Associate Bonus Watch: Unhappiness at Hogan Lovells?

Last week, Hogan Lovells announced its associate bonuses. It’s the first bonus season for the firm since the merger of Hogan & Hartson and Lovells. Unfortunately for some associates, the transatlantic deal apparently did not pay off for them at bonus time.

The memos are individualized, but the associates who have reached out to Above the Law are not happy. Here’s one tipster’s report:

Most people with whom I’ve spoken received $2500-$5000 less than the Cravath-model for billing around 2150 (our hours requirement is 1950). This is true no matter the class year.

A number of associates left the office as soon as the memos came out because they were so disgusted. I predict a mass exodus of associates leaving HoLove this coming year, because a lot of people have been pissed about the hours anyway and these bonuses are just insulting.

But according to a Hogan Lovells spokesperson, the HoLove bonuses matched the market. So why are associates upset?

(Please note that we’ve added some UPDATES after the jump.)

A spokesperson for Hogan Lovells gave Above the Law the following statement:

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We take a market by market approach, matching top Cravath levels in NY and LA for associates meeting performance expectations. Bonuses levels in other markets vary, with the higher performing associates receiving bonuses at or above the NY and LA levels.

We’ve gotten a look at the bonus memo going around the HoLove D.C. office, and they are most definitely not on the Cravath scale. As far as we can tell, most of the disgruntled Hogan associates are in the D.C. office. As this D.C. associate explains, the merger with Lovells raised expectations at the firm:

HoganLovells bonuses went out on Wednesday. They are crappy as usual, despite the fact that we are now supposedly a preeminent international law firm due to the merger with Lovells. Associates are generally pissed about the bonuses.

Hogan associates in New York and L.A. have not been emailing us complaining about their bonuses, so perhaps they are more content.

It’s not unusual for the D.C. market to be a little lower than the New York market. Maybe all that conglomeration of federal power in D.C. made people forget that for a second?

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UPDATE (1:45 PM): One unhappy Hoganite explains:

The disgust is directed more at the bonus structure than the bonus amount. Those who billed 2,200 hours but received just $5,000 more than those billing 1,950 received a marginal payout of $20/hour. HoLove associates aren’t going anywhere in this lateral market, but they might start quietly dodging work. HoLove has clearly discouraged billing above 1,950.

Also, HoLove’s individualized memos (contrary to past practice of providing Cravath-style disclosure about bonus ranges and averages) reflect a deeper ill: without candor and transparency, trust fades.

Maintaining trust is, of course, one of the central challenges faced by any compensation system that isn’t pure lockstep.

UPDATE (4:15 PM): From a New York-based source:

Bonuses were Cravath-scale for those who made 2k hours. The shite part is that former Lovells people only got half-Cravath bonuses, but the former Hogan people got full Cravath. Nice way to tell the Lovells people who is in charge.

On the the upside, there was a true-up bonus for those who made 1950, as both firms froze salaries in 2009, and people have been restored to their proper class year.

Morale? Not great. People are looking, but it’s not a disaster.

UPDATE (4:37 PM): Another unhappy camper:

As a Hogan first year (2009 grad), I can confirm that bonuses are well off scale. I exceeded my hours by 100+ and received $5,000. Feel like a chump.

Earlier: Prior ATL coverage of associate bonuses


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