Welcome to day four of Associate Bonus Watch 2015. At this point, what is left to be said? There’s not much sense in adding to our prior speculation about when bonuses will arrive and how big they will be. At this point, you just want actual news — and so do we.
As it turns out, we do have some actual news to pass along. It’s not as exciting as a bonus announcement from a Fab Five firm, but at least it’s happy news.
In advance of the start of bonus season proper, various firms have been making tweaks to their policies. In October, for example, Fried Frank revised its bonus policy to make it more transparent and more generous.
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Late last month, Hogan Lovells adjusted its bonus policy to provide greater support for pro bono work. A source explains:
As detailed in [this memo], Hogan Lovells has made a significant (positive) change to the firm’s policy on billable-hour credit for pro bono activities by U.S.-based associates.
Previously, the general policy was that the firm gave billable-hour credit for up to 100 hours of pro bono each billable year; with special permission, associates could receive credit for more than 100 hours in a given year (“Pro Bono Fellowship”). Because the firm isn’t lockstep for bonuses outside of New York [i.e., if you just hit the 1,950 minimum billable-hour target, you get a tiny fraction of NY market, but if you bill significantly more than that, you can make above NY market], this 100-hour cap generally disincentivized associates from doing more than 100 hours of pro bono work because associates didn’t get any credit for hours above and beyond 100 hours come bonus time. Out of the goodness of their hearts, some associates still performed hundreds of hours of pro bono… but, with the “individualized” bonus structure (which is pretty obviously ONLY about billable hours), they weren’t handsomely rewarded as were our colleagues who did hundreds of hours of billable work above the firm’s 1950-billable hour expectation.
Now, the new policy (retroactive to the 2014-2015 compensation year, which wrapped up October 31) will treat equally billable and pro bono hours, so long as an associate bills at least 1,850 hours — that means that anyone who does more than 100 pro bono hours will get 1:1 credit, come bonus time, for all of those additional pro bono hours. Since people who bill significantly more than 1,950 have been rewarded with better-than-NY-market bonuses in the past couple years, this is a really nice sign that the firm is willing to pay out for pro bono in the same way as it is for billable work (so long as a minimum of billable work is done, too).
This is great news on both the bonus and pro bono front. Kudos to Hogan Lovells — already a pro bono leader, in the top 10 percent of Am Law 200 firms — for making its commitment to pro bono even stronger.
If your firm has made any noteworthy changes to its bonus policy lately, please drop us a line. And, of course, please shoot us a copy of the memo as soon as your firm announces its 2015 bonus scale!
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(Flip to the next page to read the complete Hogan Lovells memorandum.)