Hogan Lovells Reverses Virus Cuts For Associates, Others

By Kevin Penton
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Law360 (September 4, 2020, 6:45 PM EDT) -- Hogan Lovells will reverse pay cuts instituted in June for associates and other employees, the firm said Friday, becoming the latest firm to roll back austerity measures implemented earlier this year amid the COVID-19 pandemic.

Hogan Lovells will reverse pay cuts of about 10% that began on June 1 in the U.S., Mexico and Brazil for certain associates, counsel, specialists and knowledge lawyers, following a "solid performance" over the summer, firm CEO Miguel Zaldivar said in a statement.

"Now is the time to start a step-by-step approach to reverse some of the prudent measures we implemented earlier this year around compensation," Zaldivar said. "This is a strong testament to the work which we have all been doing under very challenging conditions and we are looking towards a continued solid performance through to the end of the year."

Discretionary bonus payments and annual salary reviews for associates and counsel in the U.K., Dubai and Asia-Pacific region that typically occur in May will occur this month, backdated to May 1, according to the firm.

Compensation and bonus reviews for business services workers and personal assistants in many locales outside the U.S. that typically occur in May will now be conducted during the third quarter, Hogan Lovells said.

Year-end bonus decisions for those eligible will again occur, while pay cuts for nonequity partners and senior counsel will be reviewed before the end of December, according to the firm.

Not all will share in the rollbacks: Equity partners can still expect to see reduced draws and bonus payments through the end of December, according to the announcement.

Among the austerity measures confirmed in May, the firm said it planned to reduce U.S. equity partner draws by 15% to 25% starting June 1, with all equity partners deferring half of the first quarter profits they normally received in August until November.

A Hogan Lovells spokeswoman confirmed Friday that it has not cut staff or introduced any layoffs, setting it apart from other firms in recent days that have announced rollbacks to previous financial cuts while simultaneously instituting layoffs.

Baker McKenzie said Tuesday that it planned to reverse pandemic-related pay cuts in the new year, while also announcing that it was laying off 6% of its workforce in North America, both lawyers and staff.

Davis Wright Tremaine LLP similarly said on Tuesday that it plans to restore its previous pay reductions by half and will lay off some staff.

Nixon Peabody LLP on Thursday confirmed it would reverse the 20% cuts in schedules and compensation for many of the firm's staff, while also laying off some previously furloughed staff.

And Troutman Pepper told employees on Friday that effective Sept. 1, all COVID-related pay cuts would end, with the hope that workers would be compensated before the end of the year for the money they had missed out on, according to a report in Above the Law.

Troutman Pepper officials could not be reached for comment on Friday.

--Additional reporting by Aebra Coe, Xiumei Dong and Emma Cueto. Editing by Alyssa Miller.

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