Associate Bonus Watch: Fish & Richardson Screws Associates Announces New Compensation Plan(And Open Thread for Discussion of Bonuses at IP Shops)

People who practice intellectual property law tend to be really, really smart. This is a good thing, since you’d have to be a genius to understand the new associate pay plan just announced by Fish & Richardson.
Okay, maybe that’s an exaggeration. But we just couldn’t bother reading a document as long and complex as the Fish & Richardson memo, at least this early in the day; the caffeine from our morning coffee is still working its way through our system.
Fortunately, our sources offered some explanation:

“Attached is the new Fish & Richardson compensation plan. The basically cut salraries by taking around 20k of salary away from each year and then giving it back when you make 2000 hours. Pretty sh**ty for patent prosecutors. Everyone is pretty pissed off about this.”

“I am pissed. Not only are they effectively taking 10k from my pocket because I always bill over 2000 hours, but we don’t get the target bonus or the special bonus. In short, someone from my year will make at least $80,000 more at another firm for hitting 2000 hours.”

To see what’s causing such bitterness, check out the memo, after the jump.


By the way, how hard do Fish & Richardson lawyers work? We always thought of the firm as a pretty hardworking place. But in the patent troll litigation that we wrote about earlier, former F&R lawyer Scott Harris said this:

Harris actually says in his counterclaim that Fish lawyers don’t bill that much. According to the counterclaim, Harris “routinely billed 1,900 to 2,000 hours per year. In a firm where many attorneys did not meet their billing goals, this often placed Mr. Harris in the top 25% highest billers at Fish.”

Anyway, we digress. Here’s the memo:
FISH & RICHARDSON PC — MEMORANDUM — NEW ASSOCIATE PAY SCALE
Date November 16, 2007
To All Associates
From Peter Devlin on behalf of the Management Committee
Re Adjusted Compensation Scale, Effective January 1, 2008
For over 100 years, Fish & Richardson P.C. has stood for excellence, promoting an atmosphere of collegiality and free thinking that inspires its lawyers to achieve outstanding results for its clients. We recognize that our people are fundamental to our past successes and future goals. As such, we realize the importance of attracting and retaining the finest lawyers, as well as the importance of rewarding our lawyers for their excellence and their dedication to our clients and the Firm.
In January, the top of the legal market experienced an adjustment to the base salaries paid to associates of all levels. This adjustment was initiated in New York, and it was quickly adopted by various firms throughout the country, including Fish & Richardson P.C.
Since January, however, we have observed that (1) many of the firms which adopted the new base salaries are firms that require substantially higher billable hours minimums (2000 or higher), and (2) many other firms have maintained 1900 hour minimums, while matching the new salary levels only for attorneys who bill 2000 hours or more, and generally maintaining compensation scales that are less rich than our pre-January 1900 hour base salary levels. The result is that our current structure leaves the Firm at a competitive economic disadvantage.
We assessed a number of possible options that would allow us to maintain our competitiveness and continue to foster the health of the firm, while allowing us to continue to pay at the top of the market. In doing so, we decided against the option of raising our minimum hour requirement to 2000 hours, for a variety of reasons. We instead decided to maintain our current 1900 hour minimum, modifying the compensation plan to account for a 1900 hour effort with compensation levels at the top of the market for a 1900 hour contribution. At the same time, we modified our compensation plan to account for a 2000 hour effort with higher compensation levels that reward the additional work performed and that are competitive with what other firms offer for the same level of contribution. In this manner, the new plan recognizes the varied contributions of our attorneys, while compensating different contributions equitably, each at the market’s highest levels.
The result is the following new compensation plan, which will become effective on January 1, 2008.

* The new compensation plan contemplates a transition period from our current compensation plan to the new compensation plan. Specifically, while the new compensation plan is effective January 2008, all rising associates will be ensured a raise of at least $5000 compared with their 2007 base salary. For instance, associates rising into the 5th-7th year classes will be ensured a raise in base salary of $5000 compared with their 2007 base salary, even though such a raise would otherwise not result from an observation of the scales set forth above in column 3. In these circumstances, the bonus potential at 2000 hours is correspondingly reduced, such that the overall compensation at 2000 hours will remain as shown on the scales set forth above in column 5.
** Associates who do not rise in class will remain at their 2007 base salary level. Also, associates joining the firm in 2008 will be compensated according to the fully transitioned scale and bonus levels.
As an overview, this new compensation plan has the following attributes:
· The new compensation plan continues to recognize 1900 hours as the minimum hours requirement for our associates.
· The new compensation plan recognizes and distinguishes between contributions of 1900 and 2000 hours, providing compensation that is consistent with the highest market compensation levels being paid for each contribution level.
o By way of example, under the new compensation plan, an attorney of any class year who has billed 2000 hours will achieve compensation that is comparable to the highest level presently being paid in the marketplace for a 2000 hour contribution by an attorney of their level.
o Similarly, an attorney of any class year who bills the 1900 hour minimum will earn their base salary, and in doing so will have received compensation that is comparable to the highest level presently being paid in the marketplace by firms with 1900-hour minimums for a 1900 hour contribution.
· The new compensation plan provides our first (“A1”) and second (“A2”) year associates who bill 1900 hours with a salary that is comparable to salaries paid by other firms for a 2000 hour contribution, enabling our young attorneys sufficient time to participate in training that will help them to achieve long-term success here at the Firm.
· The new compensation plan does not affect current incremental hours bonuses for 2100 or 2200 hours. However, the current bonus for 2000 hours is supplanted by a new 2000 hours bonus that is detailed above. Also, because A1s and A2s are being paid the market level for 2000 hours, there will be no additional hours-based bonus for them billing 2000 hours. For A3s on up, billings of 2000 hours will result in compensation that is commensurate with the current base compensation.
· The Firm’s merit bonus system will remain unchanged and it will continue to reward merit, commitment and firm-building contributions with merit-based bonuses.
Thus, this plan preserves our current 1900 hour minimum, without compromising our ability to compensate people at the top of the market, whether for a 1900 hour contribution or a 2000 hour contribution. In fact, for associates at the 3rd-7th year, the highest market salary scale is available, but it is reserved for those individuals who complete 2000 hours, with a rationally lesser amount being paid to associates who achieve the 1900 hour minimum without reaching 2000 hours. In this manner, the new compensation plan acknowledges the varied contributions of our diverse membership, while continuing to encourage and reward excellence and hard work at all levels.
If you have any questions about these changes, feel free to raise them with me or with any member of the Management Committee. We appreciate all of the effort that makes Fish & Richardson an exceptional choice for our clients, as well as an exceptional place to practice law.
Former Partner’s Filing Fries Fish Firm [Legal Pad / Callaw]
Earlier: Lawsuit of the Day: ICR v. Fish & Richardson
Associate Bonus Watch 2007 archives (scroll down)

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