Hogan Lovells Looks Back, HSF Looks Forward
It has been a busy week for law firm leaders in the U.K.
Eversheds Sutherland’s international arm has appointed a new chair, Mishcon de Reya has appointed several board directors as it prepares for an IPO, Allen & Overy and Simmons & Simmons have opened offices in the U.S. and Addleshaw Goddard is eyeing a launch in Saudi Arabia.
But perhaps the most interesting developments have come at Hogan Lovells and Herbert Smith Freehills.
Hogan Lovells joins several in planning for its next London base, and the process has taken some time. Last year, some people with knowledge of the situation said the firm was considering a move nearer to Bank. But it has stuck to Holborn Viaduct, opting for new premises over the road from its current flagship home at Atlantic House. CMS is advising it on the process.
The firm’s CEO Miguel Zadivar was unequivocal in his take on its financial performance last year, telling Law.com that the firm “killed it”. With hikes across PEP, RPL and other key metrics, the comment is probably fair. Solid financial results are the current trend, as other firms continue to surf a post-COVID wave of work.
But Hogan Lovells’ week wasn’t all rosy, with the outfit the latest to crack down on alleged lawyer misdemeanors. It has suspended one of its London lawyers over allegations of misconduct which took place off the firm’s property. Orrick, Herrington & Sutcliffe also issued a swift statement of its own to acknowledge a claim made by a female associate in its Munich office that she was groped by a German partner.
These days, firms know they have little choice but to quickly acknowledge any alleged transgressions and be shown to be taking action, or risk being accused of a murky culture and cover up tactics. They have learned from the experiences of Baker McKenzie and other firms in recent years.
HSF CEO Justin D’Agostino, meanwhile, is planning for the future as he hit the halfway mark through his leadership term this week. D’Agostino has rolled out ‘Ambition 2025’ to the firm’s global ranks, targeting an increase in Asia revenue and specific sector focuses, among other items.
The firm will conduct a survey of all its people to garner an Employee Value Proposition, as D’Agostino stated that he “wouldn’t be comfortable” not being able to articulate “what drives the 5,000 people working at our firm.”
As the industry grapples with wholesale cultural issues in light of remote working and the other knock-on effects of the pandemic, anything that looks to understand what really makes their people tick is definitely a worthy investment in the future.
Some Logical Tech
Technology can sometimes be overrated. There is one legal commentator who has been making the prediction that tech will soon make lawyers obsolete for about 30 years.
What is true, however, is that tech can solve problems and make life easier. At Slaughter and May the firm is used to trailing a new piece of legal tech each year, but this year has taken a different approach. It surveyed its lawyers to ask what challenges they faced that could be tackled using technology.
The result was that the firm is piloting four tech solutions. This is interesting because the solutions they chose give an insight into the problems they faced. And while Slaughters might not often be thought of as a tech pioneer the approach does seem sensible.
At the more extreme end of tech solutions, Gunnercooke has started accepting payment for its services in the form of cryptocurrencies such as bitcoin or ether.
The firm even said it had already received its first payment using the new option, with one client recently paying for legal consultancy services using Ethereum.
Perhaps this is an overrated monetary system or perhaps it is the future. Either way, the firm is certainly at the forefront of such moves in the U.K.
LLPs Are (Sometimes) Worth the Read
Journalists aren’t accountants. Sifting through firms’ limited liability accounts can often be a drag, though this week Freshfields Bruckhaus Deringer’s latest set revealed an interesting nugget.
In a standard move for many firms reporting their financial breakdown for the 2020-21 year, the firm touched on its experience of the COVID-19 pandemic in a statement accompanying the report.
It said: “While COVID-19 has not had a significant impact on the firm to date, it remains possible that the pandemic could impact demand for our services in the short term. Liquidity pressure on our clients could also have an adverse impact on the business. “However, the firm has considerable financial resources together with a diverse range of clients and across different geographic locations and sectors. The firm also has considerable discretion over the timing of any cash distributions to partners.”
That last line is telling. Recent years have shown us many examples of firms utilising their partners’ capital commitments: Hogan Lovells, Allen & Overy and (whisper it) King & Wood Mallesons have all called on their partners to pump extra money into the business as either offensive or defensive moves. Many firms delayed profit distributions as the world waited to see what the impact of COVID-19 would be.
These LLP accounts refer to the 2020-21 financial year, when the outlook of the industry was far murkier and Freshfields’ statement doesn’t suggest that the option will be utilised any time soon.
Still, it is a reminder that despite these profitable times we are currently in, future distributions can always go down as well as up.