Hogan Lovells grew profits by nearly 26% in ‘record’ 2021

Signage is seen outside of the Hogan Lovells law company in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly

(Reuters) – Global law firm Hogan Lovells, among the highest-grossing law firms in the U.S., on Tuesday reported a jump in total revenue in its 2021 fiscal year, seeing 12.9% growth to nearly $2.61 billion.

The firm also said its profits per equity partner increased 25.9% from 2020, reaching $2.48 million in what the 2,600-lawyer firm called a “record” year.

“The key to the 2021 success was balance,” said Miguel Zaldivar, Hogan Lovells’ chief executive officer, who pointed to a spread of total billings across geographies, practice groups and sectors.

Law firms in the U.S. in general had a busy year, with revenue climbing 14% on average during the first nine months of 2021 over the same period of 2020, driven by strong client demand, according to a recent report from Wells Fargo Private Bank’s Legal Specialty Group.

Competition for talent to handle the surge in work has led to compensation expense pressures as firms dole out bonuses and raise salaries, according to a recent Citi Private Bank Law Firm Group and Hildebrandt Consulting advisory.

Hogan Lovells, which has 47 offices, said 42% of its billings come from its corporate and finance practice group, a similar level to 2020.

M&A work boomed for large law firms in 2021. Zaldivar highlighted Hogan Lovells’ representation last year of Oracle Corp in its $28.3 billion acquisition of health care data and analytics company Cerner Corp.

Hogan Lovells’ regulatory and intellectual property, media and technology work made up 30% of its billings while litigation, arbitration and employment represented the remaining 28%, the firm said.

Michael Davison, the firm’s deputy CEO, said Hogan Lovells has made strides toward running more efficiently, in what the firm called “financial discipline.” That includes streamlining processes like how employees record their time and submit invoices to clients, he said.

Zaldivar nodded to the cost cuts the firm has made over the past 18 months. He said there are real estate savings benefits that are “kicking in” so far in 2022.

Zaldivar said in July the firm had decreased its office footprint, including re-negotiating and subletting space in several markets.

As law firms prepare their returns to in-person work, Zaldivar said, Hogan Lovells offices and practice groups will dictate what suits their own needs, avoiding firm-wide directives.

Read more:

Profits rise at Florida’s Akerman as law firms expect banner year

Baker McKenzie passes $3 bln revenue mark, boasting spike in profits

Our Standards: The Thomson Reuters Trust Principles.