Hogan Lovells offices at 555 13th Street, NW in Washington, D.C. October 25, 2016. (Photo: Diego M. Radzinschi/ALM)
The U.S.-and-U.K.-centric firm reported to The American Lawyer a global gross revenue figure of $1.925 billion last year, which was almost 6 percent more than the previous year. Revenue per lawyer also grew about 2 percent, to $738,000.
The firm added the equivalent of 93 full-time lawyers last year, for a total of 2,609. About one-fifth of those are equity partners.
Profits per equity partner stayed about flat from the year before, at $1.253 million.
Stephen Immelt, the firmwide CEO, noted a growth in total billable hours across the firm that kept apace with the revenue increase.
“We increased head count because we thought the work was there, and the work was there,” he said this week from Washington. “There’s increased demand for what we’re doing and that’s in a market where everybody seems to be flat.”
Utilization of attorneys — or the number of hours billed per attorney — went down slightly, Immelt said.
While the firm said it raised its billing rate more than 3 percent last year, it won’t raise rates more than that this year.
London and Europe, where about 40 percent of the firm’s billings happen, delivered an unpredictable year.
“I don’t think anyone has been immune to the effects of Brexit,” Immelt said. “People put all their deals on hold.”
Deal work that dropped off in London in the middle of the year picked up slightly at the end of 2016 and so far this year, he said.
But the firm also suffered from the decline of pounds sterling in international exchange rates. “If exchange rates had remained consistent, then we would have seen a revenue increase” about two percentage points higher than what the firm reported in growth.
Still, the firm’s revenue in London grew 7 percent, to about £ 282 million, the firm said.
A similarly unpredictable election in the United States somewhat curtailed the firm’s work on regulatory activity. That “wasn’t really a surprise,” he said, while predicting a stronger 2017.
Hogan Lovells opened no new offices in 2016, though it moved back-office operations to Louisville. It made 40 lateral partner hires globally, while 16 partners left the firm for other legal jobs. “I’m pretty comfortable with our footprint,” Immelt said. “I don’t see a need to open five or 10 new offices.”
The firm would like to do more work in India, however — at the moment a relatively closed market for lawyers from other countries. Hogan Lovells’ other areas of expansion this year may be in energy law and life sciences and intellectual property transactional work, according to Immelt.
MATTERS AND CASES
Major deals included advising SABMiller when Anheuser-Busch InBev acquired it for $107 billion; advising Dell in its $3.1 billion sale of its tech services division; and advising Lockheed Martin on a $5 billion plan to spin off and sell an information systems business.
In other practices, the firm has emphasized the size of its regulatory department. It helped U.S.-based Carnival Corp. get licenses to sail cruise ships to Cuba last year, and worked for Maersk, the world’s largest shipping company, in an investigation in Europe.
In litigation, Hogan Lovells represented the health insurance provider Anthem on class action suits and multiple government investigations. The firm also noted in a statement regarding 2016 results several pro bono successes. It worked pro bono on a $24 million settlement for black Secret Service agents who accused the government of discriminatory hiring practices. In U.S. offices, total pro bono work clocked in at 85 hours per attorney.
The year also closed with the formal retirement of its longtime leader, Warren Gorrell Jr., who was responsible for much of the original D.C. firm’s expansion into corporate deal work and its 2010 transatlantic merger between Hogan & Hartson and Lovells of the U.K.
The offices that the firm occupies in Los Angeles, Denver and Washington had aesthetic turnover, with extensive renovations at the D.C. headquarters and new spaces for the latter two locations. Next year, Hogan Lovells attorneys will work out of new spaces in Houston and New York, Immelt said.
Immelt said the $9 million expansion of its back-office operations into Louisville was a big investment.
“We’re making a number of investments that were important for the long term health of our business.”