Hogan Lovells’ global revenues grew by just over 2 per cent in 2015 to $1.82bn (£1.26bn), while average profit per equity (PEP) reached $1.25m.
The firm posted similar percentage increases in both metrics, with turnover growing from $1.78bn to $1.82bn and PEP nudging up 2.7 per cent from $1.22bn to $1.25bn. Revenue per lawyer, however, decreased by 4 per cent from $754m to $723.7m.
Hogan Lovells CEO Steve Immelt said the results exceeded the firm’s budget, although he added that both sets of financials were affected by the decline in value of the euro compared to sterling, as well as a stronger dollar.
“Every pound and euro produces fewer dollars, so revenues have been affected by this,” Immelt told The Lawyer. “We have a balance that is not easily replicated by other firms and it makes us more exposed. That’s just the nature of it.”
London and Continental Europe accounted for a slightly smaller percentage of firmwide billings last year, generating 43 per cent instead of 47 per cent in 2014. The 2014 results had seen the region marginally outstrip the Americas in terms of contribution, but the Americas this year increased its proportion to 50 per cent.
“It was a good market in London but it was in the US where M&A really started to pick up,” Immelt added. “It was also the full financial year for our new Mexico office, which opened in July 2014.”
Meanwhile Asia and the Middle East made up the remaining 7 per cent, although Immelt said he wanted revenue contribution from these regions to grow in the next few years to 10 per cent. Asia is a continuing focus for the firm, with the firm last year launching an office in Australia. However it also ended its relationship with Indonesian association firm Hermawan Juniarto.
As a result of the “particularly active” M&A market, the gap widened between corporate and litigation revenue, as corporate represented 32 per cent of total billings, while litigation, arbitration and employment made up 28 per cent. Government regulatory, finance and IP, media and technology generated 16 per cent, 14 per cent and 10 per cent respectively.
“We’re happy with the results considering the global demand for legal services is virtually flat,” Immelt said. “Since about 2008, the total number of billable hours worked has remained flat so we’ve had to fight for our share.”
While the firm saw an increase in global turnover last year, its 2014/15 LLP accounts nevertheless revealed that offices outside the Americas saw a drop in turnover to £591m over 2014/15 compared to £604m the year before.
The firm’s PEP figure for the LLP also dropped below £700,000, with profits affected by the decrease in revenue and increased operating expenses.
Hogan Lovells said LLP revenue would have increased by 1 per cent if the impact of currency was factored out, while global revenue would have increased by 8.2 per cent.