Associate Bonus Watch: Massive Disappointment At A Major Firm
These associates aren't just disappointed; they're angry.
Ding ding ding, we have a “winner” — for the most anger-inducing bonuses of the 2014 season. Until today, that distinction belonged to Gibson Dunn on the West Coast. But the disappointment that some GDC lawyers voiced about getting Simpson-level bonuses — which was, for the record, balanced out by better bonuses in New York and also to certain high performers outside NYC (see our updates to the post) — is nothing compared to the reactions of sadness and even anger we’ve been hearing from associates at Sidley Austin.
As you may recall, Sidley does individualized bonuses, based on “the quality of an associate’s work,” as well as “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.” Even though the memo states that quality of work is “the most important factor,” tipsters tell us that hours play a major role.
Based on the many tips we’ve received, this comment on our most recent bonus post, which garnered more than 20 “likes,” accurately captures Sidley bonuses this year:
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Bonuses were embarrassingly low. If you billed 2000-2200 you got below market (ranging from $5,000 to $50,000 below market depending on seniority level). Between about 2200 and 2500 you got roughly market. If you billed over 2500 hours (and survived), you got slightly above market.
There is uniform dissatisfaction among the associates I’ve heard from (even if they got ‘above market,’ i.e., if they were extreme high-billers). Morale is extremely low and defections will begin very soon for those who are able to lateral.
The galling aspect is there is no reason for the firm to treat us this way; partners have openly gloated that this is easily the firm’s best year ever.
By “market,” the tipster means the Davis Polk scale. If you wanted to get a DPW bonus at Sidley, you needed to bill insane hours (unless you were in New York, where it seems the threshold was a bit lower).
UPDATE (4:50 p.m.): To expand on the NYC point a bit, Gotham associates got better treatment. As one of them told us, “In New York litigation, juniors have been getting market or better (with higher hours), and seniors have been getting Davis Polk market.”
Outside New York, many folks got Simpson-level bonuses or even less, as a different tipster told us:
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The bonuses have disappointed a ton of us at the flagship office [in Chicago]. I know at least a dozen people who were bonus-eligible (i.e., at or above 2,000 hrs) who got either the (initial) Simpson bonus or less, and in at least a handful of cases, significantly less. Honestly, I’m not surprised that we didn’t match DPW given how cheap (or should I say, “fiscally conservative”) the firm is, but in prior years we could have said with a straight face that Sidley paid market if you made your hours and more than market if you’re a high-biller. The bonuses this year look particularly bad because the firm paid its bonuses way later than usual which was probably caused by the deliberation on whether or not Sidley should engage in parallel behavior. Since they took so long and mismanaged expectations, they should have matched the initial Simpson scale across all classes.
Solely with respect to Chicago, there was a time when Sidley could market itself as a Mercedes in many respects. Back then, an Audi (Kirkland) just did not have the prestige of a BMW (Winston), let alone a Mercedes. But while Audi made leaps and bounds in its design, quality, finish, engine and reliability, Mercedes just made incremental changes cuz it thought its name would carry the day (or half-decade) as far as recruiting was concerned. In the last few years or so, Audi has surpassed BMW and, most non-Mercedes folks would not hesitate to say, even Mercedes, in most respects. The cumulative effect of these changes by Mercedes and Audi is that the former now looks like an Acura (or an Infiniti, at best) and the latter looks like a Porsche. Whatever brand of car Sidley thinks it is, if it wants to portray itself as a luxury car, leather seats should come standard. Don’t try to shortchange us by offering leatherette (actually, this year it’s more like textile). We want a luxury car that not only runs on premium gas but also pays the full price of such high-octane gas.
I’m sure I could have refined the above or come up with a better analogy, but since I’m tired and will soon be looking to jump ship the above will have to do.
Actually, I like the tipster’s car analogy. I just wonder how far back you’d have to reach in time for Kirkland to be behind Sidley and Winston in prestige in the Chicago market; I feel like K&E has been top dog in Chicago for quite some time now.
These two comments are representative of general sentiment out of Sidley. Because Sidley bonuses are individualized, in years past we have sometimes had to do multiple Sidley posts — one quoting people happy with their bonuses, and one quoting people disappointed with their bonuses who objected to the original post (or vice versa). But this year, feelings on bonuses are overwhelmingly negative.
Could the associate outcry and negative coverage cause Sidley to sweeten its bonuses, along the lines of firms that announced Simpson bonuses and later upgraded to Davis bonuses? It would be nice — ATL is always happy to help associates pay off their law school loans faster — but I tend to doubt it.
Why? In Sidley’s defense, matching Davis isn’t cheap. This piece in The Economist cites a partner at an unnamed firm claiming that its “reluctant[]” match of DPW cut into partner profits by 4 percent — not an insignificant number given how closely profit-per-partner figures can fall in the Am Law 100 rankings. The New York-based, capital-markets-centric firms paying the big bonuses — Davis, Simpson, Cravath, S&C, Cleary, etc. — have benefited from the boom in M&A work this year to a much greater extent than Sidley.
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UPDATE (12/24/2014, 11:15 a.m.): A source not in New York or Chicago piped up in defense of Sidley: “I think Sidley is getting a bad rap. I billed 2400 and got $5K over the market rate. It seems pretty consistent that Sidley paid above-market for high billers. Almost everyone in this office is happy with the bonuses, but we billed a lot this year. Though it is unfortunate that people who billed 2200 weren’t given any kind of high-biller bump. I think 2200 is replacing the old 2000-hour threshold.”
(Flip to the next page for the full Sidley memo and collected reactions from many (mostly disgruntled) Sidley sources.)