West Coast Pay Raise Watch: The Heller Ehrman 'Raise,' and a Request for Bonus Information

Fear not, ATL readers. We’re already on the case. We are collecting information about the bonus structures of different law firms, with a focus on West Coast or California law firms.
To make this effort a success, we need your help. Please send tips and memos to us by email (subject line: “Bonus Structure”).
(We should warn you that it may take a little time to collect and process this information. So don’t expect a comprehensive report immediately.)
Why do bonuses matter so much? As it turns out, law firms that are paying base salaries that are the same (nominally) actually compensate similarly hardworking associates quite differently. Significant differences exist between Biglaw shops in terms of the hours-based bonuses.
One example of why bonuses matter: the just announced Heller Ehrman “raise” (memo after the jump). From a tipster:

Note that because Heller has eliminated a previously-existing automatic bonus payout at 2000 exactly equivalent to the amount of “adjustment” to the base salary, this move amounts to a “raise” of $0 for anyone billing over 2000 hours (i.e., most everyone). I implore you to solicit memos and other information relating to the bonus structures of firms–particularly firms following the “California model” of paying out rigid, automatic bonuses at various hours-targets. Without such information public, firms (like Heller and MoFo) assume that they can trick law students into believing they’re “competitive” when in fact they may be below market in terms of real compensation. (NY was already at $160k, and they apparently still get their 2000 hours bonus on top of that.)

An interesting comparison, after the jump.


And then there’s this, from a second helpful tipster:

An anonymous tip for you on the new base comp vs. bonus structure in California. Attached are Orrick and Heller memos that discuss bonuses along with base salary. [Ed. note: Heller memo appears below. The Orrick memo, which is a long Word document, will follow later.]

A third year at Heller billing 2100 hours will make $185,000 base plus $8,000 bonus now.

A third year at Orrick billing 2100 hours will make $185,000 base plus $45,000 bonus now.

I don’t have a MoFo memo, but this same analysis needs to be done.

This very big discrepancy needs to be publicized. Please post!!!!

We thank our sources for this information.
HELLER EHRMAN
To: All associates in the Los Angeles, Madison, San Diego, San Francisco, Seattle, Silicon Valley and Washington D.C. offices
Cc: FW – Shareholders; Administrative Management; New York Associates
From: Rob Hubbell, Judy Miles and David Sanders
Date: Friday, May 11
Subject: Associate Salary Adjustments
The following email is being distributed to all associates in our Los Angeles, Madison, San Diego, San Francisco, Seattle, Silicon Valley, and Washington D.C. offices.
Heller Ehrman is committed to attracting and retaining highly skilled associates for our firm. We also understand the importance of remaining competitive to ensure we recruit and retain valuable employees.
In response to recent changes in the market, we will adjust associate salaries in our Los Angeles, Madison, San Diego, San Francisco, Seattle, Silicon Valley, and Washington D.C. offices. These changes are effective June 1, 2007. You will see these adjustments reflected on your June 22 paycheck.
Below are the updated salary structures. The Associate/Special Counsel website located on our firm’s intranet will also be updated in the next week to reflect these changes.
At the end of 2007, any bonus-eligible associate who makes less than they would have under the former compensation model will be paid the difference in January 2008.
Please contact your local Office Managing Shareholder or Human Resources Manager with any questions about these changes.
Thank you,
Rob Hubbell
Judy Miles
David Sanders
National
2007 Basic Bonus
Level 2007 Base 2100 Hrs 2200 Hrs 2300 Hrs 2400 Hrs 2007 Enhanced Bonus 2007 Potential Compensation
1 $160,000 $5,000 $5,000 $5,000 $7,000 $0 – $15,000 $197,000
2 $170,000 $7,000 $7,000 $7,000 $10,000 $0 – $15,000 $216,000
3 $185,000 $8,000 $8,000 $8,000 $12,000 $0 – $17,500 $238,500
4 $210,000 $9,000 $9,000 $9,000 $14,500 $0 – $20,000 $271,500
5 $230,000 $10,000 $10,000 $10,000 $15,500 $0 – $20,000 $295,500
6 $250,000 $10,000 $10,000 $10,000 $15,500 $0 – $25,000 $320,500
7 $265,000 $10,000 $10,000 $10,000 $15,500 $0 – $25,000 $335,500
Seattle
2007 Basic Bonus
Level 2007 Base 2100 Hrs 2200 Hrs 2300 Hrs 2400 Hrs 2007 Enhanced Bonus 2007 Potential Compensation
1 $145,000 $5,000 $5,000 $5,000 $7,000 $0 – $15,000 $182,000
2 $150,000 $7,000 $7,000 $7,000 $10,000 $0 – $15,000 $196,000
3 $160,000 $8,000 $8,000 $8,000 $12,000 $0 – $17,500 $213,500
4 $180,000 $9,000 $9,000 $9,000 $14,500 $0 – $20,000 $241,500
5 $190,000 $10,000 $10,000 $10,000 $15,500 $0 – $20,000 $255,500
6 $210,000 $10,000 $10,000 $10,000 $15,500 $0 – $25,000 $280,500
7 $225,000 $10,000 $10,000 $10,000 $15,500 $0 – $25,000 $295,500

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