Associate Bonus Watch 2007, Biglaw, Billable Hours, Bonuses, Money, Skaddenfreude

Associate Bonus Watch: Dechert Docks Associates for Dilatory Billables

associate bonus watch 2007 law firm Above the Law blog.jpgHow can law firm administrators get associates to enter their time on time? Here’s one idea: link time entry to those beloved bonuses.
From a source at Dechert:

Attached is an email that all the attorneys at Dechert LLP received today regarding associate bonuses and potential penalties. According to the policy outlined below, an associate’s bonus may be reduced by up to 10% due to the late submission of billable time over the past year. I thought this might be of some interest to your readers.

We agree. Might this become a Biglaw trend? Nagging emails about timely time entry are easily ignored. Slashing bonuses, on the other hand, tends to grab associates’ attention.
In fairness to the firm, it’s worth noting that the policy is not super-draconian. Most of the bonus reductions were under 5 percent, and delinquent associates have the opportunity to redeem themselves: “[E]very associate whose 2007 bonus is reduced will have the opportunity to earn the amount of bonus reduction back, if he or she remains in good standing and complies fully with our time-recording policy in 2008.”
Check out the full memo, after the jump.

From: Craig Godshall
Sent: Tuesday, February 05, 2008 9:44 AM
To: NA Associates
Cc: NA Partners; ALL PRC
Subject: Bonuses and Late Time Recording
Within a few days, we will be issuing bonus checks to associates for their 2007 work. In some instances, we have reduced the bonus that is being awarded because of the associate’s failure to comply with the firm’s time recording policy. At the same time, because our primary goal is to improve associates’ time recording, every associate whose 2007 bonus is reduced will have the opportunity to earn the amount of bonus reduction back, if he or she remains in good standing and complies fully with our time-recording policy in 2008.
As all of the timekeepers in this firm have been repeatedly reminded, accurate and prompt timekeeping is not merely an essential part of every law firm’s business, it is a matter of professional responsibility. Accordingly, the long-standing policy of this firm is that time be written down and entered into the system on a daily basis by all time recorders. Partners have been subject to fines for late time recording for several years. And in 2006, we announced and put on the intranet that “an associate’s failure to submit and close his or her time in a timely manner will be considered in bonus determinations and salary raises and may negatively impact bonus and raise.” A number of 2006 bonuses that would otherwise have been awarded were reduced for failure to enter time promptly upon the end of the month. Unfortunately, the situation has not improved.
Accordingly, this year we have reduced by a percentage (between 3% to 10% with only a handful of associates reduced over 5%) from bonuses depending on the degree of non-compliance. All of the affected associates were significantly beyond the thresholds at which partners are fined.
At the time we pay 2008 bonuses an associate in good standing on that date will get this bonus reduction back so long as he or she enters time ‘promptly’ in 2008. By ‘promptly’, we mean that all time has to be entered and closed within three business days, or if earlier, the month-end cutoff date circulated by finance. “All time” means exactly that – billable, pro bono and non-billable. If at the end of the year, the associate does not have more than five cumulative days late during the course of 2008 (beginning in February), the bonus reduction will be paid.
We also understand that there may be extraordinary circumstances that may excuse certain instances of failure to comply with the time recording policies. In certain instances, the PRC has been aware of such mitigating circumstances, and has either modified or eliminated a reduction in bonus. If any associate believes that a bonus reduction is unfair, please contact your practice group administrator to review the circumstances. If for any reason you are uncomfortable with discussing the issue with your practice group administrator, please contact me directly or the Deputy Co-Chairs for Partner and Associate Development and Performance, [xxxx] and [xxxx].
We expect all associates to follow the Firm’s policies on time-recording. If associates do not enter all their time promptly (within three business days or the month-end cutoff if earlier) their 2008 bonus or salary will be impacted. We have not decided, or even discussed, the financial impact, but you should assume that the impact will be severe. In the worst cases, bonuses may be eliminated entirely. Again, if there is a reason that the time is not entered, contact your practice group administrator and we will work through the issue. If a partner tells you not to enter your time, for whatever reason, contact [xxxx] or [xxxx].
Craig L. Godshall
Dechert LLP

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