Stephen Immelt. (Photo: Diego M. Radzinschi/ALM)

Hogan Lovells posted its seventh consecutive year of growth in 2019, as total global revenue climbed 6% to $2.25 billion.

Profits per equity partner grew 9.1% to $1.51 million, while revenue per lawyer increased by $5.7% to $850,000.

"The good thing about 2019 is that we saw pretty balanced growth," said Washington, D.C.-based CEO Stephen Immelt. "It was not driven by any one sector or one huge matter."

The Americas represented approximately half of the firm's total billings in the previous year. The U.K. and Continental Europe together accounted for another 43%, while Asia Pacific and the Middle East provided the remaining 7%. Revenue from London and the U.K. grew over 10% to £332.6 million.

Deal flow recovered in the second half of 2019 after a slow start to the year, according to Immelt, while the firm's litigation, regulatory and IP practices—less tied to market fluctuations—performed impressively over the full year.

Immelt, who is stepping down from his position in July after six years at the helm, has stressed repeatedly that the firm has been prioritizing sector-based expertise. Viewed along those lines, the automotive industry and financial institutions were standouts.

For the former, the rise of connected cars, electric vehicles and other advancements is fueling dealmaking to license or buy new technologies, while manufacturers are facing increased regulatory scrutiny along with a continued need for financing. Financial institutions, meanwhile, have been facing uncertainty not just from Brexit but the phasing out of the Libor benchmark for inter-bank lending.

Hogan Lovells' head count remained largely steady in 2019, with over 2,600 attorneys worldwide. Its number of equity partners ticked slightly upward to 536, expanding by 2.5%, with part of the growth coming from changes in South Africa. There, the firm unwound a six-year-old affiliation with a local firm and launched a new fully integrated office with five partners.

The firm also launched a legal services center in Berlin in June, supporting white-collar, investigations and fraud work, and a document review center in Phoenix in December, in conjunction with law company Elevate.

"It's price competitive," said London-based deputy CEO David Hudd, who is also stepping down at the end of June.  "That is going to continue to be an important part of our evolution, in terms of how work is going to be delivered."

The firm did raise rates more than 3% in 2019, at a level that Immelt said was consistent with the rest of the market, and further increases are in the works for this year.

"The good news from our perspective is that we were able to capture a good percentage of the rates we introduced in 2019," he said. "It's not automatic. Clients need to feel that [these are] consistent with peer firms and that they're getting value at the end of the day."

While the firm's finance clients in London have been using alternative financial arrangements for two decades, the appetite for these is growing in practices like litigation and in regions like the U.S. But even with a movement towards fixed fees, caps and hard budgets, Immelt recognizes some limits in what will change

"I personally think that sometimes the clients are the ones who are more reluctant to move away from hourly-rate billing," he said. 

Looking ahead to the rest of 2020, both Immelt and Hudd said they are comfortable with the firm's global footprint and do not expect to expand into any new markets. But they are eyeing growth in New York, California and London.

And as the two prepare to move on from leadership, they had several thoughts on how they would advise their successors: incoming CEO Miguel Zaldivar, a project finance specialist who's currently based in Hong Kong, and deputy CEO Michael Davison, a London-based international arbitration attorney.

"This is a dynamic and unpredictable business. Be ready for things you can't envisage," said Hudd, pointing to Brexit, the election of Donald Trump and other signs of a global turn towards populism that would have been hard to detect when they started in their roles in the middle of 2014. 

"But the advantage of a firm like this is that we're broadly based, and not overly dependent on one region," Hudd added. "We're widely hedged, and should keep that hedging in place.

For Immelt, it's valuable to constantly look for new opportunities in the world. He pointed to a decision 15 years ago, while at predecessor firm Hogan & Hartson, to explore hiring an expert in privacy work.

"We now have 200 lawyers who are dealing with privacy," he said. "It's hard sometimes when you've got a lot of work on your desk. But you need to look around and see what the next opportunity is going to be."

The 2019 financial figures reported in this story are preliminary. ALM will report finalized data for the Am Law 200 in The American Lawyer's May and June issues.

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