However, most neutral observers would conclude that the top 20 global firm is stretching the point a little to assert that accounts for the vast bulk of its revenues in one of the world’s three key finance hubs say nothing about its business. Despite having forged one of the largest City practices owned by a US parent, White & Case’s UK office has slimmed since its credit boom peak, falling from a 365 lawyers in 2008 to 310 at the end of last year.

Earlier this year, Legal Business reported that White & Case achieved a steady 4.1% increase in global revenues to $1.44bn in 2013 from $1.38bn in the previous year, while profits per equity partner (PEP) rose 10% to $1.87m from $1.7m.