Associate Bonus Watch: A West Coast Round-Up

A mixture of satisfaction and sadness from Silicon Valley and San Francisco.

Even though the technology industry seems to be thriving, with the past year or two bringing major IPOs, M&A transactions, and funding rounds, the law firms famous for servicing the tech sector have been issuing somewhat lackluster bonuses. We’ve previously covered the bonus announcements of Wilson Sonsini and Fenwick & West, for example, and both generated reactions of disappointment and even anger.

Today we bring you bonus dispatches from four firms with strong presences in northern California, i.e., San Francisco and Silicon Valley, and strong rosters of tech clients. They’re a mixed bag — some good news, some bad news, and some disagreement between our sources.

1. Orrick. Just a quick update. We previously covered Orrick’s well-received announcement of its general approach to bonuses. Now that individual bonuses have been announced, to be paid on Friday, February 27, the firm has provided information about the distribution of those bonuses.

We haven’t heard much from our Orrick sources — if you’re at Orrick and would like to opine, email us or text us (646-820-8477), and we will update — but the distribution strikes us as reasonable. Compared to last year, the percentage of Orrick associates getting above-market bonuses is lower, but remember that the “market” — which Orrick takes as the Davis Polk scale, unlike certain other firms — is so much higher this year.

What do you think of the Orrick bonuses? Flip to the next page to see the full Orrick memo and judge for yourself.

2. Morrison & Foerster. For its non-New York associates, MoFo kept it simple this year: if you made your hours, you’re getting the Davis Polk scale, payable with the February 28 payroll. You can see the complete memo on the next page.

Paying DPW bonuses across the board struck me as good news. As one of our MoFo sources said, the announcement amounted to “giving Wilson Sonsini the finger”; at WSGR, you have to bill 2400 hours to even have a chance at Davis Polk. Said this MoFo source:

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After Wilson announced, there was some concern that MoFo would follow suit (at least in California). Wilson’s high bonuses were (barely) tolerable, but its median and low were pathetic. Most I’ve spoken with are happy that MoFo kept it simple.

We did, however, hear dissent from a different associate:

MoFo just gave a giant ‘F**k you’ to its high performers. Everyone doing more than the bare minimum is pissed. I’m sure the people who barely hit 1950 are happy as clams, but for the relatively small group who pick up slack for the rest, this is an extended middle finger. Partners and associates are surprised by the move, and all I’ve spoken with agree that it is a big disincentive for anyone who has been pulling the weight of the 9-to-5 crowd.

Bonus is traditionally based on hours and evaluation, though those are highly correlated. [In past years, t]hose with good evals and high hours always beat NY. Those with great evals and very high hours blew NY away.

We took this assessment back to our original tipster, who simply responded, “Ultra-high billers will always find cause to complain.”

3. Cooley. Well, grumpy MoFos, look on the bright side: your DPW bonus is still better than what many some are getting at Cooley. Another top tech firm, Cooley gets high scores from associates as a workplace — it enjoys an A-minus grade on the ATL Insider Survey, and it appears often on “best places to work” surveys — but this year associates seem displeased by their bonuses. Here’s what one source said:

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Very disappointed in the Cooley bonuses. I’m [a senior associate with strong reviews] and got [more than $25K below DPW]. The memo they sent out said that “they are not beholden to the NYC paradigm.” Clearly not.

At least this person is disappointed rather than furious (unlike associates at various other firms we’ve covered):

People are just kind of camped out in their offices; definitely some stewing/brooding going on, but I’m sure it could be worse. I had [three colleagues] stop by on Friday, one of whom openly threatened to quit. In fact, I lost [a lot of time last week due to] people complaining, or my bosses trying to convince me how wonderful things were despite the bonuses. I heard that they were intending on matching the $100K scale up until just a few days before bonuses were announced.

Certainly WSGR going cheap didn’t help (Cooley seems to always look to WSGR), but I think the main thing was that certain partners complained when they heard Cooley was going to match DPW. Also frustrating is that getting 2100 hours (rather than 1900) previously has always added a boost to the bonus, but nominal, like $3-$4K. I think this year it made a bigger difference ($10K or so at the top), which seems unfair without prior warning, as some of us could have met that higher threshold had we be incentivized to push a little harder in November and December.

The real problem is that by bonus time, the work is done. And yet, then the entirely of the decision of what we get paid for our work bonus-wise lies in the hands of management. I’d be much more incentivized if at the beginning of the year, they laid out the bonus scale: you meet [X] hours, you get $[X]. Then, if the market changes, great, do it prospectively, at least that way you don’t feel like money was stolen out of your pocket in the end. Note also — the Cooley memo upped the minimum billable requirement for next year from 1900 to 1950 (not really that suprising).

Everyone appreciates that you bring what would otherwise be a total black box to the sunlight. I bet by next year Cooley pays a little closer to the current DPW scale, if not matches it altogether. This year they had the expense of opening London and they acquired that (crappy?) law firm Dow Lohnes.

Cooley is a firm on the rise — it had the biggest upward move in last year’s Vault 100 — so here’s to hoping that its bonuses follow suit.

UPDATE (2/4/2014, 1:00 a.m.): Or maybe Cooley’s bonuses are already just fine? Several sources wrote in to defend them:

  • “Cooley senior associate here. Did not have high hours by Biglaw standards, but was comfortably over the firm minimum for bonus eligibility. Very strong reviews. Matched DPW.”
  • “I’m a senior associate at Cooley and got DPW. Almost everyone I talked to got DPW or higher (or at least seemed very happy with their bonuses). I wanted to make sure the partners understand that there are a lot of us who are really grateful for these bonuses and understand that Cooley is a much happier and healthier place to work than most New York (or any other) Biglaw.”
  • “I’m a midlevel associate with strong reviews and high hours and I received a Davis bonus. I’m comfortable with that. I know I could get slightly more at some other firms, but I’m far too satisfied with my overall experience at Cooley to consider a move… and it seems unbecoming to complain about a check that is larger than my public interest and government friends’ annual salaries.”

(This is what’s tough about covering individualized bonuses. We don’t know if our happy or unhappy tipsters are more representative of overall sentiment, and we don’t have a full breakdown of the distribution of bonuses either.)

4. Gunderson Dettmer. Some of you young’uns might not be familiar with Gunderson Dettmer, but you arguably owe it a debt of gratitude without knowing it. Back in 1999, this tech-centric boutique started offering new associates a starting salary of $125,000 — a rate that eventually migrated to bigger law firms in the tech space and then to Biglaw writ large, laying the foundation for future salary bumps.

Anyways, it seems that Gunderson’s days as a compensation leader are behind it. The firm announced bonuses a few weeks ago — sorry for the late reporting, we don’t have as many tipsters at Gunderson — and they did not impress:

Upset mid-level here. I’m hesitant to share our very disappointing bonuses because I’d hate for the other SV-based firms to use our paltry bonus levels against their associates….

I’ve talked to 10-15 associates and the bonuses (even for those in good standing: >1950 hours) range from as low as .6X (Simpson I) to .85X. I’ve heard a small handful of >2400 performers who received market. It’s crazy that at one point in the last decade we led the market in comp and now we’re tier 2 at best. Having said that, I’ve heard rumors that our NYC associates received closer to market.

The bonuses are insulting because 2014 was one of the firm’s best-performing years since we formed in 1995. Sadly, I’m hearing chatter from good associates looking for greener pastures.

And that, in the final analysis, is what you can do if you’re unhappy with your compensation: you can vote with your feet. The lateral market isn’t bad these days; it’s not like it was back in 2009.

And, of course, please let us know about bonus news, whether good or bad. Here at Above the Law, we need your help in bringing transparency to the subject of Biglaw bonuses. If you want to chime in about these four firms’ bonus announcements or any other bonus news, just email us or text us (646-820-8477), and we’ll update. And feel free to flip to the next page for the full Orrick and MoFo memos.


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