Associate Bonus Watch: Which Firm Just Issued Supplemental Bonuses?

Is bonus "season" becoming a year-round phenomenon? Check out how this firm just sweetened the pot.

Is bonus season becoming a year-round phenomenon? Bonus news typically comes in the fall or winter. But tomorrow is the first day of spring, and today we have some fresh bonus news for you.

Of course, it’s not an initial announcement; March would be rather late for that. It’s a supplemental announcement, something we’ve seen a fair amount of in this most recent bonus season. A firm whose associates expressed displeasure with their original bonuses just announced additional payouts.

Back in December, the initial bonuses at Sheppard Mullin generated some negative reactions:

  • “Bonus news: Sheppard Mullin has confirmed that they will be paying out sh**ty bonuses because the ‘market has yet to fully develop among west coast firms.’ Top bonus of $37,500 for your most-senior associate with over 2100 hours for the year. Needless to say, what a joke!”
  • “Sheppard Mullin will continue following the 2011 Cravath bonus scale in 2014. Associates are particularly disappointed in this development in light of consistently increasing billing rates for associates at each level of seniority and, as associates speculate to be the case, a naturally accompanying rise in per-partner profits.”
  • “Sheppard Mullin bonuses. Terrible. By class year (keep in mind a significant chunk of people don’t get promoted every year): 7500, 10k, 15k, 20k, 25k, 30k, 37500, 37500. That’s for 2100 hours. If you only hit 1950 (the official hours target) you only get 2/3 of that scale. Some merit bonuses, but historically trivial. The firm says it may revisit the bonus amount in the coming months.”

And revisit the bonuses the firm has. We’re not talking Davis Polk bonuses — at least not until you hit the 2200-hour mark — but all things considered, they do seem eminently reasonable. As one associate puts it:

I was pleased and felt it was a well thought out approach to the issue given the firm’s economics and market position. Also nice to know they will listen to associates, even if it takes a few angry rants on Above the Law to get their attention. SMRH is really a great place to work as far as law firms go, and it’s reassuring to know they intend to continue to keep pace in compensation, particularly for the associates who are working the hardest.

Said a second:

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Associates seem pleased with Sheppard Mullin’s new bonus structure. The additional amount for those with exceptional hours is a nice surprise.

See also:

I feel that is market and fair. I feel that firm management did a great job of addressing the bonus issue. They clearly put a significant amount of time and thought into this, and developed supplemental bonus and a go-forward bonus system that I think reflects the market.

But see:

Sheppard Mullin decided to give supplemental bonuses. While associates are generally appreciative, it was very disappointing that they decided to penalize their best associates by subtracting discretionary (i.e., non-hours based bonuses) from the supplemental amount. Also, going forward associates are going to have to wait up to six months from the close of the billing year to receive their bonus.

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Discontent is the minority view; most SMRH associates seem very happy and grateful. And note also this enhancement to the firm’s pro bono policy:

Under current policy, Associates receive a maximum of 100 hours of credit toward billable hour requirements for pro bono work, except in New York City where there is no cap. Associates working on pro bono projects that will consume more than 100 hours have been invited to ask that the cap be removed. These requests have been freely granted, and Associates outside of New York City have received more than 100 hours credit. To simplify matters, we are removing the 100-hour cap in all offices. Hours charged to approved pro bono projects will be credited toward billable hours requirements in the same manner as client-charged time. Just as with client-chargeable hours, these hours are subject to normal adjustments for efficiency in performance of work.

Kudos to the Sheppard Mullin partners for doing right by their associates and for reaffirming the firm’s commitment to pro bono work. You can flip to the next page to read the full memo, including the two tables (for New York and non-New York offices).


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