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Hogan Lovells announced in a statement on Friday, it will reverse COVID-19 salary cuts for associates and hold deferred salary reviews for attorneys in the U.K., Dubai, and Asia-Pacific.
The big law firm with $2,246,050,000 in gross revenue in 2019, announced the austerity measures in May, slashing equity partners’ monthly draws by 15 to 25 percent and cutting the salaries of associates, lawyers, and specialists by 10 percent. Equity partners also deferred half of any profits and nonequity partners got a 15 percent cut.
However, thanks to a strong performance over the last three months, the global law firm decided to restore most of those salary cuts — making the change retroactive to May.
“Having looked carefully at our work over the summer, we have seen a solid performance and 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,” Hogan Lovells CEO Miguel Zaldivar wrote in a statement on Friday. “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,” he added.
The firm said the pay restoration applies to associates, attorneys, specialists, counselors, and knowledge lawyers in the U.S., Mexico, and Brazil that had been reduced from June 1 by 10% on an annual basis. The compensation will be reversed retroactively to the date.
Additionally, the annual salary review and bonus awards for associates and counsel in the Asia-Pacific region, Dubai, and the U.K., that were postponed will now be reinstated in September and compensation adjustments will be reversed retroactively to May 1.
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The firm also said that decisions regarding bonuses, for those eligible at the end of 2020, will be made in the “normal course of business, applying the normal standards” as reported by Law.com.
The firm said it would keep some austerity measures instituted in June, such as reduced draws and bonus payments for equity partners through the end of the year. In contrast, the compensation reduction for nonequity partners and senior counsel will be reviewed later in the year.
Hogan Lovells is among several big law firms that have announced pay restorations, as the effects of the pandemic on business become more apparent.
Firms to unwind measures include Crowell & Moring, Katten-Muchin-Rosenman, Cadwalader, Wickersham, & Taft, Fox Rothschild, K&L Gates, Baker Botts, Reed Smith, and Sheppard, Mullin, Richter, and Hampton.
