Legal Business Blogs

LLP latest: Hogan Lovells stands out for lack of debt as accounts show 5.4% increase in profit before tax

Transatlantic LB100 firm Hogan Lovells has become the latest to release its LLP accounts for the 2012/13 financial year, posting a 5.4% profit-before-tax increase from £197m to £208m and an enviable lack of debt in comparison with a number of recent filings among some of its competitors.

Revenue decreased 1.6% from £591m to £581m, which the firm attributed to the weakening of the euro against Sterling during the relevant period.

Operating expenses at the 2,527-lawyer firm decreased by 14% from £145m to £124m, which the firm said reflects higher expenses in 2011/12 due to the one-off costs associated with its surplus office space.

The firm stands out for having no net debt and its net cash position dipped only marginally from £62m to £61m, although its revolving overdraft facility reached £388,000 and it has the option to utilise loan facilities of up to £60m.

Profit for the year for division amongst equity members increased from £163,510 to £174,464, while average profit per equity member increased from £761,000 to £811,000.

The number of fee earners increased from 1,504 to 1,527 while the average number of equity members remained the same at 215.

The firm has embarked on strategic investment in the last year through a combination of lateral hires and a tie-up with South African firm Routledge Modise that went live on 1 December.

A firm spokesperson commented: ‘Our performance during the difficult market environment covered by the reporting period was respectable, with a small increase in profitability and revenue marginally down. This result reflects the benefits of our global practice and breadth of capabilities, along with maintaining a solid grip on expenses.

‘It is important to bear in mind that these accounts are now quite historic, referring to a period which ended nearly nine months ago. In particular, they do not reflect the improvement in market conditions and in Hogan Lovells International LLP’s performance (and more generally globally) since 30 April 2013.’

The firm’s lack of debt is in contrast with a number of recent top LB100 firms’ filings, including Berwin Leighton Paisner, which saw its debt rise from £14m to £45m.

Other LLPs released for the 2012/13 period include Freshfields Bruckhaus Deringer, which, revealing a drop of 5% in average equity partner numbers.

The Magic Circle firm, which saw its 2012/13 profits fall to £312.3m from £329.1m in the previous year, also posted an overall revenue increase of 4% to £1.23bn, saw the average number of members fall from 350 to 332.