For two weeks we’ve been getting reports about Paul Hastings bonuses. Many people claim that they received bonuses on par with the Cravath scale. But there have been a dedicated few who claim they were jobbed by the firm at bonus time. This tipster captures the general feeling:
PH bonuses were just announced [last month] and some crazy stuff has been going on. The top performers are getting totally screwed as PH has a bonus grid and is not allowing anyone to go off of that set chart. The result is that the best people with the strongest evals and tons of hours are getting barely any more different than their peers who did the bare minimum. There are some extreme and specific examples.
We’ve been able to solve the mystery. Paul Hastings gave out Cravath-level bonuses in all of their offices except Atlanta. In Atlanta Paul Hastings tried to match the Atlanta market for total compensation — which resulted in bonuses below the Cravath scale. The firm gave us details on its decision….
Paul Hastings pays $135,000 for first year associates in Atlanta. According to the firm, their overall salary scale in the Atlanta office is “at or above market” for the region. Since the firm contends it is paying more in base salary, the low bonuses still put its Atlanta associates at market level for total compensation:
We pay the prevailing market standard [in all of our offices]. In Atlanta for a few years we paid way above the market level.
This year’s PH bonus in Atlanta was between $5,000 and $7,400. A Paul Hastings spokesperson told us that originally the firm was going to pay less than that, but the firm reconsidered when it received additional market data in Atlanta.
The tipsters we spoke to were not impressed with the firm’s decision. Many tipsters report billing well over 2,500 hours, yet receiving a bonus that in some cases were 40% to 50% lower than peers at other firms.
In Atlanta the two biggest fish are King & Spalding and Alston & Bird. K&S recently unfroze salaries, but with significant compression on their scale. At the upper levels, Paul Hastings associates could be doing just as well as their K&S counterparts when it comes to total compensation.
But Alston & Bird has set the first-year salary at $140K and paid out Cravath style bonuses for those that hit their hours.
In any event, I suppose the associates in Paul Hastings’s other offices should be thrilled. In New York, L.A., D.C., and everywhere else, PH associates can trust Cravath to set their market compensation — instead of K&S and A&B.