Calendar year 2010 can be seen as year zero for Hogan Lovells, with no true point of comparison for its financial results.
Turnover (£m): 582.1
Average PEP: 740
Equity spread(£k): 425-850
Profit margin (%): 32
RPL (£k) 422
Vision – Execution – Governance –
Prior to the May 2010 merger of UK firm Lovells and US outfit Hogan & Hartson, the former had an April year-end and the latter reported on a calendar year basis. Following the tie-up the entire firm reports to a December year-end, with the 2010 figures compiled on a pro forma basis. Under these conditions the combined firm generated a global turnover of £1.08bn and, taking the $20m (£12.18m) cost of the merger into account, produced a profit of £378.9m.
The Europe, Middle East and Asia operations – the part of the business included in the UK 200 – turned over £582.1m, 54 per
cent of the total, and made a profit of £185m. Comparing these figures with legacy Lovells’ 2009-10 numbers shows marginal rises
in turnover and profit. However, given that there is a four-month overlap between Lovells in 2009-10 and Hogan Lovells in 2010,
not to mention the fact that the 2010 figures include a chunk of revenue from legacy Hogan operations, the comparison is relatively meaningless.
The merged firm is run by a 17-person management committee made up of co-CEOs David Harris and Warren Gorrell, eight practice heads, five regional managing partners and finance co-heads Richard Olver (an accountant) and Prentiss Feagles. There is also a supervisory board. The committee and board have firmwide responsibilities, but the undisputed axis of power in the firm is between London, where Harris and Young are based, and Washington DC, where Gorrell and Christian work.
The firm is moving towards legacy Hogan’s merit-based remuneration system but is still in a transition period, meaning the bulk of the Europe, Middle East and Asia partners were on Lovells’ 30- to 60-point equity ladder during 2010. This meant the Europe, Middle East and Asia equity spread was tighter than the global one at £425,000-£850,000 against £250,000-£1m.
There will be an equity rebalancing on 1 January 2012, at which point all partners will be on the same system. Equity partners contribute the equivalent of around £4,000 per equity point.