Associate Bonus Watch: O'Melveny & Myers, Winston & Strawn, And More About Morrison & Foerster

A fresh bonus announcement, a change of heart, and a hope for enhanced payouts.

One of the factors that has made this latest bonus season so fun is watching firms change their minds. In the past, once a Biglaw firm announced its bonuses, those were the bonuses. But this season, we’ve seen after-the-fact adjustments from several firms — including Gibson Dunn, Baker & McKenzie, and Hogan Lovells — after expressions of associate dissatisfaction (in the pages of Above the Law and elsewhere).

Today we bring you news about one firm’s change of heart on bonuses and another firm where certain associates are desperately hoping for an about-face. But before we get to those stories, let’s cover an announcement from one firm that has not yet announced any bonuses until now — O’Melveny.

1. O’Melveny & Myers. The bonus news at OMM is pretty straightforward. The firm is matching the Davis Polk scale, and people are pleased:

  • “Got a voicemail with the bonus scale. Associates are getting DPW scale as a baseline if firm expectations are met. The firm may give individual bumps. Bonuses will be paid at end of Feb. Haven’t had any individual meetings yet.”
  • “O’Melveny & Myers sent out a firmwide voicemail matching DPW, reviews start the 17th, so we’ll see how individualized it is soon.”
  • “O’Melveny matches Davis Polk scale in U.S. offices. Bonuses are individualized with adjustments for quality and hours. But DPW is starting point. People happy.”
  • “O’Melveny just announced ‘starting-point’ bonuses to associates and counsel via voicemail. Individual bonus determinations have not yet been made, but the scale for class years 2007-2013 matches the Davis Polk scale. Hooray!”

Hooray indeed. Congrats on the DPW bonuses, OMM associates.

2. Winston & Strawn. Back in December, Winston announced bonuses on the original Simpson Thacher scale — and we wondered if W&S might step up to the higher Davis Polk scale. The answer is yes — as long as you’re in the New York office:

Said a source: “New York is happy that W&S made us whole, but we are concerned that management of a ‘market’ firm tried to underpay and hoped we just bent over and took it. Hopefully they learned their lesson.” (Here I must object to the tipster’s reference to “bending over and taking it” — does anyone else remember the Aaron Charney case? — but I get the source’s point.)

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One of the big themes of this bonus season has been the reemergence of the New York/non-New York divide. Winston isn’t the only firm giving better bonuses to its NYC associates compared to their counterparts out in the hinterlands in other parts of the country. See also, e.g., Arnold & Porter and Hogan Lovells.

3. Morrison & Foerster. When we covered the MoFo bonuses earlier this week, we noted a difference of opinion between regular and high billers. The regular associates seemed happy with MoFo’s adoption of the Davis Polk scale, but the high billers sounded displeased.

Since that story, we heard from one such high biller, who explained the anger:

(a) Every year, months before bonuses are announced, partners lobby the firm’s leadership for market multiples for the very best associates in their groups.

(b) Months, sometimes 3-4 months, before bonuses are announced, the partners then tell their very best associates on a strictly confidential basis that they will receive market multiples.

(c) Those associates rely on those promises and bill well in excess of 2.5K hours through the holidays.

(d) MoFo’s announcement earlier in the week therefore is in effect a RETROACTIVE adjustment of the compensation of its VERY BEST associates.

(e) Those associates are up in arms.

(f) The partners who lobbied for them, and who were kept out of the loop about the leadership’s decision to RETROACTIVELY change compensation, are up in arms.

(g) After the initial announcement and the associates’ understandable anger, the leadership had the galls to send out a confidential email to partners indicating that the bonuses will NOT change, despite complaints.

(h) The firm’s leadership is in Japan but nevertheless have now been bombarded by complaints from partners who made promises to their star associates, which promises were made AFTER CONSULTING THE LEADERSHIP.

(i) Prospective changes in compensation is one thing, but THIS IS A RETROACTIVE CHANGE TO COMPENSATION OF THE VERY BEST ASSOCIATES MOFO HAS. It is dishonesty and arguably theft from the people WHO SHOULD MATTER THE MOST.

Dissatisfaction duly noted. This year is perhaps a bit different from prior years in that Simpson Thacher followed by Davis Polk set the bonus bar so high. With the Davis scale starting at $15K and going all the way up to $100K, is it reasonable or realistic to expect a multiple of those amounts?

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On the other hand, a great (and high-billing) associate is worth her weight in gold. Will MoFo’s top associates, backed by their partner patrons, succeed in getting supplemental bonuses? Stay tuned.

Earlier: Associate Bonus Watch: 5 Firms Foster Frustration


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