A couple of weeks ago, we reported on the Vinson & Elkins bonus payouts. At the time, we noted that associates in New York were generally pleased with the payout, but associates in V&E’s Texas offices — notably, the firm’s Houston office — were not at all happy with their bonuses.
The issue appeared to be that V&E Texas associates didn’t receive a “make-whole” bonus. Some firms have followed Latham & Watkins’s lead and are using the bonus to give back the money that associates lost during last year’s salary freeze.
A couple of days after our post went up, Above the Law started to receive some interesting emails from Vinson & Elkins people in Texas. Here’s an example:
The partners realized they had screwed up and are making good by the associates, giving additional bonuses in the coming weeks. Top performers in Houston will end up making MORE than their counterparts in NY on the full Cravath scale (for the second year in a row). Pretty impressive that they are willing to admit their screw up and fix it quickly.
And it’s true. Instead of sticking to a decision many associates felt was unfair, V&E changed course and put more money on the table.
Details on this reversal of fortune after the jump.
Vinson & Elkins’s managing partner, Joseph C. Dilg, explained why V&E revisited its bonus paymernts:
After Vinson & Elkins originally announced bonuses under its merit bonus program, I met with our Associate Advisory Committee and learned that some of our associates, primarily in Texas and Washington DC, felt our bonuses did not meet expectations given that our partners had a much better than anticipated year financially in 2009. While we felt the bonuses originally paid were fair and compensated our associates at or near the top of our respective markets we realized that expectations may have legitimately been higher and that the markets outside of New York were more opaque this year as to the competitive level of compensation. We have therefore paid supplemental bonuses in all of our offices to associates receiving merit bonuses and we believe not only have expectations been fully met but that our associates have clearly been compensated fairly in all of our markets. It remains a strategic priority of the firm that we be able to recruit, retain and develop the best lawyers practicing in each of our markets.
That is some real live good news — and not just for associates working at Vinson & Elkins. It should be a statement to all Biglaw firms out there who are trying to be cheap about associate compensation while partners are posting strong (sometimes record) profit numbers. There are firms who are willing to pay money in order to keep and attract talented associates. As the lateral market continues to loosen up, firms that try to keep salaries depressed will not be forgotten.
Good job by V&E to do right by its people in Texas and D.C. And congratulations to those associates who are once again making market salary.
Earlier: Vinson & Elkins Raises & Bonuses: New York Happy, Texas Sad