Associate Bonus Watch 2009, Money, Salary Cuts, Skaddenfreude

Nixon Peabody’s Proposed Bonus Structure

Nixon Peabody logo.JPGWhen we reported on the salary cuts at Nixon Peabody, we mentioned that the firm would allow associates to make up some of the money come bonus time. Here’s how the firm explained the opportunity:

With our new levels of base pay in place, we will be introducing a bonus program that offers the potential of up to 30% of base pay based on firm and individual performance. We believe this innovative pay structure will reward our highest performing associates while lowering total compensation for those who perform at lower levels.

We’ve gotten a look at Nixon’s proposed “up to 30%” bonus structure. This hasn’t been finalized, but here is what is going around the office:
Nixon Peabody proposed bonus structure.jpg
Let’s break this down, after the jump.

Remember the criteria Nixon laid out for getting the firm’s discretionary bonus:

* High billable hours and demonstrated core competencies
* Extraordinary contributions to the welfare and advance of the firm, the individual’s practice group, and the office, and significant development of new business
* Significant financial contributions to the success of the firm, participation and contribution to the profitability of the practice
* Development and retention of new business from current clients and new clients
* Significant leadership and participation on firm initiatives
* Outside recognition or community activities that add to the reputation of the firm, including pro bono contributions.

A couple of things jump out from this proposal:
* 2,300 hours nets you 10% of your (recently reduced) base salary. That sounds painful.
* Will anyone ever get this magical 30% bonus that the firm proudly announced as an “innovative” policy? I mean ever?
* There is no discretionary bonus available to people who do not hit 2,000 hours. How do you reconcile that with the firm’s pay-for-performance rhetoric? Is the firm saying that it is impossible for a person to bill 1950 hours of superior quality?
Some of our tipsters feel this new policy really hurts top performers. No matter how many hours you bill, the firm has put in a completely subjective measure that can be used to job a person out of a large portion of the bonus. One tipster says that even “robot superstars” will be upset.
Other tipsters feel that the new policy really hurts average performers. “Extraordinary contributions,” “significant leadership,” and “outside recognition” don’t mean a thing unless you are eating hours. And even then, one less than enthusiastic review could potentially scuttle any discretionary bonus you thought you were getting.
Is anybody a winner at Nixon Peabody?
Earlier: Salary Cut Watch: Nixon Peabody Can, So it Did
Nixon Peabody: This Is Not a Love Theme Song

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