For starters, unlike other top firms, Boies is paying bonuses to first-year associates from the class of 2009. According to Phil Korologos, a partner in the firm’s New York office:
First-year associates who started after September 1, 2009 will receive a $5,000 year-end bonus. First-year associates who started prior to September 1, 2009, will receive the greater of $5,000 or their performance-based bonus.
Performance-based bonuses at the firm can be quite high, depending on how hard you work and the types of cases you work on (contingency or non-contingency). As a result, bonuses at Boies are individualized, not lockstep; there’s no magic number for each class year. The firm provided Above the Law with the high end of its bonus ranges:
For associates after their first year, the amount of their bonus is based on performance. The performance based bonuses for rising second-year associates range as high as $70,000.
The performance based bonuses for associates beyond their second year range as high as $150,000.
Six-figure bonuses? Now we’re getting into Wachtell territory — or beyond (since we suspect Wachtell bonuses will be down quite a bit this year).
Check out the complete Boies salary scale, plus learn more about how their bonuses are calculated, after the jump.
Partner Phil Korologos provided us with the following information about associate base salaries for 2010:
The firm has increased its starting salary for first-year associates to $174,000. The firm’s base salaries for classes higher than first-year associates are as follows:
Class of 2008: $192,000
Class of 2007: $210,000
Class of 2006: $228,000
Class of 2005: $246,000
Class of 2004: $264,000
For classes higher than the class of 2003, increases above $264,000 is determined individually.
Compare this to the standard NYC market scale (assuming no salary freeze): 160-170-185-210-230-250.
One thing to keep in mind: the Boies Schiller compensation system is non-lockstep, and therefore carries with it some degree of risk. Firm founder David Boies likes to gamble — he just bought a new condo in Las Vegas, which he visits regularly — and presumably his acolytes should like risk too.
There’s a concise explanation of the BSF comp model over at Chambers Associate:
Associates were proud of BSF’s compensation structure: they love the slightly above-market pay scale… and the bonus system in which the amount you get “ultimately flows from how many hours you’re billing.” Total compensation is roughly 30% of what is billed (adjusted to eliminate variations in associate compensation that would result from alternative fee arrangements or other factors such as premiums or discounts): subtract the base salary from that amount and you have your bonus for the year.
It lacks the guarantee that comes with a lockstep system and it comes with inherent risk, but our interviewees preferred an arrangement where someone billing 3,000 hours is more generously rewarded than someone billing 2,100. “You have the opportunity to make a lot more money than first-year associates at other firms,” said one. “From a morale perspective, if you’re here at 2am and at the weekend you know that’s making you more money. That has a positive effect.”
Here’s a simple example. Take a class of 2007 member earning a base salary of $210,000 (per the table above). Let’s say this associate generates $1 million in revenue for the firm over the course of the year. At year end, this associate would be entitled to $300,000 in total compensation (30 percent of $1 million). Since the associate received $210,000 in base compensation over the course of the year, he’d be entitled to a $90,000 bonus — three times the top bonus on the Cravath scale (paid to class of 2002 associates).
We’re guessing that BSF, which moved up 16 spots in the most recent Vault rankings, will continue its rapid ascent. In a difficult economy, it apparently pays to litigate (and to do a mix of plaintiffs’ and defense work, as Boies does).
Congratulations to Boies Schiller associates on their fabulous compensation. It’s nice to be able to report happy news in sad times.