Last month, associate bonuses were announced at the super-elite firm of Munger, Tolles & Olson — aka the West Coast home of The Elect, with about two dozen former SCOTUS clerks lying around. The firm is well-known for its exceedingly high hiring standards and intellectual (if somewhat nerdy) atmosphere.
One would expect a firm as picky as Munger to reward its recruits handsomely. But word on the street is that some MTO associates, unlike their counterparts at Irell & Manella, are not pleased with their 2009 bonuses.
Munger didn’t have lockstep in the past, but this year they decided to have it for first-year associates (from the class of 2008). Those associates received $5,000, below the market rate of $7,500. Second-year associates, i.e., class of 2007 graduates, received bonuses between $7,500 and $10,000, at or below market. (But note that Munger makes 3% contributions to some associates’ 401K plans, which most firms do not these days.)
The firm memo provides official ranges for bonuses. One tipster claims the ranges are somewhat misleading because most people received bonuses on the low end and very few receive bonuses on the high end, but we have not verified this.
The complete MTO memo, plus added explanation for associate discontent, after the jump.
This associate explains why the natives are getting restless:
The “funny” thing is that the firm is doing very well financially. The biggest department, by far, is litigation and (like in other firms) it does not suffer from “the global economy” as much as other departments. The corporate department is also quite busy recently. Overall, as far as we know the firm is doing very well, and so “the economy” cannot explain why the bonuses are so low and certainly why they are below market.
Or maybe the firm is not doing well at all, and that is the way to let us, the associates, know about it? Anyway, while a few associate are not very surprised, everyone is unhappy.
We’ve heard similar complaints about other firms of high prestige that are weathering the downturn relatively well. E.g., Kirkland (see the update at the end). But try looking at this from the partners’ perspective: Given the state of the lateral market for associates, which shows signs of life but is still weak, what’s the point of paying generous bonuses?
The full memo appears below.
Earlier: Associate Bonus Watch 2009