As financial reporting season kicks off in earnest, Hogan Lovells has today (13 February) reported a 10% boost in global revenue to $2.68bn as profit per equity partner (PEP) jumped 20% to $2.74m.
This performance represents a $250m increase in the firm’s top line, contrasting with a $174m decline last year. After a 7% drop in revenue and an 8% decrease in PEP in 2022/23, this year’s double-digit growth strikes an optimistic tone for other Global 100 players.
UK revenue surged by 15% from $464m to $534, bouncing back from a 13% drop in the previous year, and aligning more closely with the firm’s 2021/22 financials.
The breakdown of revenue by region remained steady, with the Americas contributing 48%, consistent with last year. EMEA’s share of turnover increased slightly from 46% to 47%, while Asia-Pacific accounted for the remaining 5%, down 1% on last year.
In terms of practice areas, the proportion of revenue generated by corporate and finance work increased only 1% to 41%, the disputes practice remained the same at 28%, and intellectual property, media and technology (IPMT) dropped from 32% to 31%.
Speaking to Legal Business, chief executive Miguel Zaldivar (pictured) was satisfied with the firm’s results: ‘It’s a record performance and it’s a differentiating year for the firm if you compare these results with what the market in general saw. We tend to be optimistic but realistic. Every year we see our firm getting stronger and stronger. Our teams deliver a record year for the firm, so we’re delighted.’
Discussing the drivers of this growth, deputy chief executive Michael Davison explained: ‘It’s being able to deliver high quality legal services consistently across our network and being recognised for that. If you look at the way the market reacts to our brand, it’s a quality brand and therefore we’re getting clients coming to us for more of their legal spend.’
In his previous interview with LB, Zaldivar explained the firm’s simple international strategy with a focus on building up in the US. On the firm’s current stance on this, Zaldivar said: ‘Everybody understands the strategy. We are actually getting even more granular explaining that strategy internally. It’s about that global nature. We’re not imposing a culture on anybody, we treasure being global, and it’s shining in highly regulated sectors.’
He added: ‘We are going to continue to target high performing talent in key markets. Some of that talent will be through internal promotions, but we hope to be able to continue to attract high performing partners in New York and other foreign places. New York was one excellent step in the right direction, but we’re not finished.’
On other jurisdictional growth, Zaldivar explained: ‘London is our largest office and I am particularly proud of the achievements in that office. I’m also very proud of the growth that we have experienced in Germany, and I have to say that Paris has also been key to our success. It’s not only Paris, Germany and London that are key engines of the firm.’
The financial results come as Hogan Lovells announced yesterday (12 February) that five partners from Orrick have joined the firm in Italy. Led by Patrizio Messina, the former head of Europe and structured finance at Orrick, the newly joined partners include Annalisa Dentoni-Litta, Madeleine Horrocks, Alessandro Accrocca, and Paola Barometro. These hires are part of a larger team of 23 M&A and finance lawyers that have moved over from Orrick, split between the Rome and Milan offices.
A list of standout mandates for 2023 included advising real estate investment trust Life Storage in defending against a hostile takeover and its subsequent $12.7bn merger with Extra Space Storage, forming a $47bn enterprise value company. The firm also advised Mercedes-Benz Group on its joint venture with MN8 Energy to establish a network of over 2,500 high-powered electric vehicle chargers under the Mercedes-Benz brand across the US and Canada.
Asked about the potential of a merger with a US firm, following the firm’s failed talks with Shearman & Sterling, Zaldivar asserted: ‘We do not have ongoing merger conversations with anyone, but we anticipate being quite attractive in a market where experts are predicting consolidation. If a weaker brand wants to be part of a global powerhouse and benefit from the success, we have consistently experienced for the past four years, then we are open for business, and we’ll take your call.’