Associate Bonus Watch 2009, Patton Boggs, Salary Cuts, Salary Freeze

Associate Bonus Watch: Patton Boggs and the D.C. Market

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Yesterday we reported that Patton Boggs was having an all associates meeting and wanted its people to be there in person.
With everybody gathered around, Patton Boggs unleashed a torrent of news. First things first. Here’s the bonus announcement, from a statement the firm released to Above the Law about the meeting:

As usual, we are rewarding associates who exceed their billable hour goal with our annual bonus program. Bonuses will range from $5,000-$45,000 depending on class year and the number of hours by which an individual target was exceeded.

In addition, the firm plans to offer merit bonuses in January as part of the associate evaluation process.

Well, the New York market starts at $7,500, so the low end of the Patton Boggs scale is below the bottom of the NYC scale. But at the top end, Patton Boggs is paying more than the Cravath scale.
It is worth noting, of course, that Cravath and other top New York firms pay bonuses to everybody, not just those who “exceed their billable hour goal.” In this market, is anybody actually billing anything like 2400 hours? It could be that Patton Boggs’s big top number is a payout only a couple of people will actually receive.
And the bonus news was the good news to come out of the meeting. The other news is after the jump.


It’s been a while, but I’m assuming regular Above the Law readers still know what we use the image on the right for. If you exceed your billable hour targets, you get a bonus. But if you are far below your target, Patton Boggs is cutting your salary:

We are reducing salaries for a small number of lawyers, public policy advisers and patent agents who have not met their targeted goal. This amounts to 21 out of 272 people in nine offices.

Associates and legal professionals who are materially off their targeted billable hours (including pro bono and management direct tasks such as loss prevention) will receive a salary reduction effective December 4, 2009. Those who missed their target by 500 or more hours will see a 20 percent reduction in salary. Those who missed their target between 300 to 499 hours will receive a 10 percent reduction.

So Patton Boggs dealt with the top billers. It dealt with the low billers. What about everybody in between?

The 2009 associate salary scale (2008 frozen) will not change.

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For those playing along at home, this means that first-years, second-years, and third-years now all make the same amount of money ($160,000). People heading into their third year at the firm haven’t seen a raise since they’ve been at Patton Boggs.
But third-year associates are presumably getting billed out to clients at a higher rate than first-year associates. Apparently the freeze only applies to associates, not clients.
(In fairness to Patton Boggs, this may turn out to be the case at other firms as well. Stay tuned.)
If Patton Boggs had slashed first-year salaries, it could have had a problem with recruitment. But will taking the cost savings out of third-year paychecks result in an associate retention problem?
In any event, this is our first glimpse into what bonus season in D.C. could look like. We’ll have to see if other firms follow along.
Read the full Patton Boggs statement below.
PATTON BOGGS — STATEMENT — ASSOCIATE MEETING
The vast majority of our associates are on track to meet or exceed their billable hour expectations. This is a testament to their commitment and we appreciate their hard work during these challenging economic times.
We have worked hard to prevent lay offs. We continue to hire new talent, bolstering the firm’s presence in each of our nine locations. Our new associates started in October without any deferrals.
As usual, we are rewarding associates who exceed their billable hour goal with our annual bonus program. Bonuses will range from $5,000-$45,000 depending on class year and the number of hours by which an individual target was exceeded.
In addition, the firm plans to offer merit bonuses in January as part of the associate evaluation process.
The firm believes that it is important to distinguish and reward associates who have worked hard to meet expectations, particularly in these times.
We are reducing salaries for a small number of lawyers, public policy advisers and patent agents who have not met their targeted goal. This amounts to 21 out of 272 people in nine offices.
Associates and legal professionals who are materially off their targeted billable hours (including pro bono and management direct tasks such as loss prevention) will receive a salary reduction effective December 4, 2009. Those who missed their target by 500 or more hours will see a 20 percent reduction in salary. Those who missed their target between 300 to 499 hours will receive a 10 percent reduction.
As has always been our practice, if an individual exceeds their targeted billable goal, the firm will pay the difference.
The 2009 associate salary scale (2008 frozen) will not change.
Earlier: Patton Boggs Mystery Meeting at 2:30

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