Hogan & Hartson saw both revenue and profits drop in 2009. The firm’s revenue slid from $922.5 million to $864.5 million, a decrease of over 6%. Revenue per lawyer fell by 7.4% last year, going from $833,000 to $771,000. Hogan’s net compensation declined by 6% to $319 million. PPP also went down, slipping by 4.6% to $1.11 million.
Hogan chairman J. Warren Gorrell Jr. said, “It’s a simple story. 2008 was a strong year for Hogan & Hartson. But because the recession hit us much later than it hit other firms, our revenues slowed down in 2009.”
Gorrell said that the firm’s corporate practices, which make up about 30% of the firm’s business, were hit hard last year, particularly in the mergers & acquisitions and capital markets practices. “There was just less of that work last year globally,” he said.
In the past few months, Gorrell said, the firm has seen a “significant increase” in corporate work. “We have a number of transactions in progress that haven’t been completed yet. It’s been much busier lately,” he said.
Gorrell did note, however, that unlike some Washington firms which saw an uptick in regulatory work, Hogan remained flat in those practices.
Hogan posted a slight increase (1.26%) to its overall headcount, ticking upwards from 1,107 to 1,121. The firm lost five equity partners, dipping by 1.71% than a percent to 287. Hogan’s non-equity partnership ranks increased by about 4% to 210.
Noting that Hogan is in the process of putting together the largest transatlantic merger in recent years, Gorrell said the fluctuations in headcount were “immaterial.” When Hogan’s merger with U.K.-based Lovells is completed in May, the combined firm, Hogan Lovells, will boast more than 2,500 lawyers and estimated revenues of over $1.9 billion.
That said, Hogan did lose several lawyers to the Obama administration, including Christine Varney, who left the firm to become assistant attorney general for antitrust.
But in March, the firm added former Sen. John Warner (R-Va.). And in September, Hogan added legendary Washington defense lawyer Robert Bennett and longtime colleague Carl Rauh to its Washington office from Skadden, Arps, Slate, Meagher & Flom.
Hogan cut costs last year by tweaking its two-tier associate pay scale and moving first-years who weren't on track to bill at least 1,850 hours this year to the lower salary tier, $151,250. The firm also laid off 93 staff members across its 13 U.S. offices. Though the firm did not formally fire any lawyers, 30 senior associates were given four months notice that they needed to start looking for work elsewhere.
The firm’s pro bono hours saw a 8.7% increase in 2009. Gorrell attributed the increase to the decrease in demand for legal services from clients. “But I was glad to see that with less billable work, our lawyers picked up the slack on the pro bono side,” he said.
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