A day without bonus news is a day without sunshine. We wouldn’t let this Monday pass without giving you some new compensation information to wrap your heads around.
Today’s bonus news comes from the prominent intellectual-property firm of Fish & Richardson. Fish’s approach to associate compensation is closely watched by other IP shops, so we expect this announcement to be of interest to many of you.
IP lawyers like numbers, right? So let’s look at the FR memo, which includes lots of ‘em — tables for bonuses, in 2010 and 2009 (for comparison purposes), and also a table of 2011 base salaries….
The Fish & Richardson memo — from Peter Devlin, the president and CEO of the firm — went out on Friday, March 4. We’ve reprinted it in full below. One of our sources had this reaction to the info: “Surprised how these seem higher then bonuses in most firms for 2010, and surprised the partners would want this level of detail and info out to all associates, since you can now tell how you fared under the new merit system.”
It might be a surprise, but it’s a pleasant and refreshing one, no? Three cheers for transparency (which is sometimes sorely lacking in the legal sector, with respect to both law firms and law schools).
Meanwhile, on the base-salary front, Fish appears to have adopted the standard NYC lockstep scale: $160K / $170K / $185K / $210K / $230K / $250K / $265K. That’s certainly nice news (and might encourage other IP firms that are below the market to step up).
Finally, in other happy news for Fish & Richardson associates, the firm recently came in at #6 on this list (PDF) of the top 25 law firms with the best 401k plans, compiled by Brightscope. Spending your bonus money on the latest fashions — or on gadgets and video games, since you are IP lawyers — can be fun. But it’s never too early to start thinking about saving for retirement (especially if you don’t enjoy a delicious defined-benefit pension plan, as many unionized state workers do).
CORRECTION: As pointed out by a commenter, the Fish & Richardson plan that was ranked #6, with a score of BrightScope rating of 88, is not the plan for associates. The 401k plan for associates at Fish & Richardson has a somewhat lower rating of 80.
What do you think of the Fish & Richardson bonuses and base salaries? Please opine, in the comments.
UPDATE: If you’d like to check out the Cravath-scale compensation for comparison, click here and scroll down to the last blockquote, the table of total bonus compensation (2010 year-end bonus + 2011 spring bonus).
FISH & RICHARDSON P.C. — MEMORANDUM — 2010 ASSOCIATE BONUSES AND 2011 SALARY SCALE
From: Peter Devlin
Date: March 4, 2011 2:12:55 PM MST
To: “Associates – ALL”
Cc: “Principals – ALL”
Subject: Requested information about associate bonuses in 2010 and the 2011 salary scale
I am providing this memo in response to your requests for information about the firm’s associate salary and bonus system.
As all of you know, 2010 was another very good year for Fish & Richardson. We achieved great successes for our clients in litigation, patent, trademark and regulatory matters. That translated into very positive financial numbers for the firm, and we again exceeded our budgeted profitability by a considerable margin.
Principals in the firm and those of us in management recognize that our associates are a critical reason for the firm’s success. Accordingly, we allocated a significant portion of the firm’s 2010 profits to the associate bonus pool, and when it became clear that the firm would exceed budget in 2010, we increased the size of the pool, just as we did in 2009.
It has been our custom not to disclose bonus information. In my visits with associates throughout the firm, however, you have told me that you would like to know more about our bonus system. Moreover, because we moved to a merit-based bonus system in 2010, a number of you were curious about how the 2010 bonuses compared to those from 2009. Accordingly, we have decided to disclose information about our associate bonus numbers for 2009 and 2010.
Viewed individually and on the whole, our bonuses compare very favorably with those awarded by other firms in the market, even including the “spring bonuses” being paid by some firms. Our merit-based associate bonus system is designed to reward attorneys for their unique contribution to the firm’s success. As you know, that means not all associates in each class receive a bonus and that associates in the same class may receive varying bonus amounts. Each associate’s bonus is determined individually, taking into account value provided to our clients, quality of work, firm-building contributions, overall dedication and hard work.
The chart below shows our bonus information for 2009 and 2010, including the % of associates in each class who received a bonus, the average bonus awarded to those receiving bonuses in each class, and the bonus at the 80th percentile of those receiving bonuses in each class (i.e., 20% of the associates receiving a bonus in that class received a bonus of that amount or higher). The numbers in the chart include all associates except those who joined the firm so late in the year that they were not eligible for a year-end bonus. Accordingly, the “A1” class does not include those associates who had just started with the firm in the fall. Also, the data from 2009 includes the $10,000 “special bonus” that was awarded to all associates in good standing at the end of 2009, but the percentage of associates receiving bonuses for 2009 includes only those who received a bonus above and beyond the special bonus (otherwise, the % receiving bonuses would be at or near 100% for all classes in 2009).
Finally, as I informed you late last year, we have increased associate salaries for 2011. The current associate salary scale is reproduced below.
I hope you find this information useful. If you have additional questions about our salary or bonus structure, please feel free to contact me, your Practice Group Leader, or the firm-wide hiring principal, Roger Denning.
Thank you for your continued good work.