Associate Bonus Watch 2010, Biglaw, Bonuses, Layoffs, Money, Pregnancy / Paternity

In Defense of Kaye Scholer

While performing here at the ATL Cabaret on Wednesday night, the celebrated drag queen of Biglaw, Kaye Scholer, was pelted with rotten fruit — by her own associates. If you haven’t done so already, do check out their rage-filled rants. (If nothing else, they’ll make you feel better about your own firm.)

As we’ve stated before, we’re committed to presenting both sides of a given story here at Above the Law. Sometimes we don’t hear the other side of a story because the sources on that side don’t care to contact us. But when we do have both sides available to us, we present them.

In the case of the People v. Kaye Scholer, we did hear from a character witness on behalf of the defendant. What did this individual have to say?

The tipster, whom we’ll call “KS Defender,” begins:

I am a longtime reader and big fan of your site. I am [an Nth year] associate at Kaye Scholer, and am writing to correct some of the misstatements that some of my fellow KS tipsters apparently made.

First of all, here’s some relevant background. When I arrived [a few years ago], the firm was managed very poorly. The management team that was in place in 2008 and part of 2009 was the team responsible for increasing the minimum billable requirement to 2200 hours (retroactively), and that tragic decision to designate half of the class of 2009 as “pro bono associates” and pay them $60,000 instead of $160,000. Those were terrible decisions and truly worthy of scathing criticism.

Admitting that your beloved firm isn’t perfect is a good way to build credibility. In other words, the opinions of Kool Aid drinkers — you know who you are — will tend to get discounted.

Back to KS Defender:

Towards the end of 2009, however, management was completely revamped, and things changed for the better. So, for 2010 and 2011, the minimum billable hours was lowered dramatically (from 2200 billable NOT including pro bono to 1950, which could include up to 150 hours of pro bono and 50 hours of “firm citizenship” which includes interviewing candidates, etc.). The 1950 combined hours is now VERY reasonable. What’s more, for the first time in KS history, the minimum hours requirements for bonus for 2010 were announced well before the year ended. They also announced the minimum bonus hours for 2011 at the same time (the requirements are the same for 2011).

KS Defender engaged with some of the prior criticism:

I have NO idea what one commenter was saying about paying out half the bonuses promised. And I think there’s no way in hell that I wouldn’t have heard about that if it had happened. I’m not sure whether that person just got on a roll and started making things up, or he/she had some individual issue that no one else has heard of, but I find that complaint bizarre.

Same for women getting fired for getting pregnant. I have never heard of such a thing, and know many women at KS that have “survived” a pregnancy leave.

(Well, in fairness to the Kaye Scholer critics, it’s hard to disprove a negative. Just because you know of some women who came back after maternity leave doesn’t mean that the firm has never, in its entire history, laid off a pregnant woman and/or a mother. We heard many reports of this happening during the Great Recession.)

We did give the original Kaye Scholer critics a rebuttal opportunity. Here’s what one of them had to say. We’ll start with the pregnant women / mothers:

Back in 2009, when it came time to start cutting people, the first thing Kaye Scholer did was fire all associates who were part-time. Almost exclusively, these were women who had recently had kids and who were easing back into their jobs working 4 days a week. Not a single one that I spoke with was given the chance to keep their job if she came back full-time. Maybe that’s not flat-out firing a woman because she’s pregnant, but I would argue that it’s nearly the same thing. At best, it sends the message that women who decide to have children while working at this firm do so at their own risk, and will be the first to go when the economy heads south again. If women have “survived” maternity leave more recently, good for them. They should realize that they got lucky, and managed to time their leave when the economy was starting to do better.

And about not paying out the full amount of promised bonuses:

In Jauary 2010, Kaye Scholer announced two tiers of bonuses. Eligibility was based solely on billable hours, which is the way Kaye Scholer usually awards bonuses. Above the Law reported this announcement here and here. As those posts explain, what was announced publicly was that associates who billed 2200 hours would receive a $20,000 bonus and associates who billed 2400 hours would receive a $40,000 bonus.

This did not happen. I have been told personally by [several] different associates at [multiple] levels of seniority that they did not receive the higher bonus, even though they qualified by billing over 2400 hours the previous year. In each case, one of the partners came to the associate’s office the day after the announcement and told them that they would be getting the $20,000 bonus, in spite of their hours. That’s to say, they would be getting half of what they were promised publicly, and the same amount as associates who billed 200 fewer hours.

This did not have anything to do with poor performance reviews or the like. [These associates] are still with the firm and survived every round of layoffs that took place, when even a single bad review was enough to get you fired. They are well thought of by the partners and their peers. The truth is that the firm never had any intention of paying the higher bonus. When pressed, the partner breaking the bad news mumbled something about “levels” and quickly excused himself. However, no mention of a seniority component for the higher bonus was announced publicly.

Keep two other things in mind. First, almost no one qualified for the $40,000 bonus that year, so to cheat the tiny minority who did qualify out of it is even more cheap than it appears. Second, these are only the associates I know about. Who knows how many others had this happen to them and word just didn’t get back to me? The bottom line is that the firm promised one amount in bonuses that year and then actually paid bonuses that were half that amount.

Just like I said. Low, even for this place.

Wow. Well, this was supposed to be a positive piece, so let’s yield the floor back to KS Defender:

So that leaves one issue — spring bonuses, or lack thereof. And even that, I think, was not accurately portrayed by the commenters. The consistent message from firm management has been that KS is not paying spring bonuses, but will factor in what other firms pay out for spring bonuses when determining what “market” bonus is at the end of the year. I don’t see what people are so up in arms about.

Would I like a bonus now? Of course. But the amount of rage generated by not receiving an extra $10,000 immediately seems disproportionate to the offense, if it can be considered an offense. And who knows? The kinder, gentler, newer management has been pretty straightforward and transparent thus far (though many people seem to have too much accumulated mistrust and cynicism to acknowledge that fact), so I’m not sure why people are so convinced that this is merely an effort to “serve us another plate of s**t” at the end of the year.

This sounds reasonable. We’ve been happy to cover the spring bonus trend, and we’ve occasionally stoked the fires on this front (since it’s great for our traffic). But we must confess that sometimes the anger gets out of control — and we’ve even called out what we view as excessive complaining.

Spring bonuses are certainly nice. But shouldn’t they be viewed in the larger context of a lawyer’s experience at his or her firm? The Kaye Scholer defender certainly thinks so:

The bottom line is that KS is actually a pretty decent place to work on the scale of big law firms. I rarely work late or on the weekends, and the partners, by and large, treat associates humanely. I have plenty of friends at other firms who live in their offices and received a spring bonus, but I’d rather stay here and subsist on my market salary and regular old bonus. And, like I said, we might be made “whole” at the end of the year in any event. So I just don’t understand what all the crying and self-pity is about.

Fair enough. We can understand the anger of associates who feel that they’re being underpaid compared to their counterparts at peer firms — especially when these associates are trying to get their student loans paid off, and the partners at the firm are enjoying record profits. But we can also understand why other associates feel that these small differences in compensation are no big deal, especially when considered in light of the bigger picture.

One could argue that there’s no sense in getting bent out of shape over ten grand here or there. Remember the wise words of The People’s Therapist, which he used as the title of his book (affiliate link): “Life is a brief opportunity for joy.”

If we ever write about your firm in a way that you feel is unfair, you can always come to its defense — by email, to, or by text message, to 646-820-8477 (646-820-TIPS). We want to hear all sides. Thanks.

Earlier: Growing Discontent at Kaye Scholer

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