Associate Bonus Watch: Paul Hastings - California, Chicago, DC(Plus a complaint about timing of PH's raises and bonuses.)

Yes, it’s March already. Guess what that means? No, we’re not talking about March Madness. We’re thinking of… bonus news from Paul Hastings!
A tipster in a non-New York office summarizes:

It looks like we matched Latham’s base levels. I’ve also been told that NYC matched the special bonuses there.

Better late than never!

We got our grubby paws on the memo sent to associates in California, Chicago, and Washington, DC. Here’s the money (hehe) quote:

This year’s associate bonus pool of $23.3 million is the largest in Firm history – a 20% increase over last year’s pool – with approximately 81% of participating associates receiving a bonus. Additionally, bonus awards for your offices are higher than last year at virtually all levels.

Performance expectations are steep, thus receipt of a bonus is a significant achievement. Top level bonuses are the exception and are awarded to associates distinguishing themselves by consistently demonstrating exceptional performance that far surpasses the Firm’s standards. Approximately 10% of all bonus recipients distinguished themselves at this level and were awarded the top bonus.

We haven’t seen memos for other PH offices. A source in Atlanta, though, claims that the firm cut ATL bonuses by 50 percent. Perhaps that’s their way of balancing out the recent pay raise.
We also haven’t seen the New York numbers. But at a meeting “a while back,” Barry Brooks, the firm’s New York managing partner, effectively told associates they’d match shops like Latham and Gibson.
The full memo for California / Chicago / D.C. — plus additional discussion about Paul Hastings, including complaints about the timing of their class-year raises and bonus payments — after the jump.


From an irate Paul Hastings associate:

PH, and any other firm whose class-year salary bumps occur in February, pays us less than all our peer firms every January. For example, a second-year would get January at 160K ÷ 12 and all other months at 170K ÷ 12, while other firms get 170K ÷ 12 for twelve full months.

While not a huge amount any one year, an eighth-year associate would have contributed something like $10K to PH’s coffers by not getting paid at the same time as his peers. It’s a sneaky way to pay under market.

So is paying the bonus ridiculously late. In addition to screwing people who want to leave, and having time to fire those whose reviews were lackluster before giving them a bonus, paying in March results in a loss to us. If we put this money in the bank, we’d get a few hundred bucks over the time it sits getting the same for the firm. The firm makes a good chunk of change by these nickel and diming things. It allows them to sneakily go below market, all the while claiming they are at market.

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Paul Hastings, by the way, doesn’t need more bad publicity these days. Last month, they found themselves in this embarrassing situation.
PAUL, HASTINGS, JANOFSKY & WALKER — MEMORANDUM — 2007 ASSOCIATE BONUSES (selected offices)
date: March 5, 2008
to: California, Chicago, Washington, D.C. and Participating International Associates
cc: Partners; Recruiting and Development
from: Performance Management Committee
subject: 2007 Associate Bonuses
We are pleased to announce associate bonuses for 2007. These bonuses are a reward in recognition of your numerous contributions to the Firm’s success this past year.
This year’s associate bonus pool of $23.3 million is the largest in Firm history – a 20% increase over last year’s pool – with approximately 81% of participating associates receiving a bonus. Additionally, bonus awards for your offices are higher than last year at virtually all levels.
Performance expectations are steep, thus receipt of a bonus is a significant achievement. Top level bonuses are the exception and are awarded to associates distinguishing themselves by consistently demonstrating exceptional performance that far surpasses the Firm’s standards. Approximately 10% of all bonus recipients distinguished themselves at this level and were awarded the top bonus.
This year, the Performance Management Committee was established to mange the evaluation and bonus program. The following approach to the allocation of bonuses was applied:
• Bonus allocations were determined based on associate performance according to the following performance criteria: quality and efficiency of legal work, including achieving favorable legal results for clients; economic contribution; client service and client relations; business and practice development; Firm committee and community involvement, including pro bono activities; training and mentoring of more junior associates.
• Bonuses were determined using the calendar-year measurement period from January 1, 2007 through December 31, 2007.
• Productivity is one component of our bonus allocations. For 2007, we opted to set the bonus-eligibility “hours threshold” at 97.5% of an associate’s qualifying hours budget given relative productivity of associates in all offices. For example, full-time associates with a 2000 hour budget who worked at least 1950 qualifying hours (client billable, Firm special projects and pro bono) between January 1, 2007 and December 31, 2007 were bonus-eligible. Associates with an adjusted budget of less than 2000 hours due to part-time work, etc., were measured against an adjusted threshold taking into account their adjusted budget.
• In addition, in many situations, we awarded bonuses to associates who did not meet the qualifying hours threshold but where their contributions or performance merited special distinction.
• Timesheet compliance was closely reviewed and an eligible associate receiving a bonus earned less in the event of material non-compliance with timesheet deadlines.
• All associates other than the class of 2007 were eligible to participate in the bonus pool. Bonuses were prorated for those associates who worked at the Firm less than full-time for the entire 2007 calendar year.
The following table provides additional information about our 2007 bonuses for full-time, full-year associates in California, Chicago, Washington, D.C. and Asia offices.

U.S. associates receiving year-end bonuses will receive payment, either through direct deposit or checks delivered to their office on March 14th, net of taxes where applicable. Associates wishing to elect 401K deferrals must submit appropriate paperwork by close of business on Friday, March 7th. Today, Human Resources is emailing a bulletin containing all details.
The partner or of counsel who completed your primary performance evaluation has received your bonus information. If not already scheduled, your primary evaluator will contact you soon to schedule your performance review conference to provide your performance feedback, address any performance-related questions you may have, and provide your bonus information.
Any questions you have related to the evaluation and bonus process, specific hours, proration calculations, bonus-eligibility, and bonus calculations should be directed to your primary evaluator or your local Department Chair.
Thank you for your contributions to the success of the Firm and we look forward to your continued dedication and commitment to making Paul Hastings one of the world’s leading law firms.
Bilked Investor Balks at Paul Hastings’ Deal [Fulton County Daily Report]
Bilked Investor Balks at Paul Hastings’ Deal [FCDR via Yahoo News]

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