Associate Bonus Watch 2010, Biglaw, Bonuses, Money

Associate Bonus Watch: Paul Hastings Consolidates Regular and Spring Bonus News Into One Money Orgy Announcement

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Paul Hastings is throwing cash around. At least, that’s the impression it’s trying to give off. Unlike the firms that announced regular bonuses back in December and spring bonuses in the new year, Paul Hastings held off on a December bonus announcement and is only now coming out with its full bonus package.

And Paul Hastings isn’t a straight lockstep firm. Paul Hastings lists some bonus amounts available to the top-performing associates, but because of various merit factors, most associates will not be receiving those top figures, and some are not eligible for a bonus at all.

So while there is money flying all around the Paul Hastings bonus memo, it’s hard to tell how much of it will stick to real Paul Hastings associates…

The regular bonuses will be paid on March 25th. The spring bonuses will be paid on May 6th. Remember that most other firms have already paid their associates the regular bonus, and the most popular date for spring bonuses is April 29th.

Paul Hastings associates, how do you feel about the firm paying out bonuses later than other firms? One PH tipster had this to say to ATL: “If a spring bonus is paid in May, is it still a spring bonus (or does it depend on the latitude of the office)?”

I imagine that if the money is right, PH associates won’t care that much about when they get the money. But figuring out how much money a Paul Hastings associate is getting is hard. From the memo:

Sponsored

This year’s associate bonus pool awards a bonus to approximately 70 percent of the associates participating in the program. As always, performance expectations are steep. Receipt of a top level bonus is an exception and these are awarded to associates distinguishing themselves by consistently demonstrating exceptional performance that surpasses the Firm’s high standards. Approximately 10 percent of all bonus recipients distinguished themselves at this level and were awarded the top bonuses. In addition to the three standard levels of awards, as has occurred in past years, discretionary bonuses were awarded on a limited basis to certain associates who demonstrated excellence and made significant contributions but fell just short of the Firm’s hours threshold.

Man, I’ve read credit default swaps written in more clear language.

In any event, the regular bonus scale, for associates who meet “steep expectations,” is as follows:

Class of 2003+: $35,000
Class of 2004: $30,000
Class of 2005: $25,000
Class of 2006: $20,000
Class of 2007: $15,000
Class of 2008: $10,000
Class of 2009: $7,500

This scale is the same as the initial bonus scale Cravath announced back on November 22nd. Who knows how many Paul Hastings associates will actually receive this basic bonus payout? It’s hard to understand why it took Paul Hastings three months to announce the same thing Cravath came up with at Thanksgiving.

Sponsored

Of course, just doing regular bonuses is kind of obsolete. Spring bonuses are what all the cool kids are doing:

In addition to our regular year-end bonus program, we are also pleased to announce that the Firm will be awarding a spring bonus to associates in our U.S. and international offices. The amount of the spring bonus is the same for each class, notwithstanding the level of regular bonus (A, AA, AAA) that is awarded. Associates in all global offices who were awarded a meets expectations bonus or higher and are in good standing and employed with the Firm on the date the bonus is paid will receive this additional recognition. Associates in global offices who were awarded a discretionary level bonus and are in good standing and employed with the Firm on the date the bonus is paid will receive an amount equal to 50 percent of the applicable spring bonus amount. Any prorations applied to the annual bonus will also be applied to the spring bonus. Spring bonus awards will be communicated outside of the performance evaluation conference and paid on May 6, 2011.

If that is confusing to you, don’t worry, you are not alone. Even Paul Hastings associates don’t fully understand what’s going on here.  They’re just hoping they are not given a “junk” rating:

It’s not clear what the “(A, AA, AAA)” business is about — probably A = “Meets Expectations” and “AAA” = what I ought to get after my last year.

Paul Hastings lists spring bonus amounts for associates who “meets expectations.” Again, I’ve got no idea how many PH associates will actually receive this money:

Meets Expectations

Class of 2006+: $20,000
Class of 2007: $15,000
Class of 2008: $10,000
Class of 2009: $7,500

I mean look, clearly somebody at Paul Hastings is getting paid. But Paul Hastings seems to spend a lot of time giving itself the option to not pay market bonuses to any associate it deems undeserving. The firm even keeps the option open to dock bonuses if associates were delinquent with submitting their timesheets over the course of 2010.

Maybe you can make better sense of all of this than I can. Check out the full memo on the next page.

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