Legal Business

‘Plenty of challenge’: Hogan Lovells earns 6% revenue uptick to hit $1.9bn as partner profits stall

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Financial results 2016/17 Hogan Lovells

After years of lacklustre growth, Hogan Lovells has seen a boost in global turnover of 6% up to $1.93bn for 2016. At like-for-like rates the firm said results were up around 8%, while in sterling the firm experienced an almost 20% boon due to the falling pound.

Profit per equity partner (PEP) was static at $1.3m while revenue per lawyer increased only 2% to $738,000 for 2016 from $724,000. The increase was a positive step compared to a previous RPL fall from 2014 to 2015 of 4%.

Hogan Lovells chief executive Steve Immelt told Legal Business: ‘It was a year of plenty of challenge, but we are happy with how we ended up and optimistic about 2017.’

The firm’s turnover breakdown saw the Americas bring in 52% of total billings as London and Europe together contributed 41% and Asia and the Middle East provided 7%.

Hogan Lovells’ London office enjoyed a solid year, with revenue growing 7% from £263m in 2015 to £282m in 2016.

While some former partners have questioned the potency of the London corporate offering with the imminent loss of long-term client SAB Miller following its acquisition by Anheuser-Busch InBev last year. Immelt said: ‘Our corporate practice was strong this year with London participating in the SAB Miller transaction while the US had major deals for Dell and Lockheed Martin. Clients get bought and sold, it’s an important and long-standing relationship but we are not dependent on any particular client as we’ve a diversified practice.’

Immelt (pictured) added: ‘The overall legal market has not been encouraging, but there is more complexity in work than ever before and clients need sophisticated advice and a deep sector understanding.’

The firm has continued investment in legal services, adding a new back office centre in Louisville Kentucky, which now has around 70 employees, in addition to its service centres in Birmingham in the UK and Johannesburg in South Africa.

Hogan Lovells added four new partners in the UK last year, including Pinsent Masons fintech partner John Salmon. In total, Hogan Lovells added 40 lateral partners in 2016.

Practice breakdown saw corporate handling around 32% of billings, while litigation, arbitration and employment earned 28%, government regulatory 16%, finance 14% and intellectual property, media and telecoms took in 10%.

Yesterday saw US giant Latham & Watkins post similar growth compared to the market average, growing revenue 7% to $2.8bn. PEP broke the $3m mark for the first time, while revenue per lawyer rose 2% to $1.23m

matthew.field@legalease.co.uk

 

Legal Business

Staying put: Hogan Lovells halts London office HQ search

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Hogan Lovells

Hogan Lovells has opted against moving its London headquarters, preferring to stay in its long-term home of Atlantic House instead. However, the firm is persisting in its search for new space for its offices at 21 Holborn Viaduct and Meridian House.

The decision comes after the firm was able to negotiate a favourable deal with its existing landlord, Deka Immobilien Investment.

Last year, Hogan Lovells began a search for a new headquarters, instructing Cushman & Wakefield to find 350,000 sq ft of office space.

But the firm, which recently posted an 8% increase in turnover outside the US, has halted the search in favour of remaining in its Atlantic House HQ, which it has occupied since 1977.

Hogan Lovells’ managing partner for the UK and Africa Susan Bright said in a statement: ‘After looking at a number of options in the market and having had positive discussions with our landlord, Deka Immobilien Investment, we have decided to remain in Atlantic House until our lease expiry in 2026, during which time we plan to undertake a refurbishment to ensure the space best meets the future needs of our business.

‘We continue to consider our options for 21 Holborn Viaduct and Meridian House.’

In addition to the increase in turnover covering the firm’s operations outside the US, Hogan Lovells has also seen a significant boost in PEP for the 2016 financial year. Equity members took home on average £879,000 this year, a 26% increase from 2015’s figure of £698,000.

The firm began 2017 with 29 partner promotions, with three new partners in London. The new City partners were Richard Goss in banking, Nathan Searle in international arbitration and Tarek Eltumi in project finance.

tom.baker@legalease.co.uk

 

Legal Business

Hogan Lovells International posts 26% PEP boost as firm moves to pay down pension liability

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Financial results 2015/16 Hogan Lovells

Hogan Lovells International, which covers the firm’s operations outside of the US, has seen an 8% increase in turnover compared to the previous year, according to the firm’s filings on Companies House. This saw revenue jump from £591m in 2015 to £638.2m for the year ended April 2016.

An increase in turnover has coincided with a boost in profit per equity partner (PEP). Equity members took home on average £879,000 in 2016, a 26% increase from 2015’s figure of £698,000. The average number of members at the firm has remained effectively the same, increasing to 303 from 302.

For the calendar year 2015, Hogan Lovells’ global PEP was £817,000. This means PEP outside the US is 8% higher than the firmwide figure.

There was also a rise in the number of fee earners at the firm. An increase from 1,531 in 2015 to 1,564 in 2016 saw staff costs rise 4% from £254m to £264m.

Partners at the firm are also set to pay in additional capital as part of a drive to boost Hogan Lovells’ capital reserves. These payments will increase by 8% per year until 2021, equating to around £10m each year.

According to the accounts, the firm last valued its pension scheme in April 2015 and the valuation showed a deficit of £5.1m. The firm paid deficit contributions of £1.5m for the year ended 30 April 2016, and has plans to pay £1.9m until April 2019 and £0.6m in May 2019.

At the start of the year, the firm promoted 29 new partners, including three in London. This round of promotions is an increase on 2016’s figure, where 24 lawyers were promoted to partner.

tom.baker@legalease.co.uk

Legal Business

In-house: Open banking group appoints first GC and picks Hogan Lovells as sole adviser

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In-house Hogan Lovells

An open banking initiative funded by the UK’s nine biggest banks has appointed former Lloyds and Halifax lawyer Marcus Ezekiel as its first general counsel, Legal Business has learned.

The Open Banking Implementation Entity was founded in August last year as a result of a Competition and Markets Authority (CMA) report into retail banking in 2016. The group is funded by the UK’s biggest banks, including Lloyds Banking Group, RBS, HSBC, Barclays, Nationwide and Santander. Hogan Lovells is acting as the group’s sole external legal adviser.

The group’s goal is to provide a secure way for customers to compare the deals they are getting from banks. The initiative aims to begin a roll out of sharing customer data by January 2018, increasing competition between major banks, fintechs and challenge banks.

Ezekiel joins the body after working as a legal consultant in Europe for Dutch telecoms giant VimpelCom. He has spent time at a number of companies as an interim general counsel, including the World Gold Counsel and G4S.

Prior to this, he spent a year as Lloyds GC for government asset protection, joining in 2009. He also served as head of legal for Halifax Bank and was chief legal officer of internet bank Egg.

Ezekiel  told Legal Business: ‘We are dealing with a very dynamic legal, commercial and regulatory landscape . In banking this is a game changing intervention and one of the first of its kind in the world. Stakeholders are not just the banks, but fintechs, challenger banks, aggregators and intermediaries as well as regulators and the government.’

The CMA’s report called on the UK and Northern Ireland’s biggest retail banks to use more open systems for payments to make it easier to switch and compare banks.

The report said: ‘Implementation of an Open API banking standard has the greatest potential to transform competition in retail banking markets. We believe that it would significantly increase competition between banks, by making it much easier for both personal and business customers to compare what is offered by different banks and by paving the way to the development of new business models offering innovative services to customers.’

matthew.field@legalease.co.uk

Legal Business

Revolving doors: Addleshaws loses another litigator as Kirkland, Hogan Lovells and Bryan Cave make new hires

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Strategic recruitment Bryan Cave Leighton PaisnerHogan LovellsKirkland & Ellis

The steady pace of lateral hires continues in the beginning of 2017, with Kirkland & Ellis, TLT, Hogan Lovells, K&L Gates and Bryan Cave making appointments around the globe.

Addleshaw Goddard has lost another litigator this year as K&L Gates has taken on Clarissa Coleman, who joins from Addleshaw Goddard. Coleman is the second litigator to exit the LB100 firm’s disputes practice this year, following the resignation of Kambiz Larizadeh who is moving to Akin Gump Strauss Hauer & Feld.

Hogan Lovells has also solidified its global practice with the hire of Marc Elvinger as a partner for the firm’s Luxembourg office. Elvinger, previously of Arendt & Medernach, has 15 years’ experience in corporate matters, M&A and transactional business law.

Elvinger, who will link up with current Luxembourg partners Gerard Neiens and Pierre Reuter, said: ‘Hogan Lovells represents a formidable opportunity for me. Corporate law is a global business and I am delighted to join a firm with global reach and genuine international capability.’

Judith Allen, formerly of A&L Goodbody, will bolster TLT’s Belfast office after her appointment on 18 January. An expert of Northern Irish property law, Allen joins as a real estate partner. TLT’s real estate group acts for a variety of clients, including BBC, EDF, WHSmith and Pets at Home.

TLT head of real estate Maria Connolly said: ‘Over the last 12 months we have seen significant growth in our real estate practice on a national scale. Having Judith on board will only further cement our expertise within this sector.’

Bryan Cave has expanded its London-based US private client team with the appointment of David Adler, who joins as a partner from McDermott Will & Emery. Adler, a specialist in advising international entities, individuals and intermediaries on US-related planning, said: ‘Bryan Cave’s private client team in London, with its impressive reputation and its focus on helping those with US interests, is a perfect fit for me. I have also been attracted by the collaborative and friendly culture at the firm.’

Kirkland & Ellis has strengthened its Shanghai office after taking Paula Liu from Clifford Chance (CC) to join as a partner. Liu, who joins from CC’s Shanghai office, specialises in M&A transactions with a particular focus on private equity.

David Zhang, senior partner of Kirkland’s Asia corporate practice group, said: ‘Paula has built a reputation as one of the leading young corporate and private equity lawyers in Shanghai.

‘She is a talented lawyer and an important addition to our Shanghai office as we look to further strengthen the firm’s China corporate practice.’

tom.baker@legalease.co.uk

Legal Business

Private equity: Advent and Bain return to Weil for latest payments acquisition

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Finance Hogan LovellsWeil, Gotshal & Manges

Weil, Gotshal & Manges and Hogan Lovells have taken key roles as Advent International and Bain Capital Private Equity have agreed to purchase Concardis for a reported $745m.

The acquisition of the German firm is the latest in a run of purchases of payment providers including Worldpay. Concardis’ transaction volume grew 20% in the past two years from €35.2bn to €41.9bn.

Concardis was owned by a group of German private banks, co-operative banks, savings banks and DZ Bank. Deutsche Bank and Commerzbank coordinated the selling shareholders and were advised by Hogan Lovells. Hogan Lovells’s team was led by corporate partner Tim Brandi in Frankfurt.

Weil acted for Advent and Bain again, with a team comprising both German and London partners. In Germany managing partner Gerhard Schmidt acted on the deal with partners Stephan Grauke, Christian Tappeiner, Barbara Jaegersberger, Uwe Hartmann and Tobias Geerling. In London Advent’s go to man Marco Compagnoni and Tom Richards acted on the purchase.

Compagnoni said: ‘[Advent and Bain] have had a series of excellent deals in the transactions sector, such as Worldpay, this is yet another.’

Other recent Weil mandates for Advent and Bain include the acquisition and subsequent exit by IPO of Worldpay, the €2.15bn acquisition of Italian payment services provider ICBPI in 2015 and the €1.1bn purchase of Italian payment processing company Setefi in 2016 from Intesa Sanpaolo.

The US firm recently acted on OMERS first European private equity exit as it sold V.Group to Advent. Weil acted for the private equity arm of the Ontario Municipal Employees Retirement System, while Freshfields Bruckhaus Deringer took a spot acting for Advent with London private equity head Adrian Maguire taking the lead.

victoria.young@legalease.co.uk

Read more: ‘The M&A Report: Private equity offers the clients for all seasons’

Legal Business

Hogan Lovells appoints three in London in 29-strong global partner promotions round

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Partnership promotions Hogan Lovells

Hogan Lovells‘ round of New Year promotions has seen the firm appoint 29 new partners including three in London.

New City partners at the firm include Richard Goss in banking, Nathan Searle in international arbitration and Tarek Eltumi in project finance.

This promotion round is an increase on 2016, when the firm promoted 24 lawyers to partner, however this included five made up in London.

The January 2017 round sees female partners make up 28% of the new cohort, with eight female and 21 male partners.

Of the new partners, 19 were promoted in the US, as well as six in Europe, three in London and one in Asia. The latest batch of partners include eight in corporate, eight in litigation and arbitration, five in government regulatory, five in finance and three in intellectual property.

Hogan Lovells chief executive Steve Immelt (pictured) said: ‘Supporting and growing our internal talent pipeline is a key priority for Hogan Lovells and integral to offering our clients the highest quality service. It gives me great pleasure to promote from within and recognise the hard work and dedication of these individuals, who represent the quality, breadth, and depth of Hogan Lovells around the world, which no other law firm can match.’

Other firms recently making their global promotions round in December include Jones Day and Cadwalader, Wickersham & Taft. Jones Day made up five London partners as part of a 47-strong global round, while Cadwalader made up 10, including two in the City.

Hogan Lovells partner promotions (London)

Richard Goss, banking

Nathan Searle, international arbitration

Tarek Eltumi, finance

matthew.field@legalease.co.uk

 

Legal Business

Revolving doors: Addleshaws and Hogan Lovells boost ranks as Matrix targets Freshfields and Olswang construction head exits

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Strategic recruitment Addleshaw GoddardHogan LovellsMatrix Chambers
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In a busy week for laterals, Addleshaw Goddard, Hogan Lovells and Herbert Smith Freehills (HSF) have boosted their international ranks, while Matrix Chambers and Penningtons Manches have hired in the City.

Addleshaws has developed its Asia corporate focus with the hire of Andrew Yang in Hong Kong. Yang, who joins Addleshaws from Goodwin Procter, advises on all aspects of M&A and commercial transactions for small to medium enterprises, listed companies, venture/growth funds and other financial institutions based throughout the Asian region.

Nigel Francis, head of Addleshaws’ Asia practice said: ‘The continuation of outbound investment from Chinese organisations as well as the promised economic reform that will ultimately lead to investment in China’s state owned enterprises represent exciting future opportunities. Andrew’s experience aligns perfectly with these plans and means our Asia practice will be well placed to capitalise as these opportunities arise.’

Meanwhile Hogan Lovells has continued its Australia expansion with the hire of Matthew Johnson, who joins the firm from Clayton Utz. Johnson, who was closely involved with Clayton’s China practice, will focus on private and public M&A, private equity, equity capital markets and corporate advisory in addition to working with the firm’s energy and resources sector teams.

Closer to home, HSF has bolstered its Paris offering, hiring real estate partner David Lacaze from Paul Hastings. Lacaze’s clients include financial institutions and investment funds. Donald Rowlands, head of HSF real estate UK/EMEA said: ‘The addition of David to our Paris team will be crucial to helping us deliver on our ambitious plans for the growth of our European real estate practice and will complement the investments we have made in Germany and Madrid to augment our top-tier UK and French practices.’ However, going the other way, HSF lost two associates and a special counsel to White & Case down under, following the US firm’s 10 partner hire to launch in Australia, earlier this year. HSF senior associates Adeline Pang and Ged Cochrane, and of counsel Michelle Keen will be made up to partner when they join White & Case later this year.

In the City, Penningtons Manches has expanded its construction and infrastructure practice with the addition of Francis Ho from Olswang.

Ho was head of construction at the firm. Recent deals include the redevelopment of Battersea Power Station, the construction of a major new Premier League stadium in London and the redevelopment of The Langham Hotel in Marylebone.

Finally, Freshfields Bruckhaus Deringer has lost two high-profile names this week. In addition to the departure of M&A partner Ben Spiers to Simpson Thacher & Bartlett, Matrix Chambers hired Raj Parker, head of the firm’s insurance and reinsurance team as an associate member.

David Scott, partner at Freshfields said: ‘Whilst he is retiring from Freshfields Bruckhaus Deringer, he is not retiring full stop, as he is going to return to the Bar and he will practice at Matrix Chambers. I have no doubt that Raj will have a very interesting and varied mix of work whilst he is there and we wish him all the best for his future career around the corner at Matrix Chambers.

kathryn.mccann@legalease.co.uk

Legal Business

Hogan Lovells becomes third firm to launch in Shanghai Free-Trade Zone

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China Hogan Lovells
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Association with Fidelity Law to lead to joint office offering Chinese law advice

Hogan Lovells is the third international law firm to enter the Shanghai Free-Trade Zone (FTZ) after agreeing an association with local outfit Fujian Xiamen Fidelity Law Firm in October.

Legal Business

Mishcon and Hogan Lovells line up as KWM takes case against Goodwin Procter over PE team

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Litigation Goodwin ProcterHogan LovellsKing & Wood MallesonsMishcon de Reya
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Mishcon de Reya and Hogan Lovells are to face off as King & Wood Mallesons (KWM) issues a claim against Goodwin Procter over several private equity hires made by the US firm.

As reported by Legal Business in July, KWM wrote to Goodwin over potential legal proceedings against it concerning the exit of a six-partner private equity team. The team, which included Paris managing partner Christophe Digoy and Maxence Bloch, is understood to have walked out with at least £8m in annual billings.

KWM’s claim is understood to be against both Richard Lever and Goodwin Procter. Lever announced he would leave KWM in April 2015 to develop a City PE practice at Goodwin, while the Boston-based announced the Paris team would join it from KWM a year later.

Goodwin is being represented by Hogan Lovells’ employment partner Stefan Martin, while Mishcon’s head of employment Daniel Naftalin is acting for KWM. Goodwin and KWM both declined to comment on the case.

KWM has said it will re-build its practice in France, highlighting that its profitable Paris funds team was unaffected by the Goodwin departures. The firm’s European partnership has undergone a testing 18 months, having recently re-organised its structure, moving from 17 to three divisions, asked 24 partners to leave in March and increased its loan facility with Barclays earlier this year.

This month the firm replaced both leaders for its legacy SJ Berwin practice, opting for Frankfurt partner Michael Cziesla as EUME senior partner, defeating Dubai-based disputes partner Tim Taylor QC. Earlier this October the partnership elected Tim Bednall as EUME managing partner, defeating Gareth Amdor in a two-man race for the position.

victoria.young@legalease.co.uk

For more on King & Wood Mallesons, subscribers can see Branded for an in-depth look at the firm.