JUNE 2019

HOGAN LOVELLS 2018 ANNUAL REVIEW ALM LEGAL INTELLIGENCE ANNUAL REPORT Executive Summary

• Hogan Lovells’ strategy is to ensure consistent and profitable growth through the utilization of an industry sector approach, maintaining depth of presence in client critical markets and continued investment in non-lawyer services — Ranked 7th in the 2019 Am Law 100, posting $2.1B in FY2018 revenue with 2,636 attorneys globally — The firm’s Global Regulatory and Corporate practices stand out in 2018, achieving significant growth related to global privacy issues and cross-border M&A 1 — Hogan grew headcount in continental , but consolidated its presence in Latin America through office closures — Lateral hiring strategy has focused on strengthening capability in Boston, New York, and Silicon Valley — To diversify its client offering and create additional revenue streams, the firm has launched several non-lawyer services including Cybersecurity Risk Management and Managed Legal Services 3 • Hogan Lovells’ posted strong 2018 revenue growth of 4% but this was offset by just 1% profit growth — Profits Per Equity Partner (PEP) climbed 8% to $1.38 million, outpacing its five-year growth average — To help drive PEP growth the firm reduced its equity by 6%, while also increasing its overall leverage ratio by 6% — Revenue Per Lawyer (RPL) grew 6% to $804,000 — 28% of the firm’s billable hours last year were derived from non-attorney timekeepers — The firm outperformed two of its ALM Selected Peers* in both revenue and Profit Per Lawyer (PPL) growth • Hogan Lovells has a higher percentage of female and minority attorneys in comparison to its peer group • Going forward, ALM Intelligence expects Hogan Lovells to strengthen its global footprint in both key and emerging markets. This includes: — Strengthening its New York and London corporate offering through targeted lateral hiring in response to an uptick in cross-border transactions1 — Adding to its corporate teams in Northern California, Houston and Boston following growing client demand for corporate services in key sectors, including technology, energy, and life sciences 1 — Expanding its presence in both fast-growing markets and smaller office locations to meet increasing client demand

* ALM Selected Peers = Baker & McKenzie; DLA Piper; ; . See methodology section for peer group criteria. See bibliography for links to underlying sources

2 Firm Report HOGAN LOVELLS ANNUAL REPORT Key Statistics: Hogan Lovells

Hogan Lovells is ranked 7th in the Am Law 100 with 2,636 lawyers in 21 countries and 12 US states. In 2018, the firm’s Profit Per Equity Partner outpaced its five-year average

Year-on-Year Average Annual Growth 2018 Growth 2014 -2018 2017 - 2018

Revenue ($M) $2,119 4% 4%

Profit ($M) $722 1% 4%

Profit Per Equity Partner ($K) $1,381 8% 3%

Total Lawyers 2,636 -2% 3%

Equity Partners 523 -6% 1%

Non-Equity Partners 280 0% 0%

Leverage 4.0 6% 3% Metrics where the firm’s year-on-year performance outpaced its five-year performance

3 Firm Report HOGAN LOVELLS ANNUAL REPORT Hogan Lovells Global Footprint

Hogan Lovells has offices in 21 countries. In 2018, the firm increased headcount 5% in continental Europe, specifically in the firm’s Milan (26%), Rome (17%), (13%), and Paris (8%) offices. The firm closed their office in Caracas and consolidated their Rio de Janeiro office into their Sao Paulo office 12

Lawyers By Location Lawyers by Global Region Year over Year 5 Year Average For Hogan Lovells, 2019 Hogan Lovells, 2018 2017 – 2018 2014 – 2018

USA 948 -1% 2%

Europe 856 5% 4%

London 492 -9% -1%

Asia Pacific 230 -6% 5%

Latin and South 110 America -11% 23%

4 Firm Report HOGAN LOVELLS ANNUAL REPORT Geographic Growth

Hogan Lovells has seen differing levels of headcount growth across its largest offices. The firm has grown its smaller offices in Boston, Silicon Valley and Philadelphia through lateral hiring and acquisitions

Lawyers by Metro Area Geographic Growth Strategy Hogan Lovells: Largest five office changes over five years For Hogan Lovells

-3% • Over the past five years, the firm's largest offices have seen differing levels of +7% 507 492 headcount growth 453 424 • The firm has seen headcount decline in London and New York while growing their Washington, Paris and Munich offices • The firm focused US growth on markets such as Boston, where the firm acquired -22% +32% a 25-lawyer litigation boutique to bolster its healthcare and life sciences 197 +42% 4 158 153 practices 120 131 92 • The firm continues to expand in Silicon Valley as part of a focus on life sciences together with the technology and consumer sectors 5 2019 2015 • The firm has increased headcount in Philadelphia following targeted growth London Washington Paris New York Munich again driven by life sciences, and in order to better meet client needs 6

5 Firm Report HOGAN LOVELLS ANNUAL REPORT Hogan Lovells Lateral Hiring

Hogan Lovells is the steadiest among their peers in terms of net growth. Between 2017 and 2019, the firm added 61 partners, offsetting 61 departures. The firm’s lateral hiring has focused on strengthening offerings in Boston, New York, London and Silicon Valley

Lateral Partner Hires and Departures For Hogan Lovells Annual Report and ALM Selected Peers, 2017 - 2019

Depatures Hires

129 61 57 43 31 -61 -58 -88 -113 -152

Hogan Lovells Baker McKenzie DLA Piper Norton Rose Fulbright Squire Patton Boggs

Note: Lateral hiring data is from the period January 2017 through February 2019

6 Firm Report HOGAN LOVELLS ANNUAL REPORT 2018 Practice Area Growth

Hogan Lovells grew headcount in bankruptcy, corporate and life sciences through lateral hiring and acquisitions

Practice Area Attorney Growth By Region Hogan Lovells’ Fastest Growing Practice Areas, 2018 • Hogan Lovells has been looking to expand its M&A capability since 10%+ YoY Growth 5-10% YoY Growth its post-2010 merger.13 This strategy can be reflected through the

• Bankruptcy • Admiralty and Aviation growth of its M&A and International Cross-border practices in the USA • Education • Life Sciences US and Europe, respectively • M&A • Litigation • In the U.S., Bankruptcy was among the firm’s fastest growing • International and Cross-Border • Litigation practices, highlighted by the addition of a three-partner group Europe • Bankruptcy Antitrust • Energy 7 • Life Sciences • Admiralty and Aviation from in Los Angeles

• The firm bolstered its life sciences and healthcare capabilities • Bankruptcy Rest of through a merger with Boston-based boutique firm Collora4, in World • Banking 8 • Corporate addition to key lateral hires in New York

7 Firm Report HOGAN LOVELLS ANNUAL REPORT Ancillary Businesses and ASP collaboration

Hogan Lovells has launched several ancillary businesses and entered into collaborations with non-law firms, enabling the firm to monetize client-facing solutions

Hogan Lovells Ancillary Business’ Collaboration With Alternative Service Providers For Hogan Lovells For Hogan Lovells

• In 2017, Hogan Lovells launched a consulting business for its financial • In 2018 Hogan Lovells’ announced a collaboration with the alternative services clients in the U.K focused on regulatory, due diligence and service provider Elevate 11 investigations work 9 • The partnership, which will be piloted in the UK and potentially rolled • Also in 2017, the firm established an in-house communications group to out to the US and later this year, will give Hogan Lovells access to work closely with the firm’s white-collar and regulatory practices 10 Elevate’s 1,500-strong pool of lawyers during times of high demand 11

• The firm’s other non-lawyer services include cybersecurity risk • The partnership complements Hogan Lovells’ additional legal services management, global transfer pricing and managed legal services 3 offerings including document automation, legal project management, and lower-cost services from their Birmingham, UK shared services center 11

8 Firm Report HOGAN LOVELLS ANNUAL REPORT Performance in Key Financial Metrics

Hogan Lovells grew total revenue 4% and PEP 8% in 2018, following a strong 2017 in which the firm broke the $2 billion revenue threshold for the first time Likely Drivers of Revenue Growth & Profitability • Nearly 70% of billings are from clients who engage Hogan in 3+ countries • High percentage of billable hours (28%) from non-attorney Hogan Hogan ALM Selected Peers Growth in Financial Key Metrics timekeepers Year over Year Average Annual Average Annual • Strategic focus on client pricing led by chief operating officer and Growth Growth For Hogan Lovells 14 Growth global director of strategic pricing 2017 – 2018 2014 – 2018 2014 – 2018 $4,000 $1,600 Profit Per Equity Partner ($k) $1,381 $3,500 $1,400 $1,217 8% 3% 6% $3,000 $1,200 $2,500 Revenue ($B) Profit ($m) $1,000 $2,119 $1,926 $2,036 34% 35% $1,821 4% 4% 3% $2,000 $1,780 Margin$800 Margin $1,500 $600 $1,000 $400 $620 $667 $679 $713 $722 $500 $200 1% 4% 2% $0 $0 2014 2015 2016 2017 2018

9 Firm Report HOGAN LOVELLS ANNUAL REPORT 2018 Revenue and PPL Growth

Hogan Lovells grew its revenue and PPL faster than both Norton Rose Fulbright and Squire Patton Boggs. The firm achieved the same level of PPL growth as DLA Piper but was outperformed in revenue growth, while the firm trails Baker McKenzie in both metrics

Growth in Revenue and Profit Per Lawyer For Hogan Lovells and ALM Selected Peers Key Grew Profitability / Grew Revenue 15% Baker McKenzie $1 Billion in Squire Patton Boggs Annual Revenue 10% Hogan Lovells Norton Rose Fulbright 5% 2018)

– 0% DLA Piper -5% (2017 YoY PPL Growth Growth PPL YoY -10%

-15% -10% -5% 0% 5% 10%

YoY Revenue Growth (2017 – 2018)

10 Firm Report HOGAN LOVELLS ANNUAL REPORT 2017-2018 Performance Versus Peers

Hogan Lovells generates the highest PPL of its peer group, driven through high RPL. The peer-best RPL offset a relatively high CPL, possibly driven by new office openings, lateral hiring activity in high-value markets and increased associate compensation

Norton Rose Squire Patton Hogan Lovells Baker McKenzie DLA Piper Fulbright Boggs

2018 Financials •Revenue ($M) 2,119 2,900 2,836 1,969 1,035 •Operating Profit ($M) 722 981 751 618 173 Best performance in metric among peer group 2018 Operating Metrics •Revenue Per Lawyer ($K) 804 614 766 583 691 •Cost Per Lawyer ($K) 530 407 563 400 575 •Profit Per Lawyer ($K) 274 208 203 183 116 •Profit Per Partner ($K) 1,381 1,443 1,874 907 1,027 •Total Lawyers 2,636 4,720 3,702 3,376 1,497

11 Firm Report HOGAN LOVELLS ANNUAL REPORT Financial Analysis: One Year Profit Tree

Hogan Lovells’ 2018 PEP growth was comparable to its peer group average. The firm achieved lower PPL growth than its peers due to significantly higher CPL. The firm increased leverage ratios at a higher rate that its peers, helping to drive its overall PEP

Profit Tree Analysis: Growth Over One Year Year-on-year change in key metrics for Hogan Lovells and ALM Selected Peers Average, 2017 - 2018

Key

Hogan Lovells 6% Y-o-Y Growth ’17 – ‘18 Revenue Per Lawyer 3% 5% ALM Selected Peers Growth rate over PPL Y-o-Y Growth ’17 – ‘18 period 4% 8% Cost Per Lawyer 5% Profit Per Equity 8% Partner 8% 5% Associate to 6% 5% Equity Partner Ratio Leverage 5% 6% Non-Equity to 4% Equity Partner Ratio

12 Firm Report HOGAN LOVELLS ANNUAL REPORT Gender & Minority Diversity

Hogan Lovells has a higher percentage of female and minority attorneys in comparison to its peer group but performs less favorably when the percentage of female partners is compared

Percentage of Female and Minority Lawyers For Hogan Lovells and Selected Peers Hogan Lovells Baker McKenzie DLA Piper Norton Rose Fulbright Squire Patton Boggs 44% 41% 40% 38% 38%

26% 23% 24% 21% 19% 20% 19% 17% 18% 17%

% Female Attorneys % Female Partners % Minority Attorneys

13 Firm Report HOGAN LOVELLS ANNUAL REPORT Definitions

Definitions and Methodology

• Gross Revenue is fees for legal services. It does not include disbursements or income from non-legal ancillary businesses. In all cases, the revenue and profit figures listed are for the firm's most recently completed fiscal year. Most Am Law firms are on a calendar fiscal year. • Net income is compensation paid to equity partners. • Equity Partners are those who file a Schedule K-1 tax form and receive no more than half their compensation on a fixed-income basis. • Non-equity Partners are those who receive more than half their compensation on a fixed basis. • Revenue per lawyer (RPL) is calculated by dividing the gross revenue by the number of lawyers and rounded to the nearest $1,000. • Cost per lawyer (RPL) is calculated by dividing the total costs by the number of lawyers and rounded to the nearest $1,000. • Profit per lawyer (PPL) is calculated by dividing the total net income by the number of lawyers and rounded to the nearest $1,000. • Profits per equity partner (PPP) is calculated by dividing net operating income by number of equity partners and rounded to the nearest $1,000. • Leverage is the ratio of all lawyers (minus equity partners) to equity partners • Associate leverage is the ratio of all associates to equity partners • Non-equity leverage is the ratio of all non-equity partners to equity partners • ALM Selected Peers: Most law firms have a wide range of competitors which compete with the firm in specific geographies and/or practice areas. ALM’s Selected Peer Group is designed to identify the firm-wide peers. ALM selects peers by weighing various factors including the firm’s size, organizational structure, geographic footprint, and practice area specialty. Firms can utilize the data provided in ALM Intelligence’s Legal Compass to benchmark themselves against specific firms or peer groups.

14 Firm Report HOGAN LOVELLS ANNUAL REPORT Bibliography 1 Revenue, Profits on the Rise for Transatlantic Hogan Lovells (25 February 2019) https://www.law.com/international/2019/02/25/revenue-profits-on-the-rise-for-transatlantic-hogan-lovells-396-12975/

2 Hogan Lovells financial results for calendar year 2018 (25 February 2019) https://www.hoganlovells.com/en/news/hogan-lovells-financial-results-for-calendar-year-2018

3 Hogan Lovells Solutions https://www.hoganlovells.com/en/capabilities/practice-category-group/solutions

4 Hogan Lovells Heads to Boston After Local Merger (15 June 2017) https://www.law.com/americanlawyer/sites/americanlawyer/2017/06/15/hogan-lovells-heads-to-boston-after-local-merger/

5 Hogan Lovells Adds Prominent Northern California Litigator Christopher Cox to its Silicon Valley Office (16 April 2019) https://www.hoganlovells.com/en/news/hogan-lovells-adds-prominent-northern-california-litigator-christopher-cox-to-its-silicon-valley-office

6 Hogan Lovells' New Office Leader Eyes Growth in 'Steady' Phila. Market (14 January 2018) https://www.law.com/thelegalintelligencer/2019/01/14/hogan-lovells-new-office-leader-eyes-growth-in-steady-phila-market/

7 Hogan Lovells Snags Restructuring Leader From Jones Day (23 April 2018) https://www.law.com/americanlawyer/2018/04/23/hogan-lovells-snags-restructuring-group-from-jones-day/

8 Hogan Lovells Adds Prominent Life Sciences IP Team to New York Office (25 February 2019) https://www.hoganlovells.com/en/news/hogan-lovells-adds-prominent-life-sciences-ip-team-to-new-york-office

9 Hogan Lovells Launches Consulting Arm After PwC Hire (05 July 2017) https://www.law.com/americanlawyer/sites/americanlawyer/2017/07/05/hogan-lovells-launches-consulting-arm-after-pwc-hire/

10 Hogan Lovells Expands into Public Relations Field (01 February 2017) https://www.law.com/nationallawjournal/almID/1202778186161/hogan-lovells-expands-into-public-relations-field/

11 Hogan Lovells Partners With Elevate to Offer Flexible Lawyering Service (15 February 2018) https://www.law.com/americanlawyer/2018/02/15/hogan-lovells-partners-with-elevate-to-offer-flexible-lawyering-service/

12 Hogan Lovells to Close Rio Office, Consolidate Brazil Practice in Sao Paulo (25 July 2018) https://www.law.com/international/2018/07/25/hogan-lovells-to-close-rio-office-as-firm-concentrates-brazil-focus-on-sao-paulo-396-5144/

13 What Hogan Lovells Did Right (and Wrong) in Its Founding Tie-Up (23 April 2017) https://www.law.com/international/2018/07/25/hogan-lovells-to-close-rio-office-as-firm-concentrates-brazil-focus-on-sao-paulo-396-5144/

14 New Pricing Strategies Drive Revenue Gains at Hogan Lovells (26 January 2018) https://www.law.com/americanlawyer/sites/americanlawyer/2018/01/26/new-pricing-strategies-drive-revenue-gains-at-hogan-lovells/

15 Firm Report Size of Bubbles Colors HOGAN LOVELLS $3 Billion in Highly Profitable Global Firms Annual Revenue ANNUAL REPORT Hogan Lovells Potential Peers Verein Firms Asian Firms European Firms Key Financial and Headcount Metrics Transatlantic Firms For Hogan Lovells and the Firm’s Peer Group, 2018 A group of highly profitable firms UK Firms which are less global than DLA Piper $3,500 Latham & Watkins A group of Verein firms that are similar in profitability, $3,000 White & Case Cleary Allen & Overy although ranging in global coverage $2,500 Freshfields

$2,000 Baker McKenzie Mayer Brown DLA Piper $1,500 Reed Smith Jones Day KWM Squire Hogan Lovells

Profit Per Equity Partner ($k) Partner Equity Per Profit $1,000 K&L Gates Norton Rose Fulbright Eversheds CMS $500 Ashurst Gowling Bird & Bird Yingke $0 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Lawyers Outside of Home Country

16 Firm Report HOGAN LOVELLS ANNUAL REPORT Hogan Lovells Peer Group

Am Law Verein firms were selected as a peer group for comparison due to their common structure, geographic coverage, and similar financials

Key Financial and Headcount Metrics For Hogan Lovells and the Firm’s Peer Group, 2018

Percentage Revenue RPL CPL PPL PPP Total Total Leverage of Lawyers $M ($k) ($k) ($k) ($k) Lawyers Offices In USA

Hogan Lovells 2,119 804 530 274 1,381 2,636 4.0 46 36%

Baker McKenzie 2,900 614 407 208 1,443 4,720 5.9 78 16%

DLA Piper 2,836 766 563 203 1,874 3,702 8.2 75 35%

Norton Rose Fulbright 1,969 583 400 183 907 3,376 4.0 58 23%

Squire Patton Boggs 1,035 691 575 116 1,027 1,497 7.9 47 43%

17 Firm Report