Biglaw disappoint with its twisted bonus formula with high billable hour requirements

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One of the advantages of the consistent nature of Biglaw’s rewards (and compensation, in general for that matter), is that what colleagues will offer is crystal clear. If there are conditions (usually based on pay hours) they tend to be clear and known in advance. But this is not always the case.

On Friday, Hogan Lovells announced year-end bonuses. The scale matches the market bonus, according to the company’s usual 2,000-hour requirement, which can include up to 150 free hours until employees meet the 1,850-hour-paid threshold, after which there is no limit to free hours.

The company also offers special bonuses (The full email is available on the following page):

We are also pleased to announce that this year we will pay a special bonus to colleagues who are in good standing. The special bonus will be paid to all first and second year partners, third year and more senior employees who have achieved at least 1,900 paid hours. Funds up to $ 40,000 will be awarded and will vary by semester and level of achievement. Our senior fellows on top of scale have the potential to get a total reward amount of $ 160,000.

Well, it’s not the easy-to-understand graph that most companies are looking for, but colleagues in the company might be fine. And initial feedback from the Tipsters seemed to agree that most of the partners would be fine

That’s exactly as expected … no confirmation By the year standards set for special bonuses, but given the $ 40K range, everyone assumes that this is the industry standard.

But today, there was a city council with Richard Lorenzo, managing partner of the Americas, and a different methodology Completely It was an introduction. For Fellows in the third year and above (there is no minimum for the first or second year to receive Special Market Rewards), the following formula will be used:

-1900-1999 hours = 5% of the norm;
-2000-2099 hours = 15% of the norm;
-2100-2199 hours = 25% of the norm;
-2200 + hours = 40% of base.

So, for third-year Fellows who meet the pre-set billing goal of 2000, they will receive full year-end bonuses but only a special bonus of $ 7,500. They’ll have to bill 2,200 hours to claim a $ 20,000 Market Special Bonus. And it’s getting worse, as fourth to sixth year employees who are billed during this new 2,200 hour goal will see smaller rewards than their counterparts at other companies. (For example, a 2014 HoLove student with more than 2,200 hours will receive a reward of $ 36,000, compared to a market price of $ 37,000.) Senior Fellows who bill their butts will have the opportunity to offer special market rewards of $ 40,000.

Let’s check out HoLove’s tips and see how they do (spoiler alert, they’re not okay):

It’s like “F You” to the fellows who turned back in their pay hours without any error on their part. People like me have done everything we can to help the company in other ways, including BD, and that’s a truly stupid way for the company to show its thanks. The association with the paid hours in addition to the face that the company gives for the first and second years without looking at the hours means that this hits its profits as little as possible. They pretend to be market match while giving almost nothing to most of their partners.

[Supplemental] However, the rewards are based on a completely different scale from normal rewards. Accordingly, this will result in fewer rewards than the market, even for very high bills

The company adjusts target posts in the hour after the specified time (the company has consistently repeated that it “matches the market” at 2000 hours), and it is understandable that people are upset.

The first and second year have no hour requirements, which creates a situation where the second year that issued 10 total hours gets a greater reward than the seventh year issued 1999, which raises questions about fairness …

Speaking of fairness, the craziest streak in City Hall was when someone asked how fair this was and Richard said, “Equity can be defined in many different ways.”

When colleagues began to ask the tough questions, management quickly terminated City Hall even though many aides asked to keep the line open so they could hear Richard explain these bonuses and answer the questions … not very transparent.

Not sure if you’ve heard, but Hogan Lovells just put a 2,200-hour clause on supplemental rewards (and they use complicated percentage calculations for amounts). They are mainly vague and pay less than market rewards. People weren’t happy and the hosts hung up as people started asking harder questions.

Oops, the rug stinks to be pulled out from under you like this.

As always, we’re counting on you when it comes to bonus news. Once your company bonus note has been issued, please Email it to us (Subject line: “[Firm Name] Bonus “) or text us (646-820-8477). Please include the note if available. You can take a photo of the note and send it via text or email if you don’t want the original PDF or Word file to be forwarded.

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head shotCatherine Rubino is senior editor of Above the Law and host of The Jabot Podcast. AtL Tips are the best, so please get in touch. Feel free to email to her For any advice, questions or comments and follow it on Twitter (@Catherine 1).

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