Biglaw Perk Watch: Associate Client Fees
Here's an interesting (and potentially lucrative) Biglaw benefit, which was recently brought to our attention:
How about a Biglaw perk watch thread on associate client fees? For example, at Kramer Levin, if an associate brings a new client to the firm, he or she gets 7 percent of all fees collected from that client.The rule applies even if the associate isn't involved in the matter. So, for example, a litigator who brings in a corporate client would still get the percentage.
We have heard of such arrangements, although we think they tend to be more common among midsize and smaller firms, as opposed to the biggest of Biglaw shops. But even if you don't share in the fees, it obviously helps your partnership chances if you have the power to bring in a major client (e.g., because your mom is the CEO or GC of a Fortune 500 company).
If you have thoughts or information to share, please do so in the comments. Thanks.
(49) Comments
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yup
This is smart - gives associates incentives to bring in business (even if they aren't expected to until they are partners).
Real great incentive for practice development. $500,000 in billings=an additional $35,000, not too shabby for a little shmoozing. Anyone know if that is just for first year's fees or if a continuing client relationship does it go for all additional years? Can amount to a nice chunk of change.
Atlanta to 7% of peanuts! Woo hoo!
Drinker Biddle has a similar system.
baker and mckenzie gives 10% of all billings.
At Kaye Scholer, you get 10% of business, once the revenue reaches $100K. I believe that means you get $10K right off the bat (rather than 10% of everything in excess of $100K).
Lord, Bissell & Brook used to do this (50% of profits or 5% of revenue, whichever is greater), but have ended this practice after the merger with Locke.
Is that billings or collections?
3:42 - what is a "drinker biddle"?
how are these not unethical referral fees?
LAT
In order to assist all the arguing on the cost of living comparisons, you should do a thread on billing rates. People could turn in vault ranking (by fives), year, area, location and billing rate. We'd have a much truer idea about whether or not NYer's should get paid more.
DO IT. DO IT.
I'm vault 20, second year, corporate, LA $360/hr.
4:01---Would be unethical if worked for a firm that didn't pay a bonus for business and you referred it to a friend that worked for a firm that did and the 2 of you split the fee. This is certainly ethical you work for the firm, one of the things they pay you for is bringing in business.
It is a great idea. In fact, the associate comm at my Philly firm proposed this to management. Unfortunately for the associates here, the firm sent a memo to the associates telling us that they asked some associates and the associates did not seem to want to get credit (of any type) for bringing in clients. It seems like management could have invested the time to come up with a better lie.
Anyone know how much a first year at Wachtell/Cravath/S&C/DPW in NYC bills at?
4:01 - there is no referral issue b/c it isn't a referral, it is bringing a client in for your own firm
At Skadden, you do get a percentage (I forget how much and am too lazy to look it up) but only for the first matter for that client. That being said, it's a great perk if you can pull it off.
3:57 - Agreed.... let's keep funny made-up law firms off this board.
Drinker Biddle Gardner Carton
Kaye Scholer is 5%. And I believe the client's fees have to hit $100k before you see that first $5,000.
Stevens and Lee (Reading, couple satellite offices in big cities) gives 10%. Pretty fuckin sweet if you ask me - and could be worth more than a starting salary of 160k
first!
Holland & Hart, a large regional rocky mountain law firm, pays associates 10% of all matters that come through the door. There is a cap at $50,000 per year in this fee split (for $500,000 in fees brought in the door).
...I know that the Rocky Mountains don't exist...it is a fictional place, like candyland, or say, weekends for all you NYC 1st years.
how the hell do you plan on bringing in multi-million dollar business?!?!?!?
V5, second year, corporate, NY $395/hr.
summer associte 07, v 65, NY, 275, rip-off i was worth negative money cuz i wasted real associates time when they tried to figure out what the hell i did and whether they could salvage it into something presentable or should just re-do it themselves
4:46,
It's easy enough if, as in the example Lat gave, your mom is CEO of a Fortune 500 company, or if you have connections from the country club or summer in the Hamptons.
In other words, these programs only benefit associates who don't really need the money anyway.
It is up for negioation after 250k
I got
everything under 250k 10%
between 250-1m 15%
over 1m 20%
Bryan Cave pays $5,000 on the first $25,000 of collections from clients that you bring in, and then an unspecified (discretionary) percentage (8-10% IME) on all future business from that client for that year. Each year, the "meter" starts over.
There are other meets and bounds to the perk. But it is a pretty fantastic program.
And, I disagree that it only helps those who don't need the money. I've been helped by it and G_d knows I need the money!
Where the FUCK are the bonus updates? Firms in NY suck ballz.
'05, Bankruptcy Assoc, $430/hr v70 methinks
Thelen used to do 10% of the first $100K, starting from dollar one, with 5% after $100K, with such bonuses running through a third year. That was in 2001 or so, when I got a couple of thousand bucks in bonus for a small matter I brought in and for which I personally did nothing more than the conflicts check and the engagement letter.
To me, a perk is a nice extra that comes along on top of compensation - e.g., expense account lunches or health club membership. Compensation for business generation is not a "perk" - it's consideration for conferring a significant economic benefit on the law firm.
To me, a perk is a nice extra that comes along on top of compensation - e.g., expense account lunches or health club membership. Compensation for business generation is not a "perk" - it's consideration for conferring a significant economic benefit on the law firm.
Skadden:
ALLOCATION OF FEES ON MATTERS
ORIGINATED BY ASSOCIATES
The Firm has always encouraged associates and counsel to bring new business into the Firm, and accordingly, will share fees from the first matter for a new client brought to the Firm by an associate or counsel. Thereafter, the client will be treated as a Firm client.
The following sets forth the basis upon which the fees will be shared by the Firm and the associate where it has been determined that a client brought to the Firm by an associate should be represented by the Firm:
(a) In the case of fees which do not exceed 50% of computer time charges, the Firm will retain the entire fee.
(b) In the case of fees which exceed 50% of computer time charges, the Firm will retain an amount equivalent to 50% of the computer time charges and the associate will receive 50% of the amount of the fee which exceeds 50% of the computer time charges up to a maximum of $15,000 for any one client or $25,000 in any one year, unless a different limit is specifically agreed upon in advance.
(c) Any disbursements written off in connection with a matter will be deducted from the fee for purposes of the above computation.
At the time of origination of the new matter memo, the partner in charge should indicate the associate's role in obtaining the business and the nature of the associate's prior contact with the client. Any questions concerning the associate's eligibility for fee sharing should be resolved at origination. The determination of whether there is any basis for a sharing of fees will be made solely by the Firm.
Matters originated by associates do not include matters resulting from performance of existing Firm business, new matters for an existing Firm client, new clients obtained through referrals from existing clients or through contacts made during the performance of professional activities conducted by associates such as lecturing or writing articles.
seriously 4:01, did you go to law school?
This sounds good- just bring in 4 or 5 clients billing $250K each a year, and when you've reached critical mass tell the firm you're leaving along with your clients and a couple of associates you're friends with, unless they make you partner pronto.
710
how the hell do you think it works everywhere? (except for the associates - no one gives a shit about them unless they are superstars, in which case they aint leaving with some assclown with a potential 1 mil pamphlet)
My mid-size Philly firm pays associates a bonus of 8% of the amount collected on any client originated by the associate. No limits.
"3:57 - Agreed.... let's keep funny made-up law firms off this board."
um, yeah.
v40, summer associate, dc, $225/hr.
Someone at my firm brought in some deals from Goldman Sachs. Not even a thank you from the partners. And I think they know who Goldman Sachs is.
AMLaw 100 Florida, first year, $185/hr. Junior partners at $350. Senior partners $650.
At my biglaw firm, non-first-year associates are eligible for an origination bonus for new business that has calendar year fees exceeding $100,000 (at full realization rates) to the tune of 5% of fees collected with an annual cap of $25,000.
San Francisco 2nd year in real estate billed at $385 an hour. What are rates in places like Dallas?
My small Philadelphia firm pays associates 15% of all fees generated and collected. It is definitely a plus and an incentive. And well worth the effort.
Chadbourne & Parke pays 5% up to a maximum that I don't know.
Blank Rome pays 10%.
Partner @ NY boutique -- we pay associates who hit annual hours targets 50% of collected originations up to 1st 100k; 33% of next 100%, 20% of all after that.