The funny thing about spring bonuses is that nobody really planned on them. Firms really thought they were going to be able to get through bonus season paying Cravath’s lowball initial bonuses. Remember when Cravath seemingly set the market, and there was that one partner caught saying “thank God”? That’s what firms were thinking.
Well, spring bonuses have been with us for some time now, and most firms that are going to pay them have announced. Still, there are some firms that seem to be trying to figure out how to delay or avoid paying market compensation for as long as possible.
Schulte Roth is in that category. They’ll be paying spring bonuses, but only if you hit various 2010 and 2011 hours requirements.
And so while Schulte can say that it is “matching” the Cravath scale for spring bonuses, it seems like there are a lot of Schulte people who will not be seeing a single spring bonus dollar. These are the kinds of things that happen when firms are caught off guard by market forces…
The basic spring bonus scheme at Schulte is that they’ll be paying you a Cravath-level spring bonus if you were eligible for a bonus based on your 2010 hours and you billed at least 500 hours in 2011 through March. Most firms have tied spring bonuses to 2010 hours requirements (if at all); some have looked at 2011 hours. No firm that I can recall has hit people both ways (but correct me if I’m wrong).
Doing it Schulte’s way obviously depresses the number of people eligible for the spring bonus, and that’ll save SRZ partners some money. But is it worth it? A load of Schulte people have contacted us, and they all sound unhappy to some degree. The money Schulte saved through these requirements has come at the expense of taking what’s normally a positive thing for associate morale, spring bonus news, and turning it into a negative.
This message sums up, in a family-friendly way, the feelings we’re hearing from Schulte associates:
Not surprised that they have found a way to pay as few people as possible. Cheapskates.
From where we sit, based on anecdotal evidence, there’s actually a weird dynamic in play: more people seem to have been hitting the 500-hour 2011 requirement than the 2010 hours requirement (people were slower last year than this year). But the 2011 requirement is making more people pissed off, because they didn’t see it coming. People are telling us that they were “screwed” because they took vacation in March or February. People are telling us that if they had known they needed to hit 500 hours through March, they could have “taken on some extra work to make that happen.”
And you know, that’s what clients really want to hear. Associates pointing out that they could have found a way to pump up their hours (ethically, I’m sure) in order to hit the arbitrary hours target needed to get a big bonus.
But hey, that’s the kind of world Schulte managers decided to live in, in exchange for whatever money they saved by tying the spring bonus to hours targets in 2010 and 2011.
I hope it was worth it.
Earlier: Springtime Bonus Watch 2011