We’re tempted to do what we proposed last year regarding Sidley Austin bonuses, by simply writing: “Sidley bonuses are out. The scale is not transparent, so some people may be happy with their bonuses and others may be unhappy. Here is an open thread for you to discuss. Thank you.”
That would at least spare us from some of the criticism we’ve received for our coverage of the Sidley bonuses in recent years. In 2010, we initially wrote a very positive post, which we got criticized for by people who saw it as too positive. In 2011, we went in the other direction, reporting that Sidley’s bonuses drew yawns from associates — an assessment that drew flak for us from happy campers at Sidley (and there are many happy campers at the firm; it enjoys an A- rating from ATL readers who work there).
So we realize that covering the sensitive subject of Sidley bonuses is a bit like trying to reach a budget deal: you can’t make everyone happy, just varying degrees of unhappy. But we’ll give it our best shot….
Let’s start with the facts before turning to the opinions. Yesterday, Sidley announced associate bonuses and the traditional, seniority-based salary increases. From the memo (reprinted in full on the next page):
As is our custom, we have determined bonuses on an individual basis. Year-end bonuses continue to be discretionary and, where awarded, are tailored to each associate’s circumstances. General eligibility criteria remain the same as in past years. In establishing bonus amounts, we have given substantial weight to the quality of an associate’s work, which remains the most important factor in evaluating an associate’s performance and prospects for long-term success at the Firm. We also have considered the hours that each associate has spent on chargeable, pro bono, and certain non-chargeable matters, such as legal services and other special contributions to the Firm.
We also are pleased to announce our associate salary schedule for 2013.
The scale is the familiar 160-170-185 scale, aka the Simpson Thacher scale, introduced when Simpson led the nationwide pay raise to a starting salary of $160,000 in January 2007. Almost six years later, associate base salaries at most major firms remain stuck on the $160K scale (with some exceptions). But considering what we’ve been through in the interim — you know, the near-collapse of the U.S. financial system, plus the Great Recession — many associates are just happy to have jobs.
Now, on to bonuses. Here are a few data points we’ve received. We provide them with the caveat that we obviously can’t guarantee that they are a representative sampling of the Sidley bonus pool generally. Also note that we’ve been a little vague here to protect anonymity of our sources. The corresponding Cravath amount for each class year appears in brackets.
Class of 2012 –
sources report there were no stub-year bonuses for newly arrived first-year associatessee update below [Cravath: $10,000 pro-rated].
Class of 2010 – hours between 2000 and 2500 – bonus more than $20,000 [Cravath: $14,000].
Class of 2009 – hours between 2000 and 2500 – bonus more than $25,000 [Cravath: $20,000].
Class of 2008 – made hours – bonus a bit below market [Cravath: $27,000].
Class of 2008 – hours between 2000 and 2500 – bonus more than $40,000 [Cravath: $27,000].
Class of 2008 – high hours – bonus more than $45,000 [Cravath: $27,000].
Class of 2006 – made hours – bonus a bit below market [Cravath: $40,000].
UPDATE (9:00 PM): We’re now hearing that Sidley is turning the $10,000 salary advance given to class of 2012 members into a bonus. Nice!
It’s hard to generalize from these data points, but it seems safe to say that (1) some people with decent hours did better than the Cravath/New York scale, (2) some people with decent hours fell a bit short, and (3) people with high hours, approaching or exceeding 2500 hours, definitely did better than the Cravath/New York scale. We didn’t hear from anyone with more than, say, 2400 hours who didn’t beat the Cravath/New York scale.
Here are some reactions from Sidley sources (not in any particular order):
“Bonuses pretty awesome. [Some high billers received] twice or 2.5 times the New York scale. Morale pretty high today.”
“Is ‘suck it Cravath’ quotable? Very happy to have gotten over a third more than a Cravath associate! Ha, I am actually happy with Cravath as they probably got me an extra $5k with their base line raise. I am very happy with my bonus. One of those times you are glad you don’t work at a lock step firm.”
“Overall, very pleased. As much as people say Cravath ‘sets the market,’ they really just set the floor for the big national firms, since I assume a bunch of the national shops tier their bonuses based on hours, and use the Cravath model for the 2000 level. I’ll bet most people at Cravath are far enough over 2000 that they are taking a pay cut to work there. Cravath pays top of the market compensation my ass. Not sure how much a Cravath prestige point is going for on eBay these days, but I’ll take more money, lower cost of living city, lower taxes, and (probably) same hours instead.”
“Expected result but most are feeling pretty good about it. High billers are really happy, but typically are due to the premium normally paid to those who exceed hours. Haven’t talked to anyone who didn’t hit hours — which is the downside to the Sidley system, you get a big fat zero.”
“Happy to be a bit more than 10 percent above market. I’m not a big-time biller, so it’s nice to see a genuine performance based bump.”
“I haven’t spoken to anyone [about the bonuses, so I don't know general reaction]…. Our office just exploded with huge amounts of work, so everyone is now in full sprint mode.”
That’s about as much light as we can shine into the Sidley Austin black box for now. If you’re a Sidley associate who’s happy with your bonus, congratulations; if you’re a Sidley associate who’s unhappy with your bonus, condolences.
UPDATE (12:10 PM): Also, congratulations to Sidley’s 26 new partners.
(If you’d like to discuss further, feel free to post in the comments. And if you’d like to see the Sidley Austin bonus memo, you can check it out on the next page.)