Transatlantic firm Hogan Lovells has today (27 February) unveiled its highest post-merger global financial results, posting a fee-income increase of 5.2% while profit per equity partner (PEP) and revenue per lawyer (RPL) increased by 10% and 3.7% respectively.
Fee-income increased to $1.72bn, while PEP rose to $1.21m and RPL was up to $742,613. Across the regions, the Americas represented approximately 46% of total billings, while London and Continental Europe together equalled 47%, and the Asia & Middle East region totalled 7%.
The results are a marked improvement on the 2,527-firm’s 2012 results, in which global fee-income dropped by 2% to $1.633bn from $1.665bn, while PEP also fell by nearly 6% and RPL by 3%.
Fee-income for the 150-partner London office, the largest office in the firm, increased by 4.5% to £265.4m, compared to £254m for 2012, accounting for approximately 24% of the firm’s worldwide revenues.
Drilling down further into London revenue, the corporate practice represents approximately 34% of takings, while disputes and finance stood at 32% and 24% respectively.
The results come after a year has seen Hogan Lovells embark on strategic expansion, with office openings in Luxembourg and Sao Paulo (its second in Brazil), combined with a South African tie-up with local firm Routledge Modise.
Since its 2010 merger the firm has made over 100 lateral hires, of which 23 were in 2013, in areas including corporate, disputes, government & regulatory, finance and IP.
Major mandates led by the firm last year include advising Dell on its $24.4bn deal to go private, and Liberty Global on various aspects of its £15bn acquisition of Virgin Media. The finance practice advised the Shah Deniz Consortium on the landmark US$45 billion Azerbaijan gas project while the IP practice advised HTC in the largest patent dispute in Europe.
Co-chief executive David Harris, who retires from the firm this summer, told Legal Business: ‘It’s a real affirmation of the strength of our global platform and the progress we have been making. We’ve been applying a consistent approach and adhering to our strategy right from the time of the merger – these things take time to work through.
‘We’ve increasingly seen client and panel wins, and increased success in cross-selling relationships with major clients across our practices and offices. When cross-selling a client into a new market, we very often have to displace an existing relationship and that doesn’t happen without a lot of relationship building.’
Harris added: ‘There’s certainly been an improvement in the market too. Performance across the firm has been really encouraging. It’s not a surprise – I was candid enough last year to say I was a bit disappointed we hadn’t seen more of an improvement but it’s now translated into the numbers.’
The results come as Harris and co-chief executive Warren Gorrell (pictured) prepare to hand over to incoming chief executive Stephen Immelt.
As to the issues that will face their successor, the pair note that clients continue to demand increasingly cost-effective fee arrangements and solutions, and the firm has plans in the pipeline to tackle the issue. ‘We are keen to be responsive to clients and proactive in delivering real value in the way we work – increasing project management skills; sharing expertise and training,’ Harris says. ‘In terms of fee arrangements, being flexible and structuring our fees in a way that delivers transparency and real value to clients is important, including where appropriate offshoring or outsourcing work.’
The positive results may be viewed as something of a legacy and Gorrell adds: ‘We’ve both worked really hard to position the firm going forward to be successful. We have an unrivalled platform and worked through the hard integration to embed a team-oriented high performance culture – one that clients increasingly relate to. That’s a pretty good position to be in.’