Hogan & Hartson, Lovells partners approve merger
Wednesday, December 16, 2009
Partners at the Washington-based Hogan & Hartson law firm said Tuesday that they have approved a merger with London-based Lovells in a deal that would create one of the world's largest law firms, with $1.8 billion in revenue and 2,500 lawyers in 40 offices.
The new firm will be called Hogan Lovells. The merger, which is set to go into effect in May pending regulatory clearances, comes at a time when many law firms across the country are losing business because of the recession. Although Hogan & Hartson laid off 90 support staff members worldwide in April, the firm said the merger is aimed not at reducing costs but at positioning it as a global leader in mergers and acquisitions, intellectual property, finance, regulatory, litigation, and other areas.
"Combining two high-end leading firms with a greater reach is a compelling proposition for our clients," J. Warren Gorrell Jr., chairman of Hogan & Hartson, said in an interview. The firm's clients include GE, IBM, Barclays and Ford.
Gorrell is slated to share the chief executive role of the new transatlantic powerhouse with David Harris, managing partner at Lovells.
The new partnership would be a merger of equals, officials said, run by a board comprising representatives of both firms. The firm would not have a designated headquarters but would maintain operating centers in London and Washington. No staff reductions are planned, officials said.
Merging "allows them to take advantage of Lovells's strength in the U.K., Asia and Europe and Hogan's strength in the United States," said Peter Zeughauser, chairman of the Zeughauser Group, which is advising Lovells in the deal.
They will have "significant penetration in all the world's major markets," Zeughauser added.
The Washington area has a higher concentration of people working in the legal profession than any other metropolitan region in the nation, with more than 60,000 employed in the sector.
Profits per partner at the biggest U.S. law firms declined last year, the first drop since 1991, by 4.3 percent, according to a survey by American Lawyer. Legal experts said they expect more declines this year.
Officials said one of the biggest logistical adjustments would be combining their compensation systems. Hogan compensates partners based in part on the revenue they generate for the firm. Lovells pays partners based largely on a step system that recognizes their years of service.
Gorrell said the new firm will use the Hogan system.