Associate Salaries, Killing Lockstep, Sonnenschein

Sonnenschein's New Compensation Potpourri Starts to Take Shape

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Back in December, Sonnenschein announced the outlines of its new merit-based compensation structure. At the time, the firm promised its associates more details in March.
The firm is true to its word: we’re now in March, and we have more details. Above the Law talked with a spokesperson for Sonnenschein. Here’s the top line news:

  • First year compensation returns to $160,000 for first year associates.
  • 12% – 15% of that compensation will be paid out as a “base bonus” in 2011.
  • There are no hours or competency requirements to achieve the base bonus in 2011
  • 2010 raises for veteran associates will be in accordance with Sonnenschein’s merit based tier system

According to Sonnenschein, the decision to pay 12% – 15% of 2010 associate compensation as part of a 2011 bonus will help them transition to their new compensation model. The firm wants a greater percentage of total compensation to be paid out as merit-based, end-of-the-year bonus. That new system will be fully operational in 2011, so the firm is viewing 2010 as a transition year. Again, the firm emphasized to us that there would be no hours or merit requirements for associates to receive this 12% – 15% of 2010 money next year.
Sound good? Let’s see what the tipsters have to say.


Reaction to yesterday’s Sonnenschein announcement came in fast. Sadly for Sonnenschein managers, associates who emailed us were unimpressed:

While this may be a move to market, in reality it has been used as another tool to cut pay. Most associates require pay raises in the range of 20K or more just to have the same take-home pay during the year and hopefully that when 2011 comes around they might actually see any benefit from a raise.

Another tipster who doesn’t even work at Sonnenschein had an interesting comparison:

I don’t work at Sonnenschein anymore. But I have friends there, and friends at DLA [Piper]. I owe them Oscar money, but I’m going to withhold 15% until 2011. I’m sure they’ll be used to that.

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Ah yes, DLA Piper, the original gangsta of withholding 15% of base compensation.
But one shouldn’t be so quick to lump the firms in the same deferred compensation boat. First of all, the starting salary at DLA is $145K. Sonnenschein is at $160K in New York. It’s also worth nothing that — as it stands now — there seem to be almost no requirements for Sonnenschein associates to get their money back. DLA will only return the 15% of compensation if associates hit their performance marks. At Sonnenschein, the requirement appears to be “breathing” and “still employed” by the first quarter of 2011.
Granted, that might cause some to worry about massive layoffs in, say, the fourth quarter of 2010. But, you know, we’ll cross that bridge when we come to it.
Further up the salary scale, it’s a bit difficult to determine if associates are being brought up to New York market levels. With the Sonnenschein three tier system, some associates will be making more than their class year peers at other firms, while others will be making less. The firm couldn’t provide us with a distribution of salary outcomes under its new system.
Sonnenschein associates, let us know if you feel you are being compensated at market levels.
Earlier: Sonnenschein: Staff Layoffs and New Associate Compensation Model Potpourri
DLA Piper: Taking the Merit Based Model Out for a Spin

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