Associate Bonus Watch: A Post-Holiday Round-Up

A few bonus announcements trickled in over the holidays. Here’s a round-up of recent bonus announcements that have not yet been covered in these pages. If you have new news, e-mail us at tips@abovethelaw.com.

1. Sheppard Mullin (New York): Sheppard Mullin is paying above market rate for attorneys who racked up the hours this year. Baseline hours are 2000 in New York (and 2100 outside of New York, see below). Bonuses range from $20,000 to $70,000, plus discretionary bonuses of $20,000 to $50,000. Reaction at the firm, after the jump.

2. Sheppard Mullin (outside New York): Associates in California and D.C. had to rack up a few more hours than their NY brethren to qualify for bonuses, with 2,100 as their baseline. And their lockstep bonuses for additional hours are not as generous. Details after the jump.

3. Akin Gump (outside New York): We posted on the New York market/ half-Skadden bonuses for Akin New York associates, announced on New Year’s Eve. Associates outside of New York received an e-mail saying that “merit bonuses” will be given based on “productivity, quality of work and Firm citizenship.” Check out the e-mail, and news of a freeze watch there, after the jump.

4. Linklaters (all U.S. offices): This Magic Circle firm announced bonuses and salary increases for U.S. associates right before Christmas. The London-based firm is following Cravath’s lead, paying half-Skadden bonuses to all U.S. associates, with no hours requirement. The firm will have normal class-year raises. Per our tipster, “the firm had a good first half, including in NY, so a Latham-style salary freeze would have been pretty shocking.”

5. Arnold & Porter (New York): Associates outside of New York got individualized bonus memos last week. New Yorkers got their bonus announcement on Jan. 2. Per our tipster, “the scale was as expected, the half-Skadden, which is significantly less than the bonus in non-NY offices, but at least is “market,” unlike our salaries.” Our tipster says the first A&P paycheck of the year remains at 2008 levels.

Bonus memos galore, after the jump.

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Our NYC Sheppard tipster was very happy:

The firm kept its California hours-based bonus system for all offices. Associates who do not make hours make less than other NY associates, but associates who make baseline hours can quickly get double the Cravath level bonuses this year… 50 hours of recruiting and pro bono count toward baseline hours (and, in NY, all indigent pro bono hours count as billable).

On the negative side, there’s a freeze in effect at Sheppard for 2009.

SHEPPARD MULLIN NEW YORK BONUS MEMORANDUM

TO ALL NY ASSOCIATES:

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We will be distributing our annual associate bonus checks this week. As you all know, 2008 has been a particularly challenging year for the legal industry and our clients. As a result of all of your valuable contributions, we’ve been able to manage these challenges and support our clients through difficult economic times. On behalf of the Firm, thanks for all of your efforts this year. Consistent with our existing compensation structure, associates in good standing who have worked 2000 creditable hours during the measuring period (which includes chargeable hours, firm’s own account hours and creditable non-billable hours) are eligible for bonuses. We will be paying full share bonuses consistent with our 2008 bonus schedule attached below. These bonuses are subject to discretionary adjustments based on quality of work, client service, business origination, contributions to pro bono, recruiting and other activities that contribute to the success of the Firm. Based upon input from PGLs, PAs and supervising attorneys, we have also awarded a number of discretionary bonuses to associates who have not met the 2000 hour threshold, but who have met guideline hours and have significantly exceeded expectations by making contributions in other areas. Bonus determinations for Sr. Attorneys and Special Counsel are made on a case by case basis.

Each of you will be receiving notification of your individual bonus from your PGL or PA. If you have questions, feel free to contact your PGL, PA, Bob Neufeld or me. The bonuses will be paid on Wednesday, December 31. We will also distribute a chart listing the distribution of bonuses by dollar amounts at each class level.

Consistent with historical practice, we will be reevaluating our bonus structure and will be discussing potential changes with our Associates Forum. As you are all no doubt aware, many changes are taking place in the legal industry and the economic challenges and uncertainty will continue into 2009. We will evaluate all of these factors and expect to announce our 2009 schedule in March or April, 2009. On behalf of the Firm, thanks again to all of you for all you do to contribute to the continued success of the Firm and our continued strength in these challenging economic times. Best wishes for the New Year.

SHEPPARD MULLIN CA/DC BONUS MEMORANDUM

From: Robert Beall

Sent: Tuesday, December 30, 2008 1:18 PM

To: LA-ASSOC; DC-ASSOC; CC-ASSOC; OC-ASSOC; DM-ASSOC; SD-ASSOC; SF-ASSOC; SV-ASSOC; SB-ASSOC

Subject: 2008 Associate Bonuses

To All California/DC Associates:

We will be distributing our annual associate bonus checks this week. As you all know, 2008 has been a particularly challenging year for the legal industry and our clients. As a result of all of your valuable contributions, we’ve been able to manage these challenges and support our clients through difficult economic times. On behalf of the Firm, thanks for all of your efforts this year. Consistent with our existing compensation structure, associates in good standing who have worked 2100 creditable hours during the measuring period (which includes chargeable hours, firm’s own account hours and creditable non-billable hours) are eligible for bonuses. We will be paying full share bonuses consistent with our 2008 bonus schedule attached below. These bonuses are subject to discretionary adjustments based on quality of work, client service, business origination, contributions to pro bono, recruiting and other activities that contribute to the success of the Firm. Based upon input from PGLs, PAs and supervising attorneys, we have also awarded a number of discretionary bonuses to associates who have not met the 2100 hour threshold, but who have met guideline hours and have significantly exceeded expectations by making contributions in other areas. Bonus determinations for Sr. Attorneys and Special Counsel are made on a case by case basis.

Each of you will be receiving notification of your individual bonus from your PGL or PA. If you have questions, feel free to contact your PGL, PA, Bob Neufeld or me. The bonuses will be paid on Wednesday, December 31. We will also distribute a chart listing the distribution of bonuses by dollar amounts at each class level.

Consistent with historical practice, we will be reevaluating our bonus structure and will be discussing potential changes with our Associates Forum. As you are all no doubt aware, many changes are taking place in the legal industry and the economic challenges and uncertainty will continue into 2009. We will evaluate all of these factors and expect to announce our 2009 schedule in March or April, 2009. On behalf of the Firm, thanks again to all of you for all you do to contribute to the continued success of the Firm and our continued strength in these challenging economic times. Best wishes for the New Year.

In Akin’s memo below, it says it’s “reviewing 2009 associate and counsel compensation,” and will make a decision soon. (Freeze watch in effect.) Per our tipster:

There is a lot of push for not freezing since Akin is doing very well even with the slowdown. There are a lot of rumors of what the bonuses will be. In previous years, we had to write memos in the DC office to explain why we deserved a bonus. Supposedly, we are going to a hours based bonus but that is up in the air.

AKIN GUMP NON-NYC BONUS MEMORANDUM

Consistent with past practice, the Firm is pleased to announce that we will be awarding merit bonuses to associates and counsel in January. Merit bonuses will be awarded to associates in good standing who have met the Firm’s expectations for productivity, quality of work and Firm citizenship. We will be making merit bonus decisions shortly and bonuses will be included in the last payroll in January, 2009.

We are also in the process of reviewing 2009 associate and counsel compensation and expect to finalize our decision in early 2009.

Happy New Year!