Just add cash!
As RollOnFriday has learned, Withers has made a cash call to all of its junior partners.
The company confirmed that junior equity partners were asked to contribute between $25,000 and $52,500 (£19.9,000 to £41.7,000) depending on seniority.
Cash calls can help partnerships strengthen their balance sheets, which has become a more pressing matter for some companies as they grapple with market pressures exacerbated by the impact of the pandemic, Russia’s invasion of Ukraine and – for UK-based companies – Brexit.
Withers expanded significantly in the US last year, taking a bullish stance on the future of office versus remote work with moves to much larger offices in LA, San Francisco and San Diego.
However, the company told RollOnFriday that its decision to apply for a capital contribution was made two years ago. Rather than an emergency funding measure, it appeared to be a desire to help junior partners leverage the financial bond between attorney and firm that motivated the call.
In a statement, it said, “For the first time, we have asked junior equity partners to make a capital contribution of between $25,000 and $52,500, based on seniority, to help them become more involved in ownership of the company.” The call is not directed to senior equity partners, whose capital needs remain unchanged, the company said.
One of the city’s oldest private client practices, Withers became Withersworldwide in the last decade, surprising everyone with a US merger and an international rollout in some pretty flashy locations (Milan, Tokyo, New York, right next to Domino’s in Cambridge).
It certainly didn’t give the impression that a company was struggling to make money. Withers reported global revenue of £267m in 2022, up from £243.7m a year earlier, while profit per equity partner held steady at £668k after a 32% increase in 2021.
Last summer the company was doing so well that it even gave all trainees, secretaries, paralegals in the EU and Asia and below-level corporate services staff a £1,000 extra living allowance.
Speaking of the rising sales of the US offices in 2022, Michael Brophy, managing director of Withers in Los Angeles, said: “Every year around the world we get the idea that the London market is the most important market for the company.” However, he will take their money.
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