Hogan Lovells has posted a dip of 1.9 per cent in firm-wide revenue, with management blaming exchange rates for the decrease.
Average profit per equity partner also fell, by 5.8 per cent, to $1.097m for 2012 compared with $1.165m in 2011. The firm said this was also “largely” due to exchange rate differences along with the costs associated with the closure of the firm’s office in Abu Dhabi.
Similarly revenue per lawyer decreased by 3 per cent to $716, 000 in 2012 compared with $739,000 in 2011, with the firm again citing exchange rate differences and a slight growth in the number of lawyers as the reason.
Co-CEO David Harris described the year as “very solid” with “basically flat” revenues.
“It’s the exchange rate that accounts for the dollar reduction,” said Harris, pointing out that several years ago turnover at legacy Lovells had benefited from exchange rate fluctuations.
“We have three operating currencies which means to an extent we’re dependant on the currency markets and they can work against you as well as in your favour,” said Harris. “But last year the impact wasn’t huge.”
Around 65 per cent of Hogan Lovells’ lawyers are based outside the US with close on 50 per cent of billings accounted for in dollars and the balance largely split between sterling and euros.
In terms of total fee-income generation, the Americas represented approximately 45 per cent of total billings, London generated 24 per cent, Continental Europe 24 per cent,, and Asia & Middle East 7 per cent. Harris said this was broadly the same as in 2011.
Revenue at Hogan Lovells’ five global practice groups also remained largely similar to the previous year, with corporate represented approximately 32 per cent of total billings, litigation, arbitration and employment 29 per cent, regulatory 15 per cent, finance 14 per cent, and IPMT 10 per cent.
Highlight matters Hogan Lovells worked on during the 2012 financial year include advising ExxonMobil on the $3.9bn sale of its Japanese subsidiary to TonenGeneral Sekiyu; Dell on its $24bn deal to go private, which closed earlier this year; and Equity Residential on the $16bn acquisition of Archstone from Lehman Brothers.
This year the firm also won a role advising on the European competition, pensions and employee share plan aspects of Liberty Global’s £15bn acquisition of Virgin Media.