Associate Bonus Watch: Furious Associates At A Major Law Firm

Will the firm do anything about it? That's not so clear.

When we covered Mayer Brown’s bonuses outside New York earlier this month, our story contained a bit of a cliffhanger. We noted that the firm increased the discretionary component of its bonus pool by 23 percent and the total associate bonus pool by 15 percent, as stated in the memo from managing partner Ken Geller, but wondered if that would be enough: “Will individual Mayer associates be pleased or displeased by their individual bonuses? We’ll have to wait for that.”

A few weeks later, the verdict is in: Mayer associates are very displeased by their bonuses. Here is one representative (and comprehensive) message:

Perhaps you have already received information about non-NY Mayer Brown bonuses, but in case you haven’t, the associates are extremely unhappy. Livid, in fact. To say that the firm’s bonus memo was misleading is an understatement. Outside of New York, Mayer Brown did not come anywhere close to being competitive with peer firms. In particular, 3rd year associates on up got completely hosed, receiving bonuses that were 30-50% below the Davis Polk scale, even for the highest rated associates billing 2200-2500 hours. The Committee of Associates tabulated a large list of bonuses, and associates got around $35k to $50k for class of 2010, $40k to mid-$50k’s for class of 2009, and $40k to mid-$60k’s for class of 2008. This includes associates with excellent reviews/ratings and high billable hours (2300-2500). It is simply untrue that our bonuses were competitive with peer firms (as the MB bonus memo promised).

The Associates Committee presented these numbers to firm leadership and the Compensation Committee, and the firm doesn’t dispute that bonuses were much lower than our peer firms. The only response, however, has been a bunch of internal finger pointing. The firm leadership and Compensation Committee have tried to say that the practice group bonus pools were large enough that associates could be given market bonuses. The practice group leaders, on the other hand, say they didn’t have enough money to give out competitive bonuses, or they came up with various other rationales for low bonuses. In the end, the firm appears unwilling to do anything to fix the issue. A number of associates are already in the process of looking for other jobs, but it seems that the firm simply doesn’t care. As several partners have said, associates should expect the same treatment next year because the firm management probably feels like they got away with it. Well, here we are….

In the wake of the associate anger, meetings between associates and management took place. But it doesn’t sound like those meetings were terribly productive, according to a second source:

Management is hosting meetings and trying to ease the environment… but associates are upset. Also management is trying to “deflect” the anger by saying “oh sorry you are upset about ur bonuses we never meant to upset people by giving extra money” — basically trying to act like we associates are acting entitled and not seeing that Mayer Brown is behind market.

Here’s a third tipster’s account of one of the bonus meetings, which gives some insight into what the firm’s approach appears to have been:

I just got out of the post-bonus damage-control meeting with Mayer Brown leadership about our abysmal 2014 bonuses. Leadership reported that no one is happy with bonuses outside of New York. Under the new discretionary system, the firm paid bonuses to a number of generally junior associates who missed hours. To pay for their generosity to the underutilized (associates who are not in demand and are less likely to be on the partnership track), the firm didn’t kick in more bonus money overall but instead shaved everyone else’s bonuses — and dramatically. A typical bonus for litigation mid-level and senior associates was less than HALF of the Davis Polk scale (which begs the question whether there would have been enough money to meet the market even without the redistribution to low billers). Meanwhile, leadership, who says they’ve been caught off guard by the near-universal discontent, continues to insist that bonuses were “competitive” but refuses to identify with which firms. They have made it clear that they won’t be paying anything more.

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So is Mayer Brown standing by its bonuses? We reached out to the firm, which provided this statement:

Mayer Brown’s bonus program for our U.S. offices outside of New York is a hybrid system, whereby only a portion of the bonus pool is allocated on the basis of hours, and the remainder is allocated on a discretionary basis. Many associates were consulted in devising this system, including various associate committees and individual associates. Since a significant portion of the bonus pool is allocated on a discretionary basis, bonuses can vary greatly by practice area and class year. That means that some associates received bonuses above the Davis Polk scale, and others received less. Every associate who billed 2,100 client equivalent hours (which includes pro bono hours) or greater received a bonus. At the same time, a significant percentage of associates who did not meet the 2,100-hour threshold also received a discretionary bonus. Finally, in recognition of the value of our associates and their world-class client service, our 2014 bonus pool was significantly larger than the 2013 bonus pool.

It’s essentially a restatement of the Geller memo. It strikes me as the firm’s polite way of telling associates not to expect additional money.

So where does this leave things at Mayer Brown? Will some associates, especially those with strong reviews and high hours, start eying the exits? Flip to the next page for a collection of reactions from upset associates….

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