This week, Seyfarth Shaw announced the arrival of two construction litigators from Howrey, David Mancini and James Newland Jr. The two partners have been on the Seyfarth website for a while, as we noted last week, but Seyfarth made it official on Monday with a press release.
The other big news this week at Seyfarth: payment of bonuses. Alas, this news isn’t being as warmly received as the Howrey partners.
“Very individualized and below market as usual,” said one source. “No mention of spring bonuses either.”
A second tipster was even more angry….
Angry enough to send us a detailed breakdown of the situation:
Seyfarth paid bonuses effective March 15. Given the timing of the bonus payments and the amount of the bonus payments, you would think they were “spring” bonuses in line with the Cravath scale, but you would be wrong. These are full-year bonuses paid for the associates’ work in 2010. The delayed timing of the bonus payment seems transparently intended to dissuade anyone from leaving for a better firm, unless they are willing to forfeit a full year of bonus eligibility.
(By the way, that is one possible “downside” to spring bonuses, which we might explore in a future post — the way they make it harder to leave your firm. By having two well-spaced payouts per year, they encourage you to stick around until the next bonus is just around the corner.)
The range seems to be from $2,000 to $15,000 for associates and only a few dollars more for income partners. There is absolutely no premium placed on hours in excess of 2,000. Seyfarth has never been known for its bonuses and used to pay bonuses based on the metric of $50/hour over 2,000. The idea has always been, “pay just enough so they do not leave.” This year, Seyfarth’s calculation is drastically off as it appears every associate is considering their options and that a mass exodus is inevitable.
So what explains the low bonuses, according to this tipster?
The firm has explained the reason for the low bonuses as that more associates reached the bonus threshold. More associates billing more hours would generally sweeten the pot in a firm as there should be more to go around, but not so here. It is also widely known that the firm performed very well in 2010, particularly with L&E as its backbone, meaning the partnership is suffering from the very same “greed” that they contend associates suffer from when associates even suggest bonuses approaching market.
Associates are told that hard work now will pay off later with promotion to income partner. Associates are also told, however, that legal excellence and hours are insufficient for promotion and only a “book” will get you promoted. In any event, promotion is not much of an incentive given that income partner is not a desirable position because of the way they are treated….
[I]t’s pretty unbelievable how undesirable they have made the position of income partner. Even with a bad bonus, promotion could be used as the carrot on the stick, but just not the case at this place.
One commonly heard criticism of “income partner” status, whether at Seyfarth or some other firm (like Kirkland & Ellis with its “non-share partners”), is that it’s really just like being a glorified associate. Equity partner is where it’s at, baby.
The money that should have been paid in bonuses will be paid in multiples, albeit in the form of recruiting fees, by the time the defections are over. Bad place to work.
Well! Tell us how you really feel.
We asked whether there was any sort of memo about the bonuses. Said the source:
Nope. Each person received an individualized memo that said what your 2010 comp was, what your 2011 comp is, and what your 2011 bonus was going to be. In years past, they always indicated what your prior year’s bonus was but given that they were particularly sh**ty this year, and resulted in a significant drop for most people despite increased billing, they didn’t put it on there.
The whole process is very cryptic. No real announcement when bonuses were even being paid, just a phone call, report to partner X’s office, here’s your sheet of paper.
Well, on the bright side, at least that slip of paper isn’t pink. Remember that, just a little over a year ago, Seyfarth was still laying off lawyers and staff.
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Seyfarth Shaw Adds Two Howrey Construction Litigators in Washington DC [Seyfarth Shaw (press release)]