When you step into the killing lockstep zone, your bonus disappears into a black box. A while back, we reported that Bingham McCutchen adopted a lockstep-merit hybrid approach to associate compensation. Base salary would still be lockstep, but the bonus would be merit-based.
When we reported on the Bingham bonus, we noted that the firm intended to pay bonuses generally on the Cravath scale to its associates, based on a number of merit-based factors instead of hours.
But now our tipsters are telling us that some Bingham associates received much less than a Cravath-level payout:
A peek inside the black box, bonuses are generally well below the Cravath scale. The only associates receiving bonuses in the vicinity of the Cravath scale are those that exceeded the 2,100 hour minimum by a few hundred hours. Even bonuses in those instances were barely above the Cravath scale. Amazing considering JayZ just told the Boston Globe that the firm “had our best year ever.” Guess we know where all that money went. Morale is definitely at an all-time low. I would be shocked to see any associates making much of an effort to bill above the 2,100 hour minimum in 2010. I think “why bother” has become the most uttered phrase around the halls of Bingham over the last week.
But I suppose you could put Zimmerman’s positive outlook about the firm into a rap song …
As we previously reported, Bingham was on the firms featured in the Boston Globe last month for having strong profits per partner despite the recession:
Chairman Jay Zimmerman said Bingham’s success is a result of its focus on restructuring and insolvency work, a boom area during a downturn, and continued expansion in its offices in Europe and Asia. It also benefited from a merger with tax law specialist McKee Nelson in August, which boosted income.
“We’ve had our best year ever,” Zimmerman said. Still, “like most firms, we have been prudent in terms of our expenses.”
Boom in the down, restructure all my clowns
Boosting all my profiting, makin’ n****s frown.
It appears that some of the Bingham associates are learning what “prudent in terms of our expenses” really means:
Though there haven’t been any communications from management stating the ranges of such bonuses, it seems from my own experience and that of about a dozen other associates that Bingham has promised bonuses on average $2,500 (or more) below the Cravath scale. And these knock-downs aren’t hours based — my bonus was $2,500 below Cravath even though I billed just shy of 2400 hours (and I was told I received one of the better bonuses for my year), while another associate who was well over the 2100 hours threshold was given a bonus 50% below Cravath. I know of only one or two people who got “full” Cravath level bonuses — which I’m going to guess the firm is eventually going to trumpet as evidence that they paid “market.”
This would be understandable if Bingham were in rough shape. It’s not. The NY office (at least the litigation/bankruptcy) people have been swamped since the Great Recession started. Indeed, management — Chairman Jay Zimmerman included — routinely brag about how well we are doing and how well we our positioned due to our “counter-cyclical” practice. And it was just the other week that Bingham announced record PPPs.
All of which is to say that people are pissed. There is a meeting scheduled (I think) next week where associates get to pepper management with questions about this whole mess. Should be a good time for all involved.
We understand that the meeting is still on, so associates will have an opportunity to bitch in person.
See, once you move beyond a lockstep system, hours don’t matter nearly as much. In a true “merit-based” bonus system, the guy who eats hours isn’t necessarily the guy who gets the biggest slice of pie.
But not knowing what is expected of you to receive a large bonus payment is often the most annoying thing. From our tipsters, I have the impression that they’re not really raising a fuss over $2,500. They’re angry because they feel they don’t know what was required of them to get the extra money.
We reached out to Bingham about their distribution of bonus payments:
We designed our new merit-lockstep salary and bonus system this past year to better reward performance while compensating all of our associates fairly on a relative market basis. Given that this newly implemented process features a merit-based component, there is variability designed into our 2010 bonus scale, the median of which was aligned to the ‘Cravath’ model. The reality is that we had more associates eligible for and receiving bonuses this year, and roughly one-half of those associates received bonuses that were at or higher than the Cravath-level bonuses.
Does anybody want to comment on their better-than-Cravath Bingham bonus?
Profits soar for law partners [Boston Globe]