Associate Bonus Watch: Kirkland & Ellis Returns To Shattering The Bonus Market Ceiling

You don't need to be drinking the Kirkland Kool-Aid to think that these bonuses are delicious. (But note the dissent from some non-share partners.)

In last year’s Kirkland & Ellis bonus post, I wrote that K&E “has a colorable claim to being the nation’s best overall law firm. It’s so big, it’s so profitable, and it’s so strong across such a wide range of practice areas.” I wasn’t shocked when Kirkland took the #2 spot in the inaugural ATL Law Firm Rankings, which we released earlier this year.

Kirkland did well in our Above the Law rankings despite 2013 bonuses that drew mixed reactions. They were better than the Cravath bonuses — back when Cravath set the market, remember those days? — but as one K&E source put it, they were “[n]ot the market-shattering bonuses of yesteryear.”

In 2014, Kirkland has returned to form. And it’s a good thing too, since (1) market-level bonuses are so much higher this year, thanks to Simpson Thacher and to Davis Polk, and (2) if Kirkland is dropping $8 million or $9 million to lure star partners, it better pay its associates handsomely too.

For those of you not familiar with K&E bonuses, here’s how they work. As we’ve explained before, K&E bonuses are individualized — based on seniority, hours, and performance (e.g., “above class,” “with class,” “below class”) — but even the lowest-paid Kirkland associate usually beats the market. And that seems to be the case this year, based on what we are hearing:

  • “K&E bonuses are gigantic, generally 25 to 50 percent more than the Davis Polk scale, with some big billers even higher than that. This level of generosity was surprising, and people are elated.”
  • “Associates are universally thrilled — Kirkland crushed the Davis Polk numbers. No one got lower than Davis Polk, and the vast majority got substantially more (many 1.5 times DPW). Top bonuses worked out to about 50% of base comp and exceeded six figures. I’m a mid-level with low hours but good reviews, got 1.25 DPW.”
  • “K&E bonuses killed it. This is the first year the partners did a town hall presentation on bonuses that I can recall, and I can see why. The presentation slides showed that our bonuses ranged anywhere from 1.25x to over 2.0x the DPW scale (DPW scale is the floor, it seems).”

Here are some individual data points (made more vague to protect anonymity):

  • “Third-year associate, more than 2500 hours and above-class rating, more than $100K [DPW amount: $50K].”
  • “Kirkland Chicago, 2011 class, over $50K [DPW amount: $50K].”
  • “Just got my bonus call at Kirkland. Class of 2012, over $30K [DPW amount: $25K]. Quite pleased. Happy holidays indeed!”

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Riffing off of the car comparison from yesterday’s Sidley post, one K&E tipster said, “If we’re Audi, then we’re a fleet of R8s.”

Is your firm being left in the dust by Kirkland? We are working on a post about Biglaw bonus laggards, and we welcome your input by email or by text message (646-820-8477).

UPDATE (4:15 p.m.): After this story was published, we heard from a dissenting voice: “I can assure you that people are NOT universally happy with bonuses. I am a non-share partner, with decent hours and strong reviews, and I got less than 125% of market. A couple of years ago, people were getting multiples of NYC market. As a ‘partner,’ I was also privy to the firm’s revenues and distributions per share at the October meeting. This was the firm’s best year ever financially. Very disappointed.”

But probably not as disappointed as the huddled masses over at Sidley.

UPDATE (4:30 p.m.): Perhaps K&E bonuses were better for the more-junior classes? Here’s another dissatisfied non-share partner: “Kirkland is smarter than the average bear. All that stuff you are posting is the firm’s own messaging. I am class of [x], ranked [above class]. I billed [more than 2000 hours] and received about 10% more than DPW’s bonus for an ordinary associate of my vintage. I should have gotten at least that much if I was WITH the class…. For our class, they did not shatter the market. They paid us the merit component plus $60-something thousand plus 30 bucks an hour for every fifty or hundred hours over 1900.”

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UPDATE (6:00 p.m.): More dissatisfaction, this time from a senior associate: “Kirkland didn’t ‘shatter’ s**t…. Did they pay more than market? Yes. But it’s nothing like what it used to be. 2011 was the last truly good year for bonuses here as far as truly beating the market. In the last three years, my rating and hours have been very similar. Every year, my bonus as a multiple of NY market rate has gone down. This year I’m less than 1.5x. Back in the day, associates were getting multiples. 2x used to be a baseline. At least that’s what Kirkland presents itself as paying to law students. It’s hogwash these days.”

“The tipsters you’ve heard from so far sound like a bunch of first / second / third years who don’t know what it was like back in the day. They represent the new culture, which I’m sure is exactly what the firm wants to happen. Get associates used to being just slightly above market (while still demanding extraordinary work at all hours). Profit.”

“Look, at the end of the day, I don’t want to come off as unappreciative. We did beat the market. The bigger deal is there’s a compensation culture shift going on at Kirkland that no one in the legal media is really picking up on. I get the sense that the drive for ever-higher PPP is putting real pressure on end-of-year compensation decisions. Paying lateral equity partners $8 million and $9 million guaranteed per-year contracts can’t be helping either.”

“We used to be like a Boies. We’re becoming just a ‘Cravath+.’ That changes the culture for the people who, ostensibly, will become your partners one day if they decide to stick around. Maybe that’s fine. Or maybe it’s short-sighted by the firm leadership.”

UPDATE (11:20 p.m.): “I’m a 2011 grad and have billed about 2400 hours all three years. First year, market was $10k and K&E beat market by just over $10k. Second year, market was $14k and K&E beat market by just under $10k. Third year, market was $50k and K&E beat market by $10k. Not a good trend, and certainly not ‘shattering’ anything.”

UPDATE (12/22/2014, 5:45 p.m.): “The complainers are probably lit associates. The Firm’s transactional practices (corporate, real estate, restructuring) totally murdered the competition this year in terms of deal activity, with many, many associates billing 2400 hrs+. Litigation was (as it always has been) relatively slower on a per-associate basis, since there is relatively less lit work, there are so many more lit associates to go around, and some large lit projects slowed down this year.”

“All the transactional associates and non-share partners that I have spoken to have been very happy with their bonuses. Personally, I am a midlevel in Chicago and billed over [2500] hrs and got well over [twice the DPW scale]. I know a number of transactional people who got 1.5x-2.0x (or more) than the DPW scale. Also, given how lucrative / higher-margin transactional work was, I wouldn’t be surprised that at least SOME transactional associates got a little bit more as a result of the very high margins in those departments relative to lit (which is much less lucrative for the Firm) (but that is pure speculation).”

“Needless to say, in general, folks are very, very pleased with their bonuses after the firm had a truly spectacular year.”

Earlier: Associate Bonus Watch: Kirkland & Ellis Shatters Kinda Scratches The Bonus Market Ceiling
Who Is Biglaw’s $9 Million Man?
Who Is Biglaw’s $8 Million Man?
Associate Bonus Watch (2012): Kirkland Associates Did Better Than Cravath, But Not All Of Them Are Happy
Associate Bonus Watch (2011): A Nice Bonus At Kirkland & Ellis
Bonus Season Comes Early! (And It’s Not Cravath — It’s Simpson)


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