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Sonnenschein: Top Bonuses For Top Performers, Salary Freeze For All

Tuesday, January 6, 2009 4:10 PM - By Elie Mystal

law firm associate bonus watch 2008 biglaw bonuses.jpgSonnenschein is the latest firm to adopt a creative approach to associate compensation during the financial crisis. The firm announced bonuses that can go much higher then their peer firms, but also announced a salary freeze.

First the bonus news:

We are pleased to announce that Associate productivity bonuses for 2008 range from $10,000 to $70,000. The Policy and Planning Committee has approved the attached bonus schedule which, as we have discussed during recent Firmwide Associate meetings, remains unchanged from last year and includes a step up for seniority. These bonus levels will result in some of our Associates receiving significantly higher bonuses than their peers at many of the firms with whom we compete for talent and clients, and reflect our strong belief that it is important to recognize and reward our most productive Associates.

You don’t often see a firm go the “significantly higher bonuses than their peers” language. Clearly, Sonnenschein wants its people to know they are valued.

However, no firm is an island in this economic storm. The salary freeze reflects that reality:

With respect to our Associate salary schedule, Policy and Planning has concluded, after consultation with our Practice Group Leaders and Office Managing Partners and consideration of marketplace and client factors that, effective January 1, 2009, Associates moving to the next class year in 2009 will continue to receive the same base compensation as they did in 2008.

As with Quinn Emanuel, the top bonuses are available for highest billers. But, if you were a top biller, the extra bonus offsets the lack of a pay raise.

But perhaps the larger point here is that every firm needs to come up with individualized answers to the economic client. Sonnenschein laid off 25 attorney, acquired 100 Thacher Proffitt attorneys, is paying very high bonuses to associates who bill more than 2450 hours, and is freezing associate salaries. Put another way, Sonnenschein is just another entity trying to navigate through the new economy as best it can until things settle down.

Read the full memo after the jump.

SONNENSCHEIN — MEMO — ASSOCIATE BONUSES AND SALARIES

We are grateful to each of you for your many contributions to the Firm, including the time and
passion you invest in our clients, your engagement in the Firm’s diversity and pro bono initiatives, and your commitment to enhancing the communities in which we live and work.

Today, the Firm is announcing Associate productivity bonuses for 2008 and Associate compensation for 2009. Despite the global economic turmoil that has affected all sectors of the
legal industry, Sonnenschein is positioned to grow and thrive in 2009 and beyond. We have
aligned our capabilities and teams to meet projected client needs in the new economy, invested in diverse practices and client teams, and continued to focus on the creation of opportunities for
Associate training, mentoring and career advancement.

2008 Associate Bonus Program

We are pleased to announce that Associate productivity bonuses for 2008 range from $10,000 to
$70,000. The Policy and Planning Committee has approved the attached bonus schedule which,
as we have discussed during recent Firmwide Associate meetings, remains unchanged from last
year and includes a step up for seniority. These bonus levels will result in some of our Associates receiving significantly higher bonuses than their peers at many of the firms with
whom we compete for talent and clients, and reflect our strong belief that it is important to
recognize and reward our most productive Associates. Full time, on track Associates who meet
productivity levels will be paid bonuses with the end of January payroll according to our usual
schedule.

2009 Associate Salaries

With respect to our Associate salary schedule, Policy and Planning has concluded, after
consultation with our Practice Group Leaders and Office Managing Partners and consideration of
marketplace and client factors that, effective January 1, 2009, Associates moving to the next
class year in 2009 will continue to receive the same base compensation as they did in 2008.
After the first of the year, as in the past, you will receive a memo with your individual base
compensation.


As you well know, 2008 has been the most challenging year for law firms in many decades.
Lawyers and professionals at every level in the Firm — and in our peer firms — have been impacted by the economic turndown. However, our prudent financial management and
discipline in executing our strategic plan has allowed us to continue to attract and retain
outstanding lawyers and capitalize on growth opportunities.

Our vision is to create an environment that inspires the talent and clients that continue to fuel
Sonnenschein’s success. Over the past year, 65 exceptionally talented and profitable partners
made the decision to bring their practices to Sonnenschein, and they are a key part of our
strategic expansion. In the last two years, we’ve added four new offices — Charlotte, Dallas,
Silicon Valley and Zurich — and grown both historic and new practices and offices. We will
dramatically enhance our national and international transactional and finance capabilities with
the addition of approximately 100 partners and associates from Thacher Proffitt on January 1st.

As the world has changed, we have adapted accordingly. We appreciate your continued commitment to our clients and the Firm, and look forward to a strong 2009.

Chicago, Dallas, DC, NJ, NY, SF, LA, SV and PHX
2008 Bonuses to be paid in 2009

Creditable Hours Bonuses

Class 2050 Hours 2150 Hours 2250 Hours 2350 Hours 2450 Hours
2001+ $25,000 $34,000 $44,000 $56,000 $70,000
2002 $25,000 $33,000 $42,000 $53,000 $65,000
2003 $25,000 $32,000 $40,000 $50,000 $60,000
2004 $20,000 $27,000 $35,000 $45,000 $55,000
2005 $20,000 $26,000 $33,000 $41,000 $50,000
2006 $15,000 $21,000 $28,000 $36,000 $45,000
2007 $15,000 $20,000 $25,000 $32,000 $40,000

Earlier: Prior ATL coverage of associate bonuses
Prior ATL coverage of salary freezes

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Posted in: Associate Bonus Watch 2008, Salary Freeze, Sonnenschein

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