Hogan Lovells’ 2012 profits hit by cost of surplus office space

Hogan Lovells’ consolidated LLP accounts for the UK, Continental Europe, Asia and the Middle East showed a fall in profits due to increased operating expenses in the last financial year.

David Harris
David Harris

The firm’s consolidated UK figures confirmed a 1.5 per cent increase in turnover from £582m in 2010/11 to £591m in 2011/12.

However, operating expenses rose from £122m to £145m, meaning profit before tax fell by 7 per cent from £211m to £197m.

The firm, which has no net debt, said the rise in operating costs was partly due to including future costs on surplus office space in the accounts.

It left profit for the year to be distributed to approximately 215 members at £164m, down from £184m in 2010/11.

Net cash rose from £46m to £62m, with staff costs staying relatively flat at £240m.

Hogan Lovells’ LLP members drew £134m in the financial year, compared to £116m in 2010/11.

The accounts cover the international LLP, which does not include the Americas. The firm posted global revenue figures for the first time in 2012, showing a total turnover of £1.04bn (19 October 2012).

A spokesperson said: “We have achieved these results in a period of significant economic uncertainty.

“To have delivered a broadly flat performance in this market is a good reflection of our global capability, the diversity of our practice and the benefits from the combination [of legacy Lovells and Hogan & Hartson].

“We’ve continued to benefit from our strengths across our wide range of practice areas as well as our capabilities and in-depth knowledge across a number of industry sectors.”