Legal Business

Hogan Lovells hails ‘record’ financial results as revenues and profits soar

Hogan Lovells hails ‘record’ financial results as revenues and profits soar

In what it calls the ‘most successful year in the firm’s history’, Hogan Lovells has added $300m to its top line as revenue increased 13% from $2.3bn to $2.6bn.

It posted an even more striking profit result, with PEP shooting upwards 26% from $2m to $2.5m. Revenue per lawyer also saw a healthy 17% increase from $884,000 to just over $1m.

The 13% revenue hike far outstrips last year’s 3% increase in global fee income. Remarkably, the 26% jump in PEP is lower than last year’s startling 31% rate, although this was caveated by the introduction of a compensation floor for some partners in response to the pandemic.

Chief executive Miguel Zaldivar (pictured) hailed a stringent ‘financial discipline’ driving profitability: ‘There was no significant change to the partnership structure in the last year – we got invoices out early and converted WIP into revenues.’

Embodying the firm’s transatlantic focus, 47% of Hogan Lovells’ business originated from the Americas, with an equal 47% being generated from its EMEA business. The remaining 6% was derived from Asia. The UK specifically made up $534m of the firm’s overall revenue, representing 21% of the business.

Zaldivar said the results were a reflection of his ‘balance, balance, balance’ mantra: ‘We’ve had record years in every market. The economy in the US is booming, and we saw record performances in London, Germany and France. In our business, that geographical balance used to be a hedge, but it has now become a driver of success.’

In terms of practice groups, Hogan Lovells’ corporate and finance group represented 42% of turnover, with global regulatory and intellectual property, media and technology at 30%, and litigation, arbitration and employment at 28%.

Headline mandates for the period included the firm’s US practice, led by Silicon Valley M&A partner Keith Flaum, advising Oracle Corporation on its $28.3bn acquisition of Cerner Corporation. And in a notable disputes matter, Hogan Lovells is representing ENRC in its high-profile claims against the UK Serious Fraud Office following the conclusion of a long-running fraud and bribery probe.

Deputy chief executive Michael Davison told Legal Business: ‘Usually when there’s an M&A boom, there’s a slowdown in contentious work, but we’ve had both. It’s been a record year for our litigators.’

Hogan Lovells also announced this week plans to relocate to a new London headquarters in 2026, swapping Atlantic House for soon-to-be built premises at Holborn Viaduct. The firm will occupy all 12 floors of the building, which will comprise 266,000 square feet.

For an in-depth look at Hogan Lovells’ track record since its 2010 transatlantic merger, see ‘Winning Hartson minds’.

Legal Business

Global 100: Hogan Lovells – Winning Hartson minds

Global 100: Hogan Lovells – Winning Hartson minds

The champagne corks had long-since popped when the great and the good of legacy British firm Lovells and Washington DC powerhouse Hogan & Hartson met at a practice area retreat in Barcelona in 2013. While there was cause for cheer at the bedding in of their union, there was also business to attend to.

Adrian Walker, now a global board member and head of Hogan Lovells’ ESG practice, was then a couple of years into his role as global co-head of infrastructure, energy, resources and projects, a role he shared with Hogan Lovells’ current chief executive, Miguel Zaldivar. He recalls the odd mix of levity and gravity: ‘I interviewed a load of people at the firm for a video we did at the retreat for a bit of fun. I spoke to Miguel about values, and how the world will look in 50 years. He mentioned green energy and autonomous cars but noted that core values will always remain the same. We learn them from our predecessors and pass them on to the next generation.

Legal Business

Baptism of fire: New Hogan Lovells chiefs unveil record results as PEP nudges $2m

Baptism of fire: New Hogan Lovells chiefs unveil record results as PEP nudges $2m

Taking the helm of a global law firm is no small feat at the best of times, much less so amid a global pandemic. However Hogan Lovells’ chief executive Miguel Zaldivar and his deputy Michael Davison, who assumed their roles last summer, had cause for cheer as the pair revealed a solid set of financial results, including a 31% surge in profit per equity partner (PEP) to $1.97m from $1.5m in 2019.

Global revenue grew a more sedate 3% to $2.3bn in 2020 compared with $2.25bn the previous year and revenue per lawyer (RPL) rose 4% to $884,000 from $850,000.  Geographical performance has been broadly in line with last year’s output, with the Americas accounting for roughly 49% of total billings, EMEA 45% and Asia-Pacific 6%.
Practice-wise, corporate and finance brought in 41% of total billings; global regulatory and intellectual property, media and technology (IPMT) generated 31%; and litigation, arbitration and employment 28%.

Speaking to Legal Business, Zaldivar (pictured) noted: ‘The highlight of the year for me has been the new management team transitioning in the middle of the pandemic. We have hit the ground running and the firm has had its highest revenue and profit in history. The credit for that goes to the partnership.’

Explaining the substantial PEP increase, he said: ‘We are not an outlier in achieving double-digit PEP growth, many other firms have done this too. The main contributor was not a drop in equity partners. In 2020 we introduced a floor on compensation for some partners to act as protection to them without a financial risk to the firm. We decided that would be prudent, given the fluctuation in the market, and that has had the effect of increasing PEP.’

He praised Davison and teams around the world for their impressive financial discipline. ‘Our lawyers are doing timesheets daily and sending bills out every month. Clients have paid and cashflows have been positive and healthy. Michael has been the enforcer of the rules!’

But it has not all been plain sailing, as Davison admits. ‘We will look back on this as a uniquely challenging situation. We continued to operate but in a very different way and supported each other through, but it has not been easy.’ He pointed to a voluntary redundancy scheme that saw business services staff cut in the US and UK as a cost-saving measure.

The pair provided a long list of standout matters for the year, including in corporate and finance, advising Marvell Technology on its $9bn acquisition of Inphi and acting for Arm, the UK-headquartered multinational semiconductor and software design company of SoftBank , in its $40bn acquisition by NVIDIA.

The firm acted for ENRC on high-profile claims against the Serious Fraud Office and its former legal advisers and secured a major win for Uber on regaining its London licence and right to continue operating in London.
Looking ahead, Zaldivar insists the firm will continue to invest in the engines of London, Washington DC and Germany, as well as in the Paris office.

It is clear that, under new leadership, The US and Asia businesses will remain at the forefront of the firm’s ambitions. Concluded Zaldivar: ‘In the US we are challenging the partnership to be more successful in New York, California and Texas. We have to grow in the US. We plan to grow organically in Shanghai, Beijing and Hong Kong, adding more corporate lawyers. We want to be stronger in China. That is the future of Hogan Lovells.’

Legal Business

Latham and Hogan Lovells move to remote working globally amid alarming coronavirus spread

Latham and Hogan Lovells move to remote working globally amid alarming coronavirus spread

Latham & Watkins and Hogan Lovells have become the latest law firms to ramp up their response to the increasingly global spread of COVID-19 by sending all their staff home.

The news comes as the number of casualties continues to rise around the world, with the latest figures reporting over 200,000 confirmed cases while the death toll has passed 8,000. 

Latham confirmed today (18 March) that its staff is working remotely across all the 2,270-lawyer firm’s 30 global offices.

Chief operating officer LeeAnn Black said in a statement: ‘Except where a jurisdiction has moved to a lockdown, our offices around the world remain physically open although the vast majority of our lawyers and professional staff are working remotely.’

Hogan Lovells also confirmed that the firm has moved to remote working globally.

The 2,642-lawyer transatlantic firm extended yesterday the measure to its UK, American and Australian offices, while its continental European outposts had already been working remotely since earlier in the month.

A spokesperson for the firm said in a statement: ‘We tested our remote working capabilities in the US last week and the UK and Europe this week, and had successful results.’ They added that the firm was ‘confident that we have the tools in place to conduct our business as usual’.

A number of firms have moved to similar arrangements over the last few days, including City firms Linklaters, Clifford Chance, Slaughter and May and Allen & Overy as well as transatlantic firm Eversheds Sutherland.

Legal Business

Pretty, pretty, pretty good: outgoing Hogan Lovells chief lauds best-ever financials as PEP surpasses $1.5m

Pretty, pretty, pretty good: outgoing Hogan Lovells chief lauds best-ever financials as PEP surpasses $1.5m

Hogan Lovells has posted its strongest financial performance since its transatlantic union a decade ago, with turnover rising 6% and solid year-on-year growth in all key metrics.

Revenue in 2019 came in at $2.246bn, profits per equity partner (PEP) was up 9% to just over $1.5m despite the firm growing its equity ranks by 13 to 536, while revenue per lawyer (RPL) rose 6% to $850,000 as total headcount grew marginally to 2,642.

The results announced today (21 February) make for a nice farewell gift for chief executive Steve Immelt (pictured) and his deputy David Hudd as the duo prepare to step down at the end of June after six years.

Speaking to Legal Business, Immelt described the performance as ‘The result of what we have been working on since we came on in 2014: get our business running better, focus on profits, go to market with a view to be working on our clients’ most complex matters.’

Turnover at the firm’s 500-lawyer London office also made a big jump in 2019, growing 10% to £332.6m compared to a much slower 3% rise the previous year and accounting for a fifth of Hogan Lovells’ total billings.

‘The performance comes from consistency across the piece – strong corporate transactions, busy period for our litigation practices – and strong discipline in getting our bills out and collecting,’ said UK and Africa managing partner Susan Bright, pointing to strong performances in financial services, TMT and life sciences.

Under Immelt and Hudd’s watch, Hogan Lovells has hiked global revenue 26% and PEP 24%, a notable improvement on the firm’s previous run, when turnover and partner profits rose by just 7% and 9% between the 2010 merger and 2014.

While performance remained sluggish in 2014 and 2015, turnover has increased its pace of growth since 2016. But it wasn’t until 2019 that partner profits caught up, although the 8% rise in PEP to $1.38m in 2018 was largely due to a 6% drop in the number of equity partners.

‘There was not one thing in 2019 that suddenly moved the needle, there was a lot of good business across the entire platform,’ Immelt said. ‘I feel pretty good about 2019 as an indicator of what our direction is now and what we can do moving forward.’

He spoke of a challenging start to 2019 on the corporate side, with ‘a lot of stop and starting as everybody was trying to figure out when a recession was going to hit or expansion was going to stop’. But the second half was much better as the year ‘ended with a sense that the sail may be continuing for a while’.

Among the mandates handled by the corporate practice, which accounted for 29% of the firm’s billings in 2019 compared to 31% the previous year, Immelt noted the $4bn merger between Industrial Property Trust and Prologis: ‘It reflects a cross-border collaboration where the relationship began in the US and ended up with a very significant mandate executed in Europe.’

The firm’s flagship contentious practices matched corporate this year at 29% of billings, with cases including a Court of Appeal victory for PrivatBank in a $1.9bn fraud case against its former shareholders. Immelt also pointed to the firm’s work for Equifax, handling ‘one of the largest data breaches in US history’: ‘We were brought in for both the regulatory aspects and the following litigation.’

The regulatory practice increased its weight within the firm, accounting for 19% of turnover compared to 16% in 2018, while finance brought in 13% and IP, media and technology the remaining 10%.

The firm continued to bill around half of its revenue out of America, with Europe contributing 43% and Asia 7%.

Hogan Lovells’ strong financial results come despite a three-partner private equity team moving to Paul Hastings, including City practice head Ed Harris and despite its South African merger partner splitting from the firm]. The firm responded with 40 lateral hires in 2019, and Bright said it was now looking to rebuild its London PE practice and grow its UK corporate ranks.

As they prepare to hand over to US-based Miguel Zaldivar and London’s Michael Davison respectively, Immelt and Hudd described a more integrated firm better known for cross-border activity than in 2014. ‘There is a very strong platform, both Miguel and Michael have been part of that story and will take the firm to the next level,’ Hudd said.

Immelt admitted that the firm still needs to build a stronger practice in New York, where it only fields 150 lawyers, and revealed Zaldivar was relocating to Manhattan to lead the efforts. California was also a priority, he added, and the firm needs to ‘figure out what’s going to happen in Asia’: ‘China is going to have a leading role in the world, and law firms need to have a strong China practice – and that’s not just Hong Kong.’

For more on the challenges ahead for Hogan Lovells’ new chief, see ‘Miguel who?

Legal Business

Revolving doors: City laterals bounce back with Milbank, Weightmans and Lewis Silkin

Revolving doors: City laterals bounce back with Milbank, Weightmans and Lewis Silkin

City lateral recruitment regained momentum following a slow Christmas holiday break, with Milbank, Weightmans, and Lewis Silkin all making hires in London.

Milbank hired M&A partner Lisa O’Neill from McDermott Will & Emery in London. O’Neill has experience in corporate and energy transactions with clients including FTSE 250 companies, international and independent oil & gas companies, financial institutions, global investment firms and private equity funds.

Global head of corporate group Norbert Rieger commented: ‘The addition of Lisa underscores our commitment to growing our global M&A practice at the highest levels in the market. She is well respected and knowledgeable in a range of industries, and her depth of experience advising corporates on sophisticated M&A transactions will be invaluable to our clients.’

Also in the City, Weightmans doubled up with the hires of healthcare partner Kiran Sekhon and criminal regulatory partner Lili Oliver.

Sekhon joins the firm as a healthcare partner from Capsticks and has over 17 years’ experience in medical defence litigation. Oliver, meanwhile, joins from Clyde & Co where she was head of corporate risk in the safety, health and environmental department.

Partner and head of Weightmans’ London office Tim Lang told Legal Business: ‘Lili and Kiran are true leaders in their fields and great additions to our fast-growing London offering. [We have] almost 20 new partners across the firm this year alone, and we are looking forward to continuing this momentum into next year.’

Elsewhere, Lewis Silkin hired planning partner Sara Hanrahan to its real estate practice group as head of the planning team from Blake Morgan, where she was also head of planning.

Hanrahan has experience in advising clients in the public and private sector on contentious and non-contentious planning matters and has advised private developers, infrastructure and utilities firms, retails and leisure operators and high net worth investors.

Managing partner Giles Crown told Legal Business: ‘We were looking to deepen our offering and fill in gaps in certain key areas and one aspect of that was a fairly long standing search to replace planning expertise. There are a number of aspects of what we were looking for that Sara very ably fulfills.’

The team focuses on four core areas, corporate occupiers, retail including luxury and leisure, development work and investor work including family and high net worth individuals.

Hanrahan told Legal Business: ‘I do have experience in the four areas of real estate that the firm is looking to develop. I think therefore the synergy with the experience I have and the vision that the firm has for the next few years goes together very well.’

In Birmingham, Hogan Lovells office head Michael Gallimore left the firm to join boutique planning law firm Town Legal as partner.

Gallimore joined Hogan Lovells as partner in 1988 and was head of planning between 1998 and 2016 before becoming head of the firm’s Birmingham office in 2017.

Gallimore told Legal Business: ‘I had come to the end of my period heading up the office in Birmingham, so it was a natural point for me to consider what I wanted to do going forward and the opportunity arose to join Town Legal. I was very keen to get back into client facing work and I knew a number of partners from Town Legal.

‘The big advantage of the firm is that it’s absolutely focused on planning work and therefore the level of investment that they’re able to make, the strong commitment and the depth of experience that they’ve got in the planning field was a real attraction. They’re not diverted by other practice areas.’

In December, Hogan Lovells also lost its planning team head Claire Dutch to Ashurst.

Finally, Dentons added partner Robert Weber from White & Case to its corporate practice in Germany.

Weber has more than 20 years’ experience in stock corporation law and related capital markets law. Managing partner of the German office Andreas Ziegenhagen said: ‘The fact that we are investing both in classic fields of advice such as stock corporation law, and in future-oriented, technology-supported legal advice reflects the dynamic development of our German practice.’

Legal Business

Hogan Lovells ramps up London partner promotions in 29-strong round

Hogan Lovells ramps up London partner promotions in 29-strong round

Hogan Lovells has increased partnership promotions in the City for the fourth successive year, minting eight in London amid a slightly scaled back round.

The firm announced today (6 January) it has promoted 29 of its lawyer to the partnership in the last round overseen by chief executive Steve Immelt (pictured), who will hand over to Miguel Zaldivar in June following a confirmatory vote by partnership in late December last year. The firm made 30 promotions last year.

London was the office with the highest number of partners promoted globally this year, ahead of Washington DC’s seven. New York only saw one promotion, while no lawyers were promoted in the firm’s West Coast offices.

Overall, Hogan Lovells promoted the same number of partners in Europe and the Americas, 14, with six lawyers promoted in continental Europe. One lawyer was promoted in its Tokyo office.

Speaking to Legal Business, UK and Africa head Susan Bright said she was ‘particularly pleased’ with the gender split of the London intake, which saw four women and four men promoted.

Women accounted for 44% of the cohort globally, meaning they now make up 26% of the firm’s 822 partners. The firm looks unlikely to reach its target of 30% female representation at partner level by 2022, however.

Bright pointed to a higher female representation in London, where women make up 29% of the partnership, and said the firm was still ‘absolutely confident’ it would reach its global 30% target over the next two years: ‘It’s the top priority for us, we are absolutely on it. Internal promotions are only one aspect of the overall constitution of our partnership: the other two are laterals coming in, and retirement and departures. It’s all those things that contribute to it.’

Hogan Lovells’ flagship regulatory practice took the lion share of promotions globally, with nine lawyers promoted including James Black and Jane Summerfield in London. Corporate was second, with eight minted including tax lawyer Fiona Bantock, real estate specialist Hannah Quarterman and transactional lawyer Jonathan Russell in the City.

The seven lawyers promoted in the firm’s litigation practice, headed by deputy chief executive-elect Michael Davison, included London-based Jennifer Dickey and Liam Naidoo. UK resident James Maltby was one of two finance lawyers promoted, with three others minted in the firm’s IP, media and tech group.

Hogan Lovells’ partner promotions in full:

• Andrea Atteritano, LAE (Litigation), Rome

• Fiona Bantock, Corporate (Tax), London

• James Black, Global Regulatory (Financial Services Regulatory), London

• Carrie A. DeLone, LAE (Litigation), Washington D.C.

• Jennifer Dickey, LAE (Litigation), London

• Ana Maria Gutiérrez, Global Regulatory (Environment and Natural Resources), Denver

• Margaux J. Hall, Global Regulatory (Health Care), Washington, D.C.

• Sabrina Handke, Corporate (Real Estate), Munich

• George W. Ingham, LAE (Employment), Northern Virginia

• Alexander Koch, Corporate (Transactional), Luxembourg

• Lina R. Kontos, Global Regulatory (Medical Devices and Technology), Washington, D.C.

• Tony Lin, Global Regulatory (Communications, Internet and Media), Washington, D.C.

• James Maltby, Finance (Business Restructuring and Insolvency), London

• Liam Naidoo, LAE (Investigations, White Collar and Fraud), London

• Aaron Oakley, Intellectual Property, Media, and Technology, Denver

• George O’Brien, Global Regulatory (Pharmaceuticals and Biotechnology), Washington, D.C.

• Luis Ernesto Peón Barriga, LAE (International Arbitration), Mexico City

• Hannah Quarterman, Corporate (Real Estate – Planning), London

• Alexander Stefan Rieger, Finance (Infrastructure, Energy, Resources and Projects), Frankfurt

• Christian Ritz, Global Regulatory (Antitrust, Competition and Economic Regulation), Munich

• Jonathan Russell, Corporate (Transactional), London

• Ignacio Sánchez, LAE (Investigations, White Collar and Fraud), Madrid

• Abigail C. Smith, Corporate (Transactional), Washington, D.C.

• Jane Summerfield, Global Regulatory (Pharmaceuticals and Biotechnology), London

• Tomoe Takahashi, Intellectual Property, Media, and Technology, Tokyo

• Adriana V. Tibbitts, Corporate (Transactional), Baltimore

• Jared R. Wessel – Global Regulatory (International Trade and Investment), Washington D.C.

• Gabrielle (Gabi) M. Witt, Corporate (Transactional), Northern Virginia

• Ernest Yakob, Intellectual Property, Media, and Technology, New York

Legal Business

Some joy for UK partnership as Hogan Lovells board backs City-based litigation chief as deputy CEO

Some joy for UK partnership as Hogan Lovells board backs City-based litigation chief as deputy CEO

While missing out on the firm’s top management role, Hogan Lovells’ London office is all but certain to see one of its most prominent partners appointed as deputy leader for the second time in a row.

Two weeks after the board recommended him as the firm’s next chief executive, Asia Pacific head Miguel Zaldivar nominated today (12 December) litigation head Michael Davison (pictured)  as his proposed deputy from July 2020. Both nominations are subject to a confirmatory vote by the partnership later this month.

With Zaldivar relocating to the firm’s Washington DC headquarters, today’s announcement means Hogan Lovells will once again have a US-based chief executive and a UK-based deputy, with the duo  replacing US litigator Steve Immelt and the City’s former finance head David Hudd.

Like Hudd six years ago, Davison had earlier this year put his name forward to become chief executive and was regarded as the strongest among the three London-based candidates due to his global role and profile. The other two City names in the list, UK and Africa head Susan Bright and corporate veteran Peter Watts, were by comparison little known outside the UK.

While candidates are technically not allowed to campaign, it falls to the 12 members of the firm’s board to recommend a name for approval by the partnership following soundings.

A member of the firm’s management committee since 2013, Davison joined the firm in 1986 and is one of its most influential London partners, leading what is arguably one of the most successful practices of the firm globally.

Hogan Lovells’ chair Leopold von Gerlach said the board had been ‘unanimous in supporting Miguel’s choice and is very pleased that Michael has agreed to bring his leadership experience and capabilities to the role of deputy chief executive’.

With Zaldivar having little connection to much of the UK partnership, Davison’s appointment will be welcome as a sign of support for the London office, the biggest of the firm, which since the 2010 transatlantic union of Hogan & Hartson and Lovells has never seen one of its partners take up the sole leadership role.

Legal Business

Comment: Miguel who? New Hogan Lovells chief is going to be a hard sell in Europe

Comment: Miguel who? New Hogan Lovells chief is going to be a hard sell in Europe

Canvassing ex-partners a few days after Hogan Lovells’ board recommended Miguel Zaldivar (pictured) as the firm’s next chief executive, Legal Business was in the awkward position of having to spell his surname. Even several current City partners admitted to having never met him.

Yet the Hong Kong-based, Venezuelan energy and infrastructure specialist who spent most of his career in the firm’s Miami arm is all but certain to succeed Steve Immelt at the helm of the firm next July, following a rubber-stamping vote by the partnership later this month.

Relocating to DC and starting his four-year term at the tenth anniversary of the transatlantic union of Hogan & Hartson and Lovells, it is striking that the UK partnership has for the second time in a row missed out on the top role, despite having the firm’s biggest office. Initially Warren Gorrell and Lovells’ David Harris shared the role, but a European lawyer has never taken the sole leadership brief. As the European/Asian side of the business is the same rough size as the US half – and arguably sits higher in the local legal pecking order – it is a grating choice for a self-proclaimed ‘merger-of-equals’ union.

But then the path leading to the firm’s top executive role is somewhat winding, with candidates technically not allowed to campaign, or put forward manifestos. As such it falls to the 12 board members – themselves elected by the partnership – to recommend a name after ‘soundings’. While the model has the benefit of avoiding fractious elections, it also comes with the very sizeable drawback of making it hard for clear strategies to emerge. Great for status quo and continuity but competing at this level of the legal market sometimes requires more than continuity. And, frankly, Hogan Lovells has had ten years of continuity with mixed results at best.

Likewise, three of the six ‘putting their names forward’ were London-based, which ultimately weakened the position of each of them. What mattered more, however, is that UK and Africa managing partner Susan Bright and corporate veteran Peter Watts were little known outside the UK, with litigation chief Michael Davison probably the only real contender thanks to his global role and profile.

With Madrid-based IP partner Burkhart Goebel’s position complicated by the firm’s chair, Leopold von Gerlach, also residing on the continent, the two strongest names in the fold were American. Arguably.

Leading one of the 2,922-lawyer firm’s most successful practices globally, DC-based regulatory head Alice Valder Curran was seen by some as the more obvious frontrunner. That the choice ultimately fell on the less known Zaldivar is notable. Appointed to lead the Asia Pacific and Middle East region last year, he oversees one of Hogan Lovells’ less profitable businesses, accounting for just 7% of the firm’s revenue, despite being credited with bringing China and Japan to the edge of profitability. Neither is Hogan Lovells regarded as having huge momentum in the region.

The concern is less that the snubbing of the legacy Lovells partners will cause immediate resentment than foster the sense of disconnection between the US and European businesses that has never been properly bridged a decade after the merger. Many London partners feel the US business has little to do with them, sentiments held not with rancour, just accepted as facts of professional life.

What will be more welcome by some is the appointment of a finance lawyer as a sign that the firm is still serious about investing in its transactional ranks, a supposed priority post-merger that never quite lived up to expectations. But with such a cautious investment push, the question is if the window of opportunity in building up Hogan Lovells’ deal teams in London and New York has closed. It is certainly a lot narrower at the decade’s conclusion than at its start.

The London M&A practice has been similarly underweight for years, even if Hogan Lovells remains a dependable broad-service finance team in the City. In the US its strength has traditionally been in real estate investment trusts, hardly a mainstream transactional operation. That’s not to say that no progress has been made, with global billings from M&A and PE rising 33% to $487m between 2014 and 2018 under Immelt’s watch, a respectable showing. The London office also fields a group of well-regarded young and mid-vintage partners including Ben Higson, John Connell, Dan Simons and Richard Diffenthal. The 2017 hire of a five-partner Silicon Valley team from Weil Gotshal & Manges is arguably the one unquestioned home run, with the profitable team said to have presided over $40m in billings in 2018.

The party line is that thanks to Immelt’s efforts the firm now has a well-integrated transatlantic platform on which to build the first-ever truly global mainstream M&A practice. But frankly a lot more needs to be done, most jarringly in New York where Hogan Lovells still fields only around 200 lawyers, an anorexic line-up for a firm of its ambition and heritage. The five-year 23% overall revenue growth to $2.12bn in 2018 is also pedestrian, although the pace picked up somewhat under Immelt.

It’s not as much about willingness to spend on high performers – some of its top US rainmakers are already on around $10m. But a firm that has traditionally taken pride in being a nice place to work and nurturing home-grown talent needs more readiness to target laterals and address underperformance. There has rarely been a sense of the sustained momentum in its investment that was always going to be required to make ground in its target markets.

Zaldivar will have a massive job to do in a limited space of time; as a string of recent City departures show, patience is running out. Giving some love to London when it comes to appointing Zaldivar’s deputy and key practice heads wouldn’t be a bad place to start.

Legal Business

Legacy Lovells misses out again as board recommends yet another legacy Hogan & Hartson CEO

Legacy Lovells misses out again as board recommends yet another legacy Hogan & Hartson CEO

The Hogan Lovells board has once again chosen a legacy Hogan & Hartson partner to be its next chief executive. Miguel Zaldivar is currently the regional chief executive for Asia Pacific-Middle East, based in Hong Kong, and will replace the current CEO, Steve Immelt, on a four-year term from 1 July 2020.

Although Zaldivar’s recommendation is subject to a constitutional formality vote, according to one former partner, no-one is anticipating that the partnership will vote the board’s decision down.

Based in Florida between 2002 and 2018, Zaldivar developed the Latin American practice and has experience in internal project development and finance through his role as co-leader of the firm’s infrastructure, energy, resources and projects practice.

With the CEO wielding the most executive power at the firm, Zaldivar will be the third legacy Hogan & Hartson partner to occupy the top role since the merger of the UK and US firms in 2010, and the second to be appointed sole CEO. Immelt took up the role of the firm’s first sole chief executive from joint heads Warren Gorrell and legacy Lovells’ David Harris in 2014, with legacy Lovells partner David Hudd as his deputy (pictured together, above). Both Immelt and Hudd’s terms were extended to the end of June next year by the board in 2017 and the firm has not yet made an announcement on who will replace Hudd as deputy CEO, saying the role ‘is subject to separate consideration’.

While the chair of the board, currently held by Leopold von Gerlach, has been occupied by legacy Lovells partners since 2012, Zaldivar’s elevation reflects the fact that the US business dominates key appointments, including head of corporate David Gibbons and head of the global regulatory practice group, Alice Valder Curran. Appointing another CEO from the US side will do little to dispel the idea that the UK side of the business is playing second fiddle. Although Zaldivar has wide support in the US and Asia, according to one ex-partner, he is not as well known in Europe.

The firm’s London presence certainly requires some focus following a number of senior departures. Last month, the firm lost global private equity head Tom Whelan to McDermott Will & Emery and disputes partner Julianne Hughes-Jennett moved to Quinn Emanuel Urquhart & Sullivan after 20 years at the firm.

According to the firm, Zaldivar will focus on client service, investment in key markets and managing the firm’s profitability. While the firm has largely been viewed as being run competently and in an understated manner under Immelt, performance has been solid rather than spectacular. Zaldivar may well be charged with injecting more impetus and ambition into the Hogan Lovells project, including establishing greater strength in corporate on both sides of the Atlantic.

The firm’s current business model has been described as being ‘all things to all people in all places’ and the key question is whether Hogan Lovells will continue with this steady model or focus on becoming more profitable in critical jurisdictions.

For more on Hogan Lovells, read ‘A meeting of minds – Hogan Lovells’