The partnership of Hogan Lovells has voted in chief executive Miguel Zaldivar for a second four-year term, the firm today (5 September) confirmed.

The move follows on from the firm’s board’s unanimous recommendation that Zaldivar (pictured) be re-elected for a term starting on 1 July 2024, subject to a partner vote, which closed at the end of August.

Speaking with Legal Business on the rationale of his re-election, Zaldivar outlined the four factors which contributed to the vote in his favour: ‘Firstly, the firm has a very clear vision which we implemented three years ago when I became the CEO, which emphasises the fact that we are a true international firm. We shine at the intersection of business and government, so with governments active in the highly regulated sectors like life sciences, energy, technology and financial services, we have to be the preeminent provider of solutions. So, the clarity around our vision and having the discipline to stick to those principles.’

He continued: ‘The second factor is that we have a very simple strategy which is easy for management to implement, as well as for the board, partners and the firm at large to measure and assess success. We put our clients at the centre of everything we do, so everybody is driven by this principle which has worked for us.’

Zaldivar also flagged the firm’s continued investment as a factor. ‘We decided to grow by emphasising organic growth by allowing our own people to get promoted, both on the legal side and business services. We concentrated our investments on our existing footprint instead of opening more offices, apart from one in Dublin because of the implications of Brexit to our financial services clients. It is about enhancing the strength of our firm.’

The final factor, he noted, was ‘doubling down on our commitment to diversity, equity and inclusion and achieving record levels of promotions and allowing diverse talent to achieve their maximum potential in the organisation.’

Asked about the firm’s hiring and jurisdictional growth strategy for the next 12 months, Zaldivar responded: ‘We want to grow in the US. It’s one of the most sophisticated markets in the world. We have identified growing the scale of our business in three states where we already have successful practices. We are thinking about expanding our business in New York, California, and Texas.

However, this growth in the US will not be at the expense of other key practices, he said. ‘We view English law as a very important commodity and the legal basis is relevant, not only to the UK, but to the work that is done on the continent, in Africa, in the Middle East and in Asia, so keeping our preeminent London offering is key in continuing to grow. We will probably continue to expand our existing APAC offices.’ We are looking at what is happening in Indonesia and the growth in Vietnam, south-east Asia, China and Japan. We are very committed to that market,’ he said.

Asked about the potential of a merger with another US firm, in the wake of the firm’s failed talks with Shearman & Sterling, Zaldivar asserted: ‘We don’t need to merge to achieve our goals. If you look at the US side of our business, it is worth about $1.2bn and has about 1,000 lawyers. It has a defined brand and is very strong. We are, however, hopeful that groups of successful, high-performing lawyers will be attracted to our firm. If we have groups of partners interested in talking to us in New York, California and Texas, we will talk to them for sure.’

Zaldivar, however, did not rule anything out for the future, stating: ‘If a firm is interested in talking to us, I will talk to them – I’m a deal lawyer – but we will not compromise the integrity of our balance sheet. We are not interested in deals that come with significant pension obligations, debts, or firms that have experienced a drop in revenue, talent, or partners. We want to associate ourselves with winners, which is why we are not in the market for a merger.’

Zaldivar concluded: ‘We are looking for opportunistic growth in the US, and we don’t believe that the only way to achieve that is through a merger. We will look at every opportunity with teams and firms, but we’re not actively pursuing a merger.’

ayesha.ellis@legalease.co.uk

elisha.juttla@legalease.co.uk

The board of Hogan Lovells has given its unanimous recommendation for Miguel Zaldivar (pictured) to be re-elected as the firm’s chief executive for another four-year term, starting on 1 July 2024.  The move will be subject to a partner vote, which closes at the end of August.

Succeeding Steve Immelt, Zaldivar assumed the role of the firm’s CEO on 1 July 2020, after previously serving as the regional CEO for Asia Pacific-Middle East, based in Hong Kong.

In a statement confirming the board’s recommendation, Hogan Lovells chair Marie-Aimée de Dampierre, former head of the Lovells Paris office, said: ‘Miguel and his management team have delivered outstanding results over the past three years, steering our firm through turbulent and unprecedented times to achieve our highest ever financial performance, while keeping a strong focus on continuing to foster our ambitious and supportive culture. He has a clear vision and strategy, which we believe will lead us to even greater success.’

Under Zaldivar’s leadership, the firm announced ‘record’ financial results for 2021, adding $300m to its top line as revenue increased 13% from $2.3bn to $2.6bn. PEP also shot upwards 26% from $2m to $2.5m.

However, the firm’s latest financial report revealed a 7% decline in revenue to $2.43bn, alongside an 8% decrease in PEP to $2.28m. Nonetheless, Zaldivar emphasised that the firm’s performance remained strong: ‘This was actually our second-best year ever. Last year was a record year for us,’ he told Legal Business at the time.

Zaldivar’s tenure so far has been eventful to say the least. The firm’s much-talked about merger talks with Wall Street giant Shearman & Sterling having fallen over at the start of March, Zaldivar the same month assured Legal Business that the firm’s strategy remained unchanged. Alongside four core offices in London, Washington DC, Paris and Germany, he told LB that the firm aims to expand in three key US markets. ‘We said in 2020 that our priorities include a focus on growth in three markets: New York, Texas and California. And that remains true.’ He added.

Last year the firm added private equity partner Parikshit Dasgupta from Reed Smith in New York, as well as hiring M&A partners Christoph Naumann and Torsten Rosenboom from Watson Farley & Williams as part of a team transfer in Germany the year before.

The firm promoted the largest class of partners ever this year, elevating 38 new partners and 77 new counsel including the highest percentage of female partner promotions in the history of the firm, at 58%.

However, the firm also faced departures under his leadership, including the exit of two longstanding partners. Last year pensions partner Faye Jarvis moved to Macfarlanes in London while M&A partner Ben Higson left to be appointed as Vinson & Elkins’ London head of corporate.

elisha.juttla@legalease.co.uk

‘Has the strategy changed? The short answer is: no, it hasn’t.’

That was the message from Hogan Lovells chief executive Miguel Zaldivar, who spoke to Legal Business alongside deputy chief executive Michael Davison about the firm’s strategy after its proposed merger with Shearman & Sterling fell through recently.

Zaldivar (pictured) and Davison’s comments echoed those they made to Legal Business upon the release of the firm’s 2022 financials in late February.

‘We’re ready to grow’, said Zaldivar. ‘We’re ready to consolidate our market position in our four engines.’ Alongside those four core offices in London, Washington DC, Paris, and Germany, the firm also aims to expand in three key US markets. ‘We said in 2020 that our priorities include a focus on growth in three markets: New York, Texas, and California. And that remains true.’

The firm aims to focus on the tech sector in California and on energy and life sciences in Texas.  New York, meanwhile, is a potential fifth engine, with Zaldivar highlighting its importance as a financial hub. ‘New York is linked to our commitment to the financial industry, where we think we can grow more, to build on our strengths in London. It’s a natural bridge that can further connect what we do in Europe to what we do in the US.’

Neither Zaldivar nor  Davison would comment on  the motivations behind the proposed merger with Shearman or what caused the discussions. But it is easy to see what might have been attractive about the prospect of a combination with a long-established Wall Street firm.

Still, Hogan Lovells has no intention of altering its ambitions. ‘Ideally’, said Zaldivar, ‘we would achieve a greater critical mass in New York by combining with going concerns. It doesn’t have to be an entire firm. We’re open to any option that we can explore. If it’s an opportunity to grow in one of our five key industry sectors, and in the regions that we focus on in our business plan, we will explore that.’

This resolve makes sense for Hogan Lovells, perhaps in a way that it would not for Shearman. The Wall Street firm saw significant attrition as rumours of the merger percolated through the market, losing four partners in London alone in January and February 2023. Last week it announced that it had accelerated its transition to a new senior partner, with current global managing partner Adam Hakki due to take over from David Beveridge after a formal election later in the year. Shearman has been keen to present this move as merely a slight adjustment, bringing forward a change that was already on the cards. Nonetheless, many in the market have read this as a pivot.

Hogan Lovells, for its part, has suffered no such losses, and a source with knowledge of the firm said the end of merger talks has prompted little disappointment among its London partners. Despite a 7% drop, Hogan Lovells’ revenues in 2022 remained comfortably above the $2bn mark, at $2.43bn, the firm’s second-best year, behind only 2021.

‘The strategy has not changed’, said Davison. ‘And we’re still very focused on delivering it.’

alex.ryan@legalbusiness.co.uk