Hogan Lovells Sees $3 Billion Revenue Target Fast Approaching

Hogan Lovells is getting closer to its goal of $3 billion in annual revenue, according to CEO Miguel Zaldivar.

The global law firm saw a spike in demand, and clients paying their bills on time, in the first half of the year, Zaldivar said in an interview. Revenue ticked up 17% over Zaldivar’s first four years at the helm, reaching nearly $2.7 billion in 2023.

Revenue is up again so far in 2024, along with demand, said Zaldivar, who didn’t provide specific figures. Only seven US-headquartered law firms cracked the $3 billion revenue mark last year.

“I remain cautiously optimistic about the firm’s performance,” said Zaldivar, who in July started his second four-year term. “Our firm’s balanced practice offering, conservative approach to budgeting and our healthy balance sheet helps us to navigate times when there is economic turmoil.”

Stocks ticked back up Tuesday after the S&P 500 a day earlier fell the most in about two years and the tech-heavy Nasdaq 100 plunged as markets went into a downward spiral. A rough week for global markets has reignited fears of a recession.

Zaldivar pointed to a spike in collections in July, which came after economic challenges extended bill collection times for Hogan Lovells and other firms last year. The firm in July also saw the highest growth in demand in four years, according to Zaldivar.

“To me, that shows that the economy and the announcements that have been made about interest coming down have given our clients the confidence to hire the lawyers,” he said.

Zaldivar was unanimously re-elected as CEO in September, according to the firm. His new term runs through 2028. He set the $3 billion revenue target when he first took over the leadership role.

“We’re going to get to that $3 billion level ahead of what was in my mind,” Zaldivar said.

‘Global Powerhouse’

Hogan Lovells spent 14 years since the transatlantic merger between US firm Hogan & Hartson and UK’s Lovells demonstrating that it is a global and fully-integrated law firm, Zaldivar said.

“The brand now has evolved from being a regulatory powerhouse to being a global powerhouse, so what I want to do is expand on that success,” he said.

Hogan Lovells’ work in the life sciences, financial services, technology, energy and the automotive industries accounted about 90% of its revenue last year, he said.

The US side of the firm is a $1.2 billion business with 1,000 lawyers, but a heavy concentration of that talent is in Washington, the hometown of its predecessor firm Hogan & Hartson, Zaldivar said.

Growth in New York continues to be a key driver, he said. The firm has already started to make good on its plans in the Big Apple, picking up a 70-lawyer team from now-defunct Stroock & Stroock & Lavan that included 28 partners late last year.

Miguel Zaldivar

Photo: Hogan Lovells

“Instead of trying to open more offices, like some firms have done, I think that making the ones we have stronger is the way to go,” Zaldivar said.

Texas, in particular the energy sector in Houston, is another target, as is California, he said. Abroad, London remains a key office for growth for the firm, along with its offices in France, Spain and Italy.

Hogan Lovells is also planning on investing in Singapore, Indonesia, and Vietnam. Exits by other law firms from mainland China have created an opportunity for the firm, which Zaldivar said remains committed the region.

“We’re not being distracted by the geopolitical winds,” he said. “We’re playing the long term game there.”

Solid Footing

Zaldivar’s new term starts with the firm having no retention commitments, no long-term or short-term debt and no unfunded pension obligations, he said.

This has allowed Hogan Lovells to invest in talent, he said, even as a recruiting war has some law firms paying in ten-figure sums for top rainmakers.

The firm recently hired two life sciences partners from Foley Hoag in Boston. It also picked up Jason Downs, the former chief deputy attorney general for the District of Columbia, from Brownstein Hyatt Farber Schreck in Washington and added a six-lawyer energy team in Paris.

“We don’t have internal class and personalities and people that are the big names that can basically get their way in the firm,” Zaldivar said. “There are some institutions that are willing to compromise that for money, and we’re not.”

Hogan Lovells has a merit based compensation system for partners and, unlike some firms, a 15% bonus pool.

“Some firms give out at the end of the year nominal bonuses—we can give a partner a $5 million bonus,” Zaldivar said. “With that flexibility in the comp, we’ve been able to attract the talent that we want.”