I’ve been trying to be nice. I’ve been trying to be positive. I’ve been trying to adopt a new, sunny, smoke-free attitude that assumes certain top firms will do the right thing by their associates and announce spring bonuses along the lines of Cravath, Sullivan & Cromwell, and a bunch of other top-tier firms.
Just last week, we reminded firms that it’s not too late to announce “spring” bonuses. Dewey & LeBoeuf announced spring bonuses that it will pay in the summer. And that’s okay, nobody is really complaining, associates just want their money. If top firms are paying out spring bonuses, associates who have been told they are working at a top firm want to see their cut.
But there are a number of firms that haven’t gotten the message. Did they think their own people wouldn’t notice that they are getting shortchanged compared to the market? Is this a way for those firms to force some attrition? Surprisingly, some of the firms that are being cheap with spring bonuses were lauded for being generous around Christmastime.
Those firms know how the internet works, don’t they? Information can be updated around these parts….
The associates who work at firms that are being strangely silent regarding spring bonuses are getting restless. Here’s one exemplary tipster, but there are many others who have expressed similar sentiments:
All the stories are about which firms have paid spring bonuses. Why not a post (or several) about who hasn’t paid spring bonuses? We’ve crossed the point where it matters who has paid bonuses and where we should start shaming those who haven’t.
It’s not for us to construct a wall of shame or anything. For all we know, refusing to pay spring bonuses is a prudent economic decision made on the part of firms that believe they can get away with below market compensation.
It is interesting, however, to watch the purse-string sphincters tighten up from a few firms that were generous during the regular bonus season. It makes it look like their early money was just for the press, and not representative of a true commitment to pay top of the market compensation to their associates.
Three of these about-faces have been consistently pointed out by tipsters to the Above the Law inbox: Kirkland, Latham, and Quinn.
Kirkland & Ellis: K&E spent most of the fall promising bonuses that would blow Cravath’s paltry initial bonus out of the water. Then, way back in mid-December (around December 20), the firm apparently backed up all of that talk, with individualized bonuses that seemed to make associates very happy.
But since the spring bonuses kicked into high gear, you know what we’ve heard from Kirkland? Nothing. Crickets! Even their trolls, the ones bragging about K&E’s “market-shattering” bonuses, have quietly disappeared. According to tipsters, here’s what going on in side the heads of K&E managers:
Kirkland & Ellis had an associates meeting where they said they were still discussing whether or not to pay spring bonuses. The funny part was that the first hour of that meeting was spent discussing how profitable the firm has been and how much better than the competition K&E has done, then they announce they are still discussing spring bonuses (translation: no way, but we don’t want to announce that we aren’t giving them, we just want you to forget about it). Their rationale for not giving spring bonuses was that the spring bonuses paid by other firms are just the market reaction to the end of year bonuses that K&E gave out last year.
That’s a good story, but we’re not sure if it is true. The two Cravath bonuses, taken together, mean that every Cravath associate in the class of 2007 is getting $30K in bonuses. Are there K&E ’07 associates taking down a $30K bonus? If so, then K&E is still competitive — not “market-shattering,” just competitive. We’ll see what the associates say.
Latham & Watkins: Latham has what the scientists call “ass-bad timing.” We reported on their regular bonus announcement at about 2:00 p.m. on January 21. Their regular bonuses were good, better than what Cravath was paying at the time.
Unfortunately, at around 5:35 p.m. on January 21, Sullivan & Cromwell announced its spring bonuses, which blew Latham out of the water — and touched off spring bonus season. Latham was an associate compensation positive story for three and a half hours before it got cast back down with the sodomites.
That’s not fair, but what are you going to do? Latham’s had two months to lick its wounds and meet the Cravath scale for spring bonuses. According to tipsters, Latham is using the same logic as Kirkland; since it already paid above-market regular bonuses, it doesn’t have to pay market spring bonuses. Again, that only makes sense if Latham’s overall bonus compensation matches what other top firms are paying, and from what we understand it does not.
How can we capture the feelings of Latham associates, who survived massive layoffs only to receive subpar compensation? One tipster offers this visualization:
Quinn Emanuel: Quinn doesn’t always play the bonus games like some of the reindeer. The firm traditionally rewards ultra-high billers very well, while low billers are free to go home and enjoy their lower-income lifestyle. There was all kinds of weirdness with this year’s bonus scale: you needed 2100 hours to get the Cravath regular bonus, but if you did substantially better than that you got 50% on top of the Cravath regular bonus — except that the money wouldn’t be paid until June 2011.
But the problem that Quinn associates are pointing out is that this announcement was made on December 20, and the world for associate bonuses has changed since then. But Quinn hasn’t updated its payouts, which means that as it stands, high-billing Quinn associates are going to have to wait until June to get less than what every Cravath associate is going to get in April. That point is hard to obscure.
And it’s not like Quinn can’t afford it. Quinn cashed out of 2010 with $3.62 million in profits per partner. That borders on obscene (in a good way). You have to think that paying out market-level spring bonuses on April 29 instead of sometime in June isn’t going to place an undue hardship on any Quinn Emanuel partner.
Quinn associates are so desperate for relevant news that the “Quinn Remains” guy has been reduced to tipping us off on cupcake stories. What gives?
It is officially “springtime,” and the firms who thought that their own associates just forgot that they’re not being paid as much as their colleagues at peer firms are deeply mistaken.
Earlier: Prior ATL coverage of spring bonuses