…but accepts patience is a virtue if it is ever to be at the core of the Big Apple.
It has become almost customary for partners at New York’s white shoe elite to dismiss the threat posed by Hogan Lovells.
“I don’t consider it a major player,” says one. “No one is talking about [the merger],” adds another.
The comments are aimed primarily at the firm’s corporate and finance practices, a weakness of which Hogan Lovells is acutely aware.
Growing the teams in New York is a priority. If it wants to fulfil its stated aim of winning work from the likes of Simpson Thacher & Bartlett or Sullivan & Cromwell, it does not have a choice.
Although Hogan & Hartson legacy partners make up the majority of the finance practice, much of its success is being staked on two Lovells partners. Restructuring specialists Christopher Donoho and Robin Keller have been identified as pivotal figures around which the firm intends to develop its finance offering.
Since the merger came into effect on 1 May the firm has made just one partner hire in New York, bringing in capital markets and structured finance specialist Emil Arca from Dewey & LeBoeuf.
Understandably, for the time being it is more concerned with integrating the New York office and marketing its newfound capabilities to clients.
One of the main ways of ensuring integration is to team up Lovells partners with Hogan & Hartson associates, and vice-versa. Even personal assistants and secretaries have been redeployed in the same manner.
In Warren Gorrell the firm has a co-chair who understands better than most the challenges of expanding in New York. His message? Be patient. Gorrell, who was tasked with setting up Hogan & Hartson’s New York base 12 years ago, recalls that back then it was just him and an associate.
“Now there are 172 lawyers,” says Gorrell. “By any measure, that’s excellent progress.”
Over the years Hogan & Hartson embarked on an ambitious period of expansion, acquiring New York firms Davis Weber & Edwards in 2000 and Squadron Ellenoff Olesent & Sheinfeld two years later. Is a similar strategy likely from Hogan Lovells?
“I think it’s unlikely we’ll be making any additional law firm acquisitions,” says Gorrell.
Instead, expect to see the firm acquire groups of lawyers from its rivals. “Teams have the benefit of bringing more of a following, and I think it also facilitates integration,” says co-chair David Harris.
One thing that could hinder expansion is the insistence that new arrivals fit the firm’s culture.
“Both Lovells and Hogan & Hartson were recognised for their collegiality, sharing clients and contacts,” claims Harris. “It’s not a sharp elbows, eat-what-you-kill environment.”
Is there a risk this could deter the kind of big-hitting corporate and finance partners the firm needs to challenge the elite?
“It might to a degree,” concedes Harris. “But I think a lot of people are attracted by our culture. If they’re not they wouldn’t be considered as possible recruits, so in practical terms it doesn’t
limit the pool of candidates.”
Another thing that might put them off is the remuneration.
In 2009 legacy firm Hogan & Hartson reported an average profit per equity partner (PEP) figure of $1.11m (£720,000). While comparisons may be invidious, Sullivan’s PEP was $2.94m, Simpson’s $2.41m and Davis Polk & Wardwell’s $2.1m.
Amid the integration of the teams in New York, partners have been engaged in a marketing blitz among clients as the firm looks to capitalise on the momentum created by the merger.
The New York offices of the legacy firms already had solid client rosters before the merger, including the likes of Bank of America, Merrill Lynch, Ford Motor Company and Sony.
New York-based global board member Marc Gottridge cites two recent mandates he says neither of the legacy firms would have been able to handle alone. It recently advised a major banking and asset management company on a series of distressed investments in the US.
The company is a legacy client of Lovells, but Gottridge claims it would not have won the mandate before the merger because it lacked the real estate and bank regulatory capabilities of Hogan & Hartson in the US.
Gottridge also cites the firm’s work advising HSBC, Morgan Stanley and RBC Capital Markets in connection with a $1.25bn debt offering by Landwirtschaftliche Rentenbank, involving lawyers based in the New York, London, Frankfurt and Berlin offices.
Gottridge also sits on the New York management team, which includes two partners from Lovells and four from Hogan & Hartson. The other members of the committee are Hogan & Hartson partners Dennis Tracey, David Dunn, Amy Bowerman Freed and Tracey Tiska, plus Lovells litigation partner Pieter Van Tol.
They are overseeing the attempt to build up the corporate and finance practices, which both have 31 lawyers. In finance the plan is to develop its lender-side work.
As Harris puts it, Hogan & Hartson historically had a more borrower-led practice, while for a number of years Lovells had made a conscious effort to grow the lender side of the practice, achieving significant progress.
“That practice isn’t mirrored in the US and we recognise the need to invest in New York so that it more closely resembles our finance practice in other key financial markets,” says Harris.
And like Gorrell, Harris is urging patience. “I think it’s too early to be measuring success in what’s only month four of the merger,” he stresses. “You don’t just flick a switch – these things take time.
“We have plans to develop the practice in a number of key areas and we never thought it would all be achieved in a matter of months. We’re encouraged by the progress we’ve made so far.”