Associate bonuses at market-leading Cravath and all of Cravath’s followers are staying the same this year. As I’ve stated in these pages, and on CNBC and Bloomberg, this is a good thing. In times of uncertainty and instability for Biglaw, treading water is a victory.
But just because this year’s bonuses are good news doesn’t mean there isn’t better news out there. Today the better news comes from the litigation powerhouse of Boies Schiller & Flexner, where the average bonus was $85,000 and the top bonus was $300,000 — even higher than last year’s $250,000.
Even if you bill like a maniac — and BSF’s compensation system does reward the industrious — how on earth do you get to a $300,000 bonus? We spoke with legendary litigator David Boies, founding partner and chairman of the firm, to find out….
We’ve heard from a number of Boies Schiller associates about their bonuses, and the vast majority are very happy (as usual). We’ll be a bit vague to protect anonymity, but we heard from one associate who earned a bonus of more than $200,000 and another associate, fairly junior, who earned a bonus of more than $75,000. It’s also worth noting that these bonuses have already been paid — no waiting until December 20 at BSF.
We’ve explained the workings of the Boies compensation system in prior stories (see here, here, and here). The guiding principle is that associates are treated like part-owners of the firm and are compensated based on how much revenue they generate. Their paychecks reflect how much they work and how much they bill, and they can also reflect payouts connected to contingency cases, if an associate selects that option.
And Boies bonuses can also get beefed up by one other factor, as we discussed with David Boies in a telephone call earlier today (set up through BSF’s fabulous spokesperson, Dawn Schneider). Here’s a lightly edited and condensed write-up of my conversation with Boies.
Thank you. And now we’re going after Virginia. If we can crack Virginia, we could win for the entire Fourth Circuit. That would make a difference.
Last year, bonuses at Boies Schiller ranged from $25,000 to $250,000. How are the bonuses this year?
They are higher than last year. We had another busy year, our associates worked very hard, and they are getting the rewards of what they generated. Last year our average bonus was around $80,000, and this year it’s around $85,000. Last year our top bonus was $250,000, and this year it was $300,000.
One of our New York sources, reacting to their bonus, described themselves as “so happy I can’t think straight.” But we have heard a few reports from folks outside of New York saying things were a little slower and bonuses a little lower than last year. Any comment on that, or on whether bonuses varied across offices of practices?
The litigation work was pretty busy all across the country. Corporate work was a little slower the first half of the year, then it picked up a lot over the second half of the year — but that’s essentially a New York practice. Florida was very busy, Los Angeles was very busy…. Maybe Oakland was a little less busy, but that’s the only office I can think of that was a little less busy.
When we spoke last year, you said 2012 was one of the strongest in the firm’s history. How was the firm’s 2013 as a whole?
At the end of last year, I would have said that our people can’t work any harder. But somehow they did this year!
And what are your expectations for 2014?
I think 2014 will be very much like 2013 and 2012 — this time, I really will be surprised if people can work harder. We’ve got a number of major trials scheduled for 2014. While I don’t think things like LIBOR will go to trial, discovery is going to be ramping up. I think 2014 is going to be a challenging year — we have an awful lot of work to do! It’s a good problem to have, and better than the alternative.
So about that $300,000 top bonus, which is staggering — how did that person get to that bonus? Did they opt in for a contingency payment on a big contingent-fee case?
The $300,000 bonus was actually not contingency-related. It reflected a business-generation credit. One of the things we offer here is that we give associates credit if they generate business for the firm. The $300,000 bonus, and a couple of the $250,000 bonuses, were a function of associates benefiting from that credit.
And associates can actually bring in business that is worth Boies Schiller’s time?
It doesn’t happen a lot because our rates are high. But one of the associates involved is someone who is older and went to law school 20 years later than most people and hence knows people of that age group who are more likely to have business. One of the reasons it’s tough for associates to generate business is because of a lack of experience and because their cohorts are so young. But if you have an associate who’s a little older, that can help them generate business.
But another associate who benefited from the credit is about 30 years old. It does vary. Sometimes people have relationships they bring to the firm or have a specialty practice that draws people in, even when they’re still associates.
The thing to focus on is that our bonuses are not generosity on the part of the firm. We do this because it’s the right thing to do, but it’s also the fair and productive thing to do. The quality of the associates you have and how hard they work are what make your firm successful. One of the things we’ve found is that by treating associates as part-owners of the business, we’ve been able to attract and retain great talent, which makes the whole firm run better and makes it significantly more profitable.
Well, it’s clearly a system that is working. Thanks for taking the time to chat, and congratulations on another successful year at Boies Schiller!
Associates at the 16-year-old Cravath spin-off received extra payments of $85,000 apiece on average this year based on a combination of factors that included hours billed, seniority, origination credit, client responsibilities and success premiums, according to Boies Schiller cofounder and managing partner Jonathan Schiller.
New associates who have been with the firm just a few weeks or months got bonuses of as little as $5,000 or $10,000, Schiller says, while those nabbing the fattest checks earned $300,000—substantially more than last year’s maximum of $250,000. The minimum amount awarded to associates with the firm for at least a year was the same as last year: $25,000.
“Fees are not just for partners,” Schiller says. “They’re for associates and for everyone who worked on a case.”
Boies Schiller Raises the Bar on Bonuses [DealBook / New York Times]
Earlier: Associate Bonus Watch (2012): Big Bucks at Boies Schiller
Associate Bonus Watch (2011): Boies Schiller Shellacks Cravath
Associate Bonus Watch (2010): Boies Schiller Sets the Bonus Bar
Associate Bonus Watch (2009): Boies Will Be Boies