It’s a good news, bad news kind of thing for associates at Kirkland & Ellis.
The good news: their bonuses are much better than the “scraps thrown to the troglodytes slaving away at Cravath,” according to one tipster.
The bad news: the bonuses don’t seem to be as generous as last year’s, and some associates made less in real dollars this year than last year, despite billing the same amount of hours and being a year more senior.
So not everybody at Kirkland is happy, which is weird because usually K&E gives its people happy juice before they talk to anybody.
Of course, when your firm uses Cravath as a baseline for your bonuses, happiness is a relative term….
As we explain every year, Kirkland bonuses are highly individualized. The firm looks at billable hours as well as “merit” factors, and determines if an associate is “with class,” or below, or above. But the scale starts with Cravath for almost everybody, which again should make everybody at Cravath really question the “compensation leader” status the firm still pretends to have.
K&E associates have gotten used to the high starting baseline and expect the firm to share the wealth when times are good. According to some associates, the firm did not bathe people in generosity. Here was one associate’s reaction when the firm presented associates with the general overview of bonuses this year:
[T]hey showed us the grid today and it was demonstrably worse than last year. Whereas, last year, most of the class made at least 2x market and it was just a question as to how many multiples more associates would attain… This year, most of the class made at least “above market” and it’s an open question how many people actually make it to 2x and above. From what I saw, in each class year, a small minority of the class made 2x Cravath this year.
It’s pathetic. I know associates who billed more this year and attained the same class rating but made a lower bonus.
The firm is having a record year. Absolutely no reason to give associates even WORSE bonuses than last year.
Another associate said that the grid looked like this for junior associates:
1x-1.24x Cravath 13%
1.25x – 1.49x Cravath 28%
1.5x – 1.99x Cravath 46%
2x+ Cravath 13%
So that means that 13% of this associate’s class received twice the Cravath bonus.
Once the individual numbers started rolling out, the reactions were mixed. Here’s one associate who seemed happy enough:
Class of 2011, [tons] of hrs, with class, $20.5K
The corresponding Cravath bonus was just $10,000.
But doubling up the Cravath bonus didn’t make everybody happy:
[J]ust got my bonus. About twice Cravath. Judging from the grid, I have a few thoughts:
1) Last year, the question was “How many multiples of Cravath would we get?”
2) This year, the question is now, “I know I’ll beat Cravath, but will I make twice Cravath?” That’s because making twice Cravath or above was basically reserved for a small minority of each class year.
People are fuming. If we were doing badly as a firm, I’m sure we’d take one for the team. but the firm had an amazing year. How is it possible that there are so many associates who got lower bonuses this year, yet higher last year, despite being a class year higher and having the same rating and hours?
The feeling that these bonuses were underwhelming was echoed by a number of associates we spoke to:
Slightly disappointed because I actually got a little more last year with materially the same hours, but better than the rest of the market so can’t complain too much. Just thought I would make more this year than last.
Now, I know what associates at non-peer firms and unemployed 4Ls are thinking: “I’d Dexter a K&E associate for a chance at ‘a’ bonus, I don’t even know what I’d do for a shot at a bonus that doubles Cravath.” I get that for a lot of people, “complaining” about a five figure bonus seems wrong.
But, like many top firms, Kirkland & Ellis recruits outstanding candidates from top law schools with sterling credentials. These aren’t people who could work at K&E or work as a greeter at Pizzeria Uno, these are people with options. They could do other high paying things with their lives, or they could do other low-paying things that are actually useful to the people of the world with their time. Instead of those other, potentially glorious careers, these people come to Kirkland to be ground underfoot of a mountain of largely monotonous and boring work. Work that nobody would do every day for free.
In the bargain, the firm pays them money. And lots of it. That’s the deal. They waste their intellectual capacity churning documents and becoming masters of the arcane, and the firm gives them a cash reward. And Kirkland promises to give them the most. Not “a lot,” that’s not the deal. They signed up for “the most.” They signed up for “as much as freaking possible.”
So, when these people feel like there is cash that was left on the table, they get a little pissy. You would too. I know you don’t think you would, but trust me, after 2200 or 2400 or 2800 freaking hours spent doing some soul-crushing stuff, you’d want as much money as you could possibly get your hands on. That’s how we get to this report, from a tipster:
I understand everything is relative — thank God I’m not at Cravath — but one of the reasons people come to K&E — and one of the reasons the firm claims to be such a leader — is be because of the supposed strength of its compensation…
Please do a PSA so people can understand, at least for some associates here, the hype is NOT real. The old “if you hit 2k, 2100, you’ll at least double Cravath–do you expect anything less, K&E is a market leader” is a bunch of bullshit, at least this year. If I was feeling generous, I’d explain it away with the idea that, maybe they set a double Cravath scale assuming bonuses like last year and were surprised by Cravath’s increase; but I’m not feeling generous. The firm is rolling in dough–PPP is above $3 mil, we’re busy. Doesn’t feel very merry Christmas…
Don’t want to sound spoiled. But K&E recruits based on and trades off of its reputation as a compensation leader and, to me, this is not leading compensation. Hell, I doubt I’d be writing this bitchfest if they had even done, say $25k all in. But making just 4k more than a Cravath kid at target hours is disappointing.
Everybody at Kirkland seems to want to make it clear that the people who went to Cravath are chumps who are doing the same work for less money. But it seems that K&E associates are no longer comparing themselves to Cravath people. Instead, they’ve come to expect a fair distribution of profits between partners and associates, and they seem to think that this isn’t it.
Maybe Kirkland partners know something about the firm’s profits that the associates aren’t aware of, but if 2012 PPP numbers come out and show that things are going well, associates who helped the firm get there are going to be even more disgruntled.