Associate Salaries, Biglaw, Bonuses, Partner Profits

Orwellian Law Firm Says Its Lawyers LOVE Their Lack Of Transparency

“No, I’m cool that you might be making twice as much even though you skipped out to go to the Katy Perry concert.”

Propaganda is only partially about justifying horrible things to the masses. It’s also about salving the doubts of the oppressors. How can they be wrong when there’s a 70-foot statue dedicated to their divinity right there?

The slow march to opacity is one of the single worst developments in the Biglaw model over the last several years. Whether in the name of some half-baked strain of libertarian idealism or just to keep from being publicly judged by ATL readers, a few firms have increasingly moved compensation packages into a black box, starting with complex bonus award structures, then hiding even those frameworks, and now some even hide base compensation.

It’s an awful practice, and while some have the reputation to get away with it, it’s certainly frowned upon by lawyers and prospective lawyers steeped in the notion that this is a collegial profession.

So one firm put their public relations flaks on drafting a spirited defense of their black box so they can sleep better at night….

Jones Day has been beating the opacity drum for years. Back in 2009, the firm was touting its efforts to keep the staff in the dark as the reason it avoided mass layoffs. That… didn’t make much sense then and it still doesn’t. So they’ve come up with a new line to drop:

Confidentiality

The financial relationship of a lawyer to Jones Day is confidential. Other than the very small number of people who advise the Managing Partner on these issues, no partner at Jones Day knows anything about the amount of income allocated to any other partner. Similarly, associate compensation is also confidential, for the same reasons: Jones Day compensates its associates individually, not by lockstep and certainly not based on some billable hours formula, and thus every associate’s compensation is the product of his or her individual contributions, and cannot be fairly compared to any other individual. What is sometimes critically referred to by those outside Jones Day as a “lack of transparency” is almost universally viewed inside Jones Day as one of its great strengths. This confidentiality removes any temptation to try to compare apples and oranges; it eliminates the chance of creating inappropriate comparisons and jealousies; and most importantly, it does not allow even the possibility of creating barriers to the effective interaction of all Jones Day lawyers. It is instructive that the strongest supporters of this system inside Jones Day tend to be those lawyers who joined us from other firms with more “transparent” compensation systems, who understand the distractions and internal tensions that such systems frequently generate, and the barriers to effective client service they can become.

War is peace, y’all.

I’m not saying there might be some souls out there happy with this arrangement. There’s definitely someone making way more than their colleagues and feels (rightly or wrongly) that disclosure would breed resentment rather than respect. But a compensation system that is neither lockstep nor based on a billable hours formula sounds an awful lot like “because one guy decided he liked you more.” As they say, pay “cannot be fairly compared to any other individual,” meaning it can be compared… just not in any fair or comprehensible way.

Now for a contrary view, I’ll quote Elie from 2009:

If you are fairly compensated and happy with what you are earning, why should you care about how much the guy down the hall is pulling down?

For a whole lot of reasons! First, transparency is the most important quality in a law firm, speaking to the level of collegiality and professionalism — valuing all attorneys as members of a team. It speaks to trust because a firm willing to treat everyone like adults is a firm worth respecting even when you disagree with them. And it also speaks to the long-term vision of the firm, because a lockstep organization expects everyone to pull their weight, and if they do the vagaries of business cycle spurts should reflect less negatively on any one individual.

Second, there’s the very serious concern that opacity drives discriminatory practices. Only this week we learned that a lack of transparency at universities and law schools drove as much as a $44,000 pay gap between male and female professors. It’s also one of the themes of the Jill Abramson firing at the New York Times, after documents revealed she’d consistently been paid less than her male counterparts throughout her career. Without ascribing to the Pollyannaish worldview that there’s no risk of racial or gender discrimination in pay, the only means of effectively deterring or combatting the scourge is through transparency.

Finally, it’s just poor management. One of the biggest errors in management is failing to recognize the dynamic motivational power of salaries. Transparency inspires employees to emulate the behaviors of those making more. Presumably, the company is appropriately paying better employees more money.

Maybe when the firm says that pay “cannot be fairly compared to any other individual” they’re just admitting they do a terrible job of valuing their employees and hope no one finds out.

Or would say that if they didn’t believe their own spin.

Jill Abramson’s Salary Is Revealed, and It’s Lower Than Her Male Predecessor’s [New York Magazine]

Earlier: NALP 2011: Law Firm Transparency – From Black Boxes to Glass Houses
Jones Day: Secrecy Breeds Strength?
This Law School Pays Male Faculty $44K More Than Female Profs

24 comments
(hidden for your protection)

comments sponsored by

Show all comments

Our Sites

  • Above the Law
  • How Appealing
  • ATL Redline
  • Breaking Defense
  • Breaking Energy
  • Breaking Gov
  • Dealbreaker
  • Fashonista
  •