Associate Bonus Watch: Bitterness At A Biglaw Behemoth
A caveat tacked on to the end of this firm's bonus memo really ticked off our tipsters.
DLA Piper picked a peck of pickled peppers — and served them to its associates as bonuses. Not surprisingly, they left a sour taste in most mouths.
In terms of total revenue and headcount, DLA Piper currently ranks #2, according to the American Lawyer’s latest Global 100 rankings. Sometimes it takes the #1 spot; DLA and Baker & McKenzie basically go back and forth.
If you need a lawyer in Bujumbura — that’s located in the country of Africa, in case you’re wondering — then call DLA Piper. If you’re looking for a NYC market bonus, turn elsewhere. Some representative reactions:
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- “Sincerely disappointed in how below market DLA NY was this year in awarding associate bonuses, especially in light of the fact that partners made budget this year and got full comp.”
- “They work you hard at DLA, have skimpy support staff and awful medical insurance, and then they shortchange you on your NYC bonus — and expect you to go about your business whistling a happy tune. For a bunch of smart partners, they have zero emotional intelligence.”
- “Bonuses are less than half the going NYC rate. They’ve lost a lot of first-rate associates in the past 18 months and with this stupid move — with the morale already lackluster because of DLA’s excessive penny-watching ways, and lack of support staff — they’re going to lose a lot more.”
- “By all accounts, bonuses are way below Davis Polk scale, even though they claim they are paying ‘market.'”
How much below DPW are we talking? It’s tough to tell because DLA Piper bonuses are all individualized. As one source reminded us, the bonus memo has “no scale or class info like always — the firm doesn’t give any info to associates because they are just cogs (the firm model is just lateralling rainmakers, not growing talent).” But we hear that even associates with strong hours and reviews are generally getting 50 to 60 percent of Davis Polk — for example, a class of 2009 associate reported receiving under $50,000, when the DPW amount is $80,000.
Here’s what really infuriated a number of DLA Piper sources. The following language — an “obnoxious caveat” that was absent in prior bonus announcements, according to one tipster — appeared at the end of the memo:
Market Data: In addition to individual performance evaluations, in determining the amount and schedule of associate bonuses, the firm considers a wide range of market data, including what we understand to be the practice of other firms, similarly situated. No two firms are identical, however, in terms of practice, scope or their own practices with respect to associate compensation. Based upon a review of the totality of practices of our competitor firms, we are confident that the bonus amounts and schedule represent a fair and market-based approach.
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DLA Piper associates — the ones we’ve heard from, anyway — do not view their bonuses as “fair and market-based.” In New York, associates voiced their concerns to management, but it’s not clear that anything will change:
The associates’ committee met with the New York managing partners and the partners said they didn’t expect the bonuses to change. As a result, the majority of the mid-level associates are up in arms and on the phone with recruiters non-stop. There will be a mass exodus of DLA mid-levels unless the partners do the right thing and up the bonus amounts to market levels. Everyone I’ve spoken to is looking to leave.
On the day that bonuses came out, according to a different source, “laterals were swearing, on the phones earnestly with headhunters at 5 p.m. today. Literally every lateral who joined DLA in the last few years is now earnestly looking for work elsewhere. A bad, bad judgment call for DLA.”
DLA Piper associates: do you agree that the firm has made a misjudgment? Feel free to email us or text us (646-820-8477), and we’ll update.
UPDATE (2/4/2015, 2:30 p.m.): Here’s what one New York associate had to say:
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My bonus was [roughly 60 percent] of DPW “Market.” DLA has a merit+productivity scale that balances final performance rating with hours billed.
When DLA introduced this black-box, opaque compensation scheme, it was marketed as a system that would provide an opportunity for associates who were top-ranked and had high billables to beat the market. Confirm that this actually happened in the first few years after roll-out, including as recently as last year for a very few. This year, I have heard of nobody “beating” market, and most are substantially below, percentage-wise. I suppose it is possible that, this year, DLA’s purported “market competitive” bonuses were distributed to a tiny percentage of associates who received the highest performance rating and billed 2450+. But sense, anecdote and the rumor mill indicate that it’s probable that at least 90% of associates either received no bonus or were under-compensated compared to firms that DLA itself considers competitors.
The firm has not published its merit+productivity bonus matrix for the past several years and also hasn’t provided transparency into the number of hours required to get bumped up to the next productivity tier. This year, we learned near the end of the financial year that the productivity tiers are now 2000, 2150, 2450. The justification for not providing transparency into these tiers is that the firm doesn’t want associates to bill solely to meet productivity step-ups. That philosophy, admirable in principle, doesn’t align with the financial incentives actually in place — to be comped even remotely competitively, you must bill a lot.
The metrics keep shifting subtly, and one gets the sense that this is done intentionally, to avoid having to provide any real explanation for the fact that DLA does not comp at market. Bonuses are even more disappointing because the firm had a very good year. Associates were hopeful that our efforts would be rewarded.
(Flip to the next page to read a senior associate’s evaluation of how DLA Piper has evolved over the years, including some praise and some criticism.)
