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    Home » Hogan Lovells Hikes Bonuses, Revamps System After Partner Concerns

    Hogan Lovells Hikes Bonuses, Revamps System After Partner Concerns

    May 9, 20223 Mins Read Litigation
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    Hogan Lovells has shaken up its U.K. bonus arrangements, adding more flexibility into the way associates qualify for the awards as well as the amount on offer.

    The firm has increased the total possible salary bonus pay out for senior associates at the firm from 40% to 50%. The amount is still calculated by two measures, billable hours and a discretionary element based on business development activities including playing a role on pitches, pro bono work or winning new clients.

    The firm has also adjusted the amounts handed to those associates who have hit specific billable hours targets. Associates billing around 1,800 hours will receive a 10% salary bonus, while associates billing around 1,900 and 2,000 hours qualify for 15% and 20% salary bonuses respectively.

    If an associate bills over 2,000 hours, they will be rewarded with a salary bonus of over 20%, but their total overall bonus would be capped at 50%, including the discretionary performance related calculation.

    Counsel at the firm can also now qualify for salary bonuses of up to 50%.

    According to a person at the firm, some senior associates at Hogan Lovells are on salaries of around £200,000, meaning if they qualified for the 50% bonus, their total compensation could be upwards of £300,000.

    The changes follow after Hogan Lovells partners called for changes to how the existing model could be improved.

    The previous structure was more contingent on associates hitting billable hours targets, without which they were not eligible for the discretionary part of the bonus.

    One person at the firm said at the time that this meant: “you could have some people working extremely hard doing really well but who then have a couple of quieter months, and so they then aren’t entitled to any part of the bonus”.

    Junior associates, including the firm’s newly-qualified (NQ) lawyers, can receive a maximum 35% salary bonus, also calculated based on a combination of billable hours and discretionary performance.

    Earlier this year the firm raised its NQ London base rate to £107,500. An NQ who was handed the maximum bonus would take home total compensation of £145,125.

    The new system allows more flexibility, according to a London partner at the firm. “Now, an associate who may have [billed] 1795 hours but did exceptional work, can still make up a bonus through the discretionary route,” he said.

    A spokesperson for Hogan Lovells said: “We currently operate a merit based pay model with broad salary bands for our qualified lawyers to ensure that we are able to take into account an individual’s performance when determining salary within the relevant salary band.

    “In addition, our total compensation reward model means that lawyers have the ability to earn bonuses based on the combination of their chargeable hours and/or a discretionary bonus for their other contributions.”

    Concerns have been raised across the industry regarding rapidly rising NQ pay in the last 12 months, as firms have hiked rates. Many believe the meteoric rises are too high and the frequent raises are unsustainable.

    The changes to Hogan Lovells’ pay flexibility comes as all firms attempt to attract and retain talent. In March, Dentons overhauled pay and bonus schemes for all of its fee-earners across its U.K, Ireland and Middle East offices as well as upping its NQ pay across those bases.

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