First a little background: Hogan & Hartson pays associates on a two tier system, where associates can choose to receive higher base salary but with a higher billable hours requirement, or take a lower base salary with lower expectations. This year, salaries were frozen at 2008 levels and in the spring, Hogan & Hartson arbitrarily moved any associate not on track to make the higher billable hour total down to the lower track, paying them the less lucrative salary, but with the promise to restore the money if they caught up.
Today Hogan & Hartson passed out three nice bits of news. First, salaries are being unfrozen and all associates will advance one year in 2010, although the frozen year will not be restored. Second, anyone that was bumped down a track who meets the billable hour requirement for the upper track will receive the difference in a lump sum payment. They will also be returned to the higher track, even if they didn’t meet the hourly total for this year. Finally, bonuses have been announced. The bonuses are discretionary and require that the associate meet a billable hour target. Non billable hours above and beyond the call of duty may be credited to meet the total at the firm’s discretion.
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It’s always tricky to create such tension to achieve billable hours – this sometimes leads to hour inflation and overall dissatisfaction from clients. Not that I’m saying that happened in this case, but it’s something to be aware of.