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.
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:
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!
(59) Comments
Comments
Pretzels
farthead
any news on irell's bonuses?
I kinda wish I worked at Sheppard Mullin after getting screwed by Kirkland.
--K&E DC Associate
reduced bonuses and layoffs were so last year.......
reduced bonuses and layoffs were so last year.......
Yes, breaking news: Irell's bonuses think they are better than the other bonuses, but in fact, they are just the ugly, nerdy version of other bonuses.
By the way, how many Irell attorneys actually attended band camp?
IceMiller owns all you fools.
*Lat lowers himself onto Elie's huge black rod, which he has nicknamed "the law."*
*Lat lowers himself onto Elie's huge black rod, which he has nicknamed "the law."*
I wonder about these tipsters. I work at Akin DC, and I haven't really noticed people sitting around trading rumors about bonuses. Am I out of the loop, or are ATL tipsters an odd breed?
Pro Boning Sheep > frozen Latham Kabob.
@11 If you can't spot the odd man out after 3 years in the firm, you are the odd mad out.
Re: A&P - the first paycheck of the year remains at 2008 levels because it pertains to work done in 2008. The "tipster" doesn't sound like someone who is familiar with pay periods.
AG DC is going to totally screw over the associates.
Just you wait.
For years now, they had well-below market bonuses, because the bonus pool and the bonuses were going to be the same, in good years and in bad.
Well, we just got through the good years. Now into the bad. I will be so interested to see if AG DC bonuses are at the level of years past.
12 = obvious racist
14 - "Re: A&P - the first paycheck of the year remains at 2008 levels because it pertains to work done in 2008. The 'tipster' doesn't sound like someone who is familiar with pay periods."
Do you work at A&P? If you don't, how would you know what their pay periods are? If you do, I suggest you add up your 2008 paystubs.
"U.S. buyout firms raised $233 billion for new funds in 2008, according to data released today by our sister publication Buyouts Magazine. This represents nearly a 22% decline from 2007 totals, and could be even steeper once fund size cuts from firms like TPG Capital are taken into account. "
http://www.pehub.com/
where's the butt cheeks guy?
Does anybody have any news about layoffs at Cahill Gordon?
BITCH SPREAD THE...aw fuck I'm just not feelin it.
What's up with Cahill's non-announcement?
Any word on the Quinn Emanuel stealth layoffs?
ATL - what's going on with Cahill?!?!?
I have the same question as 23.
What's going on with FISH & RICHARDSON???
what about cahill? have they announced?
ATL--what's going on with Sonnenschein?
ATL--what's going on with Sonnenschein?
On good authority there are no layoffs at Cahill Gordon!
As an associate at Akin Gump, all I can say is...
THIS IS EXCELLENT NEWS FOR JOHN MCCAIN!
What's going on with Cahill Gordon?
I'm an Akin DC midlevel. It's a huge office, so there's no official line of chatter about bonuses. The folks I routinely talk to about compensation seem to buy the line given by Bruce M., the global chairman, and Kim K., the new U.S. head, that the firm is doing much better than its peer firms in withstanding this downturn. We truly are industry leaders in the countercyclical practices that are currently thriving (i.e., bankruptcy, general lit, white collar investigations, lobbying).
With that being said, we'd like to see the firm go out on a limb and signal that it's doing well by (1) raising associate pay with elevation of class year, and (2) giving a somewhat decent bonus to non-NYC associates.
Now I'll admit that Akin was never the place to get rich off of bonus money (and neither were the other "big" DC firms), but now is the time to distinguish itself at least somewhat. Either way, what Akin does now will not be forgotten by its associates or the larger legal community.
Wachtell
...
Skadden
Kasowitz
...
...
...
...
Cravath
SKADDEN TO 190!!!!!!!!!!!!!!!
Please update us about associate pay increases at firms like Cravath, Davis Polk, Paul Weiss, Kirkland. Are they increasing normally or freezing a la Latham?
Please update us about associate pay increases at firms like Cravath, Davis Polk, Paul Weiss, Kirkland. Are they increasing normally or freezing a la Latham?
36-37, wait your turn.
33 - Akin has never been a leader in compensation and never will be. They do what they have to do to stay afloat with their competitors. If there is a strong movement to freeze salaries, Akin will freeze salaries, regardless of the firm's financial performance. And don't buy all of what Bruce is selling. He's an eternal optimist that loves to pump sunshine.
I believe layoffs are coming to the top 5-8 firms very, very soon.
Our nation was truly fucked by bush/cheney. Thank God Obama is smart and a hard worker - we at least have a chance here with a Democrat in charge.
Ugh -- just got the announcement of no bonus AND a pay freeze. On the bright side, "probably" no layoffs until at least second half of 2010.
39, 33 here. I know, and I agree. Just wishful thinking on my part.
The point here is that Akin is also sensitive about it's standing as a "DC" firms because of its Texas roots. Despite the fact that its chairman, remaining named partners, largest office by far, hotshot partners (Dowd, Roberts, MacDougal, Jordan, Goldstein, etc.) all reside in DC, there's still a sense that AG doesn't quite belong in the catagory of biglaw DC firms.
Because of this insecurity, I think, Akin moves more quickly than, say, Hogan in following the trends of the other big DC players. THIS TIME THOUGH, I'd argue that Akin has to go out on a limb and clearly show that it's doing well when compared to what it views as its peer firms. I doubt it will do it; I think it will be a lockstep follower like in years past.
So that leaves the question of what Wilmer, Hogan, A&P, Covington et al will do this year. Truth be told, these firms are about as reluctant as Akin to disturb the pack and go out by themselves.
We'll be waiting in DC until June to hear anything concrete about bonuses or comp!
K&E DC
a) raised salaries
b) paid Cravath to those at class
c) paid Skadden to those above class.
Why do non-NY associates have to put in more hours for the same money than NY associates?
43, that's great, but Kirkland can't set market for DC. It's a fine firm to be sure, but not a DC market leader.
I think 43 was just responding to 4's retarded comment. Kirkland rose and once again exceeded market. It's just that this year the market was Cravath.
That being said, a 43 indicates, probably 10-20% of juniors (higher % among midlevels and probably a majority of nonequity partners) matched or exceeded Skadden's associates of the same class level
Cahill has been a 3-card monte game for a while. Their profitability has been driven by their lease -- they have a crummy, thread-bare office in a craptastic building on Pine Street -- literally they pay nothing for it (sort of like Sullivan -- but the Cahill partners were never smart enough to buy their own space). Their most profitable line of business, lev fin, died circa-2007. While they managed to attract a former SDNY USA, one suspects he was sold a bill of goods -- almost simultaneously they lost a major corporate rainmaker to DLA Piper, or Venable, or Jones Day, or one other of those anonymous, culture-less law firms.
47, you have no idea what you are talking about. Cahill does have a cheap lease that it renewed in 2002 and goes through 2020. I don't fault them for that (seems like a prudent business move to me). I don't think a cheap lease alone is enough to put their PPP in the top 10 for however many years running.
David Kelley joined Cahill because they let him head up an internal investigations and crisis management practice, whereas other law firms wanted to pigeonhole him into a white collar crime practice. Also, his wife is a former Cahill associate and had good things to say about the firm.
Meltzer left Cahill to head up DLA Piper's global corporate practice. He did not take a significant book of business with him.
48 loooooooooooooooooooooves Cahill
"Why do non-NY associates have to put in more hours for the same money than NY associates?"
Because NY associates are billed out a higher rate. Moreover, the cost of living in NY far outweighs all other cities. The real question is why Dallas where the cost of living is much lower and associates are billed at much lower rates are paid the same as NYC associates.
Why do people keep defending K&E? Fools. K&E met Cravath. Deal with it.
Now bill me some hours...biatch.
1. Sheppard Mullin just froze salaries, and they have like 4 NY attorneys, all of whom likely didn't make hours, so how about we call a spade a spade here. The firm is NOT being generous or paying above market.
2. Yeah, enough K&E deification. They met Cravath, like EVERYONE else in their right mind (don't pretend Skadden wouldn't have met CSM if CSM came out first).
3. Can't wait for firms' performance numbers to come out. Can. Not. Wait. S&C, Cravath, Davis, I bet you they all didn't do as good, and thus they are being frugal in this market environment. But, I bet you they still did better than everyone else.
out
From the DLA Piper comments:
True lockstep firms are the firms advancing salaries in step with class year (Cravath, Paul Weiss, Shearman, S&C, Simpson, Willkie, Milbank, Debevoise, etc.) These firms are probably doing better than the Latham's and DLA Piper's of the world (the first is a little surprising, the second, not so much).
Funny, seems like all the NY based firms I have friends at have upped salaries in normal course (even if they had layoffs), and iother markets that are freezing salaries. Will this be the start of a return to the pre-Gunderson days, where NYC paid more than the rest?
42 - Agree 100%. This presents a good opportunity for Akin to separate from the pack.
What's the story on bonuses in some of the larger Midwestern firms? Everyone's favorite Ice Miller, for example?
Reading ATL these days makes me effin' miserable.
50 - If you think the partners give a rat's ass about the cost of living in NYC and use it to determine salaries, you are the most deluded cock sucker who's ever smoked a pole.
The only thing that matters is billing rates * hours worked. That's the only fucking thing that any partner anywhere has ever or will ever care about.
53 - Not all firms outside of NYC are freezing rates. They are the outliers, but they get much more press. In CA, OMM and GDC are not cutting salaries, but that was barely a blip on Elie's radar, while the freezing/cutting firms generate hundreds of comments.
28/29: Sonnenschein has frozen associate salaries for 2009