Every day that major law firms do not announce spring bonuses makes them look like below-market, “non-peer” institutions. It has become very clear that firms claiming to pay market compensation need to be providing spring bonuses.
The latest firm to yield to market realities is Hogan Lovells. The relatively new Ho-Love, formed by the merger of Hogan & Hartson and Lovells, showed love to its hos on Friday. The firm matched the Cravath scale for spring bonuses.
You can read the full memo below. But you should also listen to how surprised and happy Ho-Love associates are about the bonuses. Hogan associates are like bizzaro Sidley associates….
One Hogan associate seemed positively giddy about spring bonuses:
Associates are completely shocked. No one expected it. I thought hell would freeze over before Hogan ever paid spring bonuses, no matter what the market was doing…
Associates are now wondering if these spring bonuses levels set a new floor (albeit still quite low) for next year’s year end bonuses.
Slow down, buddy. If spring bonuses have taught us anything, it’s that associate bonuses have little to do with profitability at most Biglaw firms. Firms that are paying spring bonuses now could have paid the money as a part of the 2010 year-end bonus. They didn’t then because Cravath said they didn’t have to. Then Cravath said they had to and, reluctantly, firms are getting the message that they need to pay spring bonuses to remain competitive in the market for talent.
The “floor” for next year will be, again, whatever Cravath and/or Sullivan & Cromwell say the floor is. And then most Biglaw firms will follow suit.
Or they’ll end up like Sidley Austin — a firm that is going to have to follow suit eventually but instead of just biting the bullet and getting it done apparently wants to wallow in weeks of derision while its associates are underpaid and made fun of by their peers who do the same work for more generous compensation.
Congrats to Hogan Lovells associates. The full memo appears below.
HOGAN LOVELLS — MEMORANDUM — SPRING BONUSES
We are pleased to announce that U.S.-based associates who are meeting
both our quality of performance and our productivity expectations will
receive special spring bonuses in the following amounts:
1,950 or 2,000 (NY & LA) Track — 1,800 Track
Class of 2010: $2,500 — $2,000
Class of 2009: $7,500 — $6,000
Class of 2008: $10,000 — $7,500
Class of 2007: $15,000 — $11,500
Class of 2006 and more senior: $20,000 — $15,000
Bonuses will be paid on April 29, 2011 to U.S. associates employed by us on that date who joined us prior to January 1, 2011 and who met their minimum billable hour targets on an absolute or annualized basis during either (a) the associate compensation year that ended October 31, 2010, or (b) the period of April 1, 2010 through March 31, 2011. Bonuses will be prorated for associates who joined us after March 31, 2010, or who have reduced time arrangements.
We appreciate your hard work and commitment to serving our clients.
Dennis and Emily