Hogan Lovells (Photo: Diego M. Radzinschi/ NLJ)
Last year marked Hogan Lovells’ strongest financial showing since the firm’s inception in 2010, according to our reporting.
Gross revenue, net income and profits per partner all increased, a product of the firm’s involvement in a series of high-profile, high-dollar deals in the United States and abroad, and solid performances in other practice areas.
The firm’s gross revenue rose by 5.2 percent, from approximately $1.6 billion in 2012 to $1.7 billion last year. Net income increased by 11.5 percent, from $563 million to $628 million. Profits per partner grew by 10.5 percent, from $1.095 million in 2012 to $1.2 million last year. The data are part of The National Law Journal‘s reporting of 2013 financial results of The Am Law 100, a list of the country’s highest-grossing firms.
“We’re very happy to have had our best year ever,” said Hogan co-Chief Executive Officer J. Warren Gorrell Jr. “It’s good to see all the things we’ve been working on and how we positioned ourselves manifested in strong financial performance, and we would expect the trajectory we’re on to continue.”
Corporate work comprised approximately 31 percent of the firm’s total billings last year. Firm attorneys counseled Dell Inc. on its $24.4 billion deal to go private and advised the underwriters of the $1 billion initial public offering of Empire State Realty Trust Inc., which was the second largest by a U.S. real estate investment trust. Hogan worked with Apple Inc. on its $17 billion bond sale, which at the time was reported as the largest nonbank bond offering.
Government investigations and white-collar defense work was “very strong globally,” Gorrell said, and the regulatory practice had a good year despite gridlock on Capitol Hill.
On the appellate side, Gorrell touted the work of one of the firm’s more recent star hires, former Acting Solicitor General Neal Katyal, who Gorrell said argued four cases before the U.S. Supreme Court last year. He also pointed to the firm’s strong performance in appellate courts across the country.
Hogan continued to expand its global reach, adding offices last year in Johannesburg—through a merger with South African firm Routledge Modise—and in Luxembourg and Rio de Janeiro. It opened a second Brazil office, in São Paulo, in January. Those new locations didn’t affect the firm’s financial performance last year, Gorrell said, but were “part of our continuing strategy.”
More than half of the firm’s billings came from international work. Major matters handled by Hogan attorneys including advising Liberty Global on its £15 billion acquisition of Virgin Media Inc. and advising the Shah Deniz Consortium on a $45 billion gas project in Azerbaijan.
Other firm clients include General Electric, Lloyd’s, Barclays and 21st Century Fox.
“It’s been an encouraging performance across the board,” said co-CEO David Harris, who is based in London.
Given the firm’s international presence, Gorrell said the firm was focusing on “cross-selling”—providing services to clients across different practice areas.
The firm’s headcount went up slightly, from 2,280 lawyers in 2012 to 2,313 lawyers in 2013. Harris said the firm has made strategic lateral hires in recent years, bolstering the firm’s finance practice in New York and corporate practice in London, and making targeted hires in energy, intellectual property and other areas.
Hogan’s nonequity partner ranks shrank by 4.8 percent, from 291 to 277. Gorrell said the decrease was due to nonequity partners being promoted to equity partners and natural attrition. The number of equity partners increased from 513 to 520.
Firm partners earned more, on average, in 2013. The average compensation for all partners went up by 9.8 percent, from $865,000 to $950,000.
There are no immediate plans to open new offices or make other major changes within the firm in 2014, although Gorrell and Harris will step down as co-CEOs when their four-year terms end on June 30 (Harris is also retiring.) The two took the lead after their respective former firms, Hogan & Hartson and Lovells, merged in 2010.
Stephen Immelt, the global co-head of the firm’s litigation and arbitration practice, will take over as CEO, supported by London-based finance partner David Hudd as deputy CEO. Hudd currently leads the firm’s finance practice.
This report is part of The National Law Journal‘s coverage of 2013 financial results of The Am Law 100. Final rankings and full results for The Am Law 100 will be published in the spring in The American Lawyer and on AmericanLawyer.com.