Associate Bonus Watch: Morgan Lewis Announces Bonuses With Special Reductions for Tardy Time-Keepers
We have been waiting a long time to get a look at the Morgan Lewis & Bockius bonus structure. The firm announced way back on October 30th that it would be delaying their bonus decision until the market settles.
Since then, the firm has found time to institute a salary freeze and fire maybe as many as 50 associates.
Now that the bonus information is finally in, the results are somewhat anticlimactic. Individual memos are out at Half-Skadden levels.
But the real news from MLB is contained in this little memo that went out on Friday night:
Most of counsel and associates have had discussions by now with respect to annual evaluations, so this is a good time to remind lawyers of our policy with respect to taking late time-recording into account when we determine bonus amounts. For the year just ended, there were 55 lawyers whose bonuses were affected by their unexcused late time entries. The impact was larger for repeat offenders.
Ouch. I supposed this is a “good time” to remind lawyers about how late time keeping can affect the year end bonus. Let’s hope that Morgan Lewis also reminded people at the much, much better time — which would have been before people lost money for being tardy with accounting.
Tipsters weigh in and the full Morgan Lewis email after the jump.
Just so everybody is clear: it is okay for Morgan Lewis to delay associate bonus announcements longer than they ever have before. It is okay for Morgan Lewis to delay a salary increase that they promised twice (once arguably when people were hired and saw the “pay scale,” a second time back in October). But it is not okay for associates to be late entering their time.
Entering your time on-time is critical, especially in a market where firms are desperately trying to collect from delinquent clients. But does the punishment here fit the crime? Our tipsters don’t seem to think so:
Considering that a lot of associates didn’t make their hours and thus received no bonus, 55 is a pretty high number of associates to have their bonuses docked for late time entries.
Some of the associates we talked to that had their bonuses docked claimed that they missed the monthly time entry deadline by an hour or so a couple of months out of the last year.
How much did this epidemic of late time entry cost MLB? And how much did the firm save from associate bonuses?
Read the full firm email below.
MORGAN LEWIS & BOCKIUS — MEMO — TIME ENTRY
Most of counsel and associates have had discussions by now with respect to annual evaluations, so this is a good time to remind lawyers of our policy with respect to taking late time-recording into account when we determine bonus amounts. For the year just ended, there were 55 lawyers whose bonuses were affected by their unexcused late time entries. The impact was larger for repeat offenders.
I won’t reiterate all of the reasons why it is important to record your time in accordance with our policy. However, as we start a new calendar year, I thought it was important to remind you that failure to comply with the policy can affect your bonus eligibility.
Also, remember that Monday, February 2, is not only Groundhog Day but also the deadline for recording all January time (first business day after the end of a month). Please get your time in by the end of that day.
Earlier: Nationwide Layoff Watch: Morgan Lewis Lays Off Associates. Numbers Could Reach 50
Prior ATL coverage of associate bonuses
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Comments
blah blah my time is always on time
"institute" a salary freeze, not "instituted" a salary freeze.
"They still call it the White House, but that is a temporary condition."
Does it really matter if time is entered timely as long as it is billed to the client and the client pays? These arbitrary deadlines are worthless.
Who's "Moran Lewis"?
Good catch 4. Elie, you are a professional writer. Act like it. This site is an absolute disgrace now.
Did first years get a bonus? Up the street at Dechert they did.
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2 = EPIC FAIL to make me laugh.
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3 = law student. It matters to the client, douche.
3 -
$1.00 I have in my pocket today is worth more than $1.00 I have in my pocket tomorrow. When you're talking about a million dollars and the costs of having to borrow money, the difference between money in hand today and money in hand a month from now becomes dramatic.
I really hope you have no responsibility for finance in your job or your home life. Understanding the TVM should be a mandatory requirement of college, let alone law school.
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The real question is how big the penalty was for the late time entries. A number of firms have threatened such penalties, but I think this is the first time it's actually happened.
Month-end time charges matter because late end-of-month time gets pushed into the next billing cycle, a month later. The bigger issue than the time value of money is the fact that clients don't like old time suddenly appearing on bills.
Law firms are businesses. A lax attitude about timely billing indicates a serious lack of understanding on how the system works. It also does not bode well one's reputation as a team player and overall reliability. Try running your own business that way, then you will get it.
Great White, Hammerhead, Tiger, Mako, Nurse etc. This site has jumped them all.
Megalodon excrement.
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slow news day I guess.
This is such a stupid post. MLB has always had monetary penalties for failing to enter your time. This is the basis for a firm's revenue so it's, um, important.
Agreee with 20. This has got to be one of the slowest news days since the holidays. Isn't there a V50 layoff to report?
10 & 11, I'm not 3, but I understood 3 to be assuming (perhaps correctly and perhaps not) that the bonus penalties go into effect for, e.g., missing daily or weekly entries. Because clients don't get billed daily or weekly, such tardiness would actually be meaningless (and would go entirely unnoticed) to clients. It's unclear from Elie's post what MLB's "time entry policy" is, and whether it defines "late" as missing a monthly release (which would matter to clients) or something more stringent (which wouldn't). My old firm required daily release. My new firm only cares about the end of the month.
Lat - check out PHJW - I have confirmation of layoffs, all under the radar. None of the affected can discuss since a waiver and release is required in order to collect severance.
I ask cause i'm not sure:
Does anybody write real posts anymore?
slow news days are few and far between - i am guessing there will be a ton of layoff news to report in the next few weeks (but it would be awesome if i were totally wrong on this)
25 = Kanye
This site is over-moderated.
Check your facts ATL. This is nothing new. For some reason, this is being portrayed as a new policy. MLB has always had a hardline on time entry and it is very clearly laid out time and time again. This most recent e-mail is in line with prior correspondence on the subject. In the current environment, it is little wonder the firm is seeking to enforce it , given that clients are already slow-paying and reluctant to cover stale time. Much like the bogus "layoffs" story recently posted, someone has decided to portray MLB news (or lack thereof) with a very negative slant.
#28 - Which MLB office do you work for?
28 = MLB partner Bud Selig.
Late timekeeping is also a red flag for fraudulent time. If one has failed to keep accurate, contemporary time records, one would have to recreate what they did on a particular day weeks ago. Because bonuses are often higher when one bills more hours, associates who have to recreate time records often overestimate their hours to ensure more money in their pockets. I've seen it first hand and am sure its prevalent.
30, that was awesome.
@23 - Some guys at my high school required daily release, others only at the end of the month, it was no big deal.
-FRAT STUD
Before last week, MLB only enforced penalties associated with late end of month time entries. But, to many people's surprise, even mid-month entries incurred a penalty. And, no, there was no notice of this "change." It's one thing to say that it's always been a firm policy, and quite another to say that it's one that has never been enforced, and then enforce retroactively. People lost up to several thousand dollars for time entries that were late to the firm, but not the end of month client bill. Just another way for MLB to make money off the associates, since MLB didn't lose any money for the late mid-month time entries. PS - If you are at a closing or in trial and don't get your time entered by the deadline, too bad - it's no excuse. They'd rather have you sitting at your desk entering time than actually out doing something lawyerly.
if associates are so slow with work, what possible excuse is there for not getting time done. its a business for god's sake. try and act like a professional.
A firm institutes a simple rule (get your time in by the end of the month) and enforces it (or your bonus will get docked). An associate (or associates) who didn't follow this simple rule complains to abovethelaw. How about next time you just go ahead and get your time in? I know it's tough, but you're getting paid between180K and 350K to work 2,000 hours of which 1,900 could be done by the average 8th grader. That way you can 1) keep your partners happy 2) keep your clients happy 3) keep your firm's name off of this gossip-starting website.
next step for ML Lawyers? http://bettyconfidential.com/ar/ld/a/moving_forward_after_a_layoff.html
36 -- It all depends on the details. MLB's memo suggests that people just had to get their time entered by the end of the month, which is totally reasonable.
Several comments, however, suggest that MLB is docking people who failed to enter time after each business day, which has zero effect on billing and is totally retarded.
In my time as an associate, I kept my time by sending myself emails (e.g., "client x -- .75 t/c"), writing some entries down on notepads during calls in other peoples' offices, and putting other entries directly in my diary. My system worked pretty well (always within .25 to .5 of an hour every time that I forgot I had had already given my secretary a diary ticket and I completed another one at the end of the month, which happened at least 2 or 3 times a year).
I always got my time in by the monthly deadline (almost always entered in the last two or three days - I loved my secretary). Nevertheless, I would get comments during my reviews that my diaries were late because the firm required a diary immediately after every business day.
Piss on that.
No need for daily billing is the best apart about being in-house.
First to be offended by the number of moderated comments, as well as all of those which haven't yet been moderated
31 - Nice logic. Did you consider that sometimes that lawyers who are the busiest bill the most time and thus earn the largest bonuses. These are the same people who would be too busy to record their time by the daily or weekly cutoff.
This whole situation sounds like it was poorly handled by a notoriously cheap firm. If an associate's late billing results in writeoffs, then dock associates based on the percentage of their time that must be written off. Under the current system, the partners get to bill clients the full amount and take more money from the associates who billed 2000+ hours.
23, don't defend 3's naïveté. In addition to bills, firms also have to provide periodic accruals and estimates to clients. Douchebags who don't get their time in when they're supposed to mean we underrepresent the figures to the client, who is then pissed off when the bills exceed expectations (and when don't they?).
another cheap-ass firm run by millionaires. wtf.
41, you sound like managemant at MLB.
Why don't you flat fee the work and avoid billing by the hour? I guess it would cut into those profitable hours your associates are churning out on meaningless document review projects.
Totally appropriate to have penalties for later time entries. I cannot BELIEVE there are 50 lawyers who couldn't get their time in on time. That's ludicrous. I know several people who work there. They don't seem like idiots. But that makes me question it.
Not new. Did the same thing last year.
Not terribly on topic, but billing a lot =/= valuable.
Billing a lot and having said billed time collected = valuable.
I saw a 2500+ biller get shit laid off as his 2500 was reduced to 1200 on collections (decent guy, just not too bright and not that good a lawyer - hard worker though)
I completely agree with this policy. Not being able to get your time in is pathetic, and it directly impacts client budgeting, the ability of the firm to predict workloads, and obtain lines of credit to meet payroll. I don't think all associates are aware of how much more difficult and expensive it is to get lines of credit than it was a few years ago.
A few points.
1. A friend told me a few years ago that PHJW docked people for late time. Not sure if it was systematic or just against a couple of serious offenders. Hence I don't think MLB's policy is unusual.
2. Some comments indicate that MLB has previously disclosed the policy. I'll bet that each associate whose bonus was docked feels that the disclosure wasn't good enough.
3. As some noted earlier, late time entry is a red flag for fraud/overbilling, so insurers are really vigilant about that and hence insurance premiums go up for firms if they are not vigilant in enforcing time entry policies.
4. Managing a large firm is very difficult without time entry deadlines. They might seem arbitrary, but they are necessary. (No, I'm not a managing partner.)
5. Some firms withhold partner draws for late time. For some the withholding is for a month or more. (!) Firms are not allowed to do that to associates because it is against the law.
Looking good Lewis!
Feeling good, TTTodd!
My frim: $5 for being late each week and $50 for the monthly deadline, all from the discretionary bonus. Is this comparable to other firms?
MLB might be the cheapest supposedly top firm around.
It's core practice areas are very low margin, like employment, so they have to really squeeze their associates/staff. Terrible place to work. I know. I used to work there.
Any associate layoffs announced? I know of a few paralegals who were just let go. Who's next?
A daily time entry requirement seems excessive, but once a week doesn't really seem like too much to expect in a business model where revenue is completely tied to billable hours. Although I agree that a firm probably will not fall apart if people don't observe mid-month time entry deadlines, I wouldn't want to be on the list of associates who routinely ignores them. I have missed a deadline occasionally when I was particularly swamped, but would definitely not push it in the current economic environment.