Biglaw, Bonuses, Money

Associate Bonus Watch: Skadden Increases Its Minimum Hours For Bonus Eligibility

Get ready for some hardcore Skaddenfreude, because this firm seems to be screwing its associates.

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It may be November, but we’re still waiting for Biglaw bonuses to drop. Which firm will be the first to make its announcement? We can’t wait to see what this year’s bonus scale will look like.

While firms don’t seem to be rushing to announce the exact bonus payments associates will receive, some have been eager to announce major policy changes connected to those bonuses. Fried Frank, for example, alerted associates to its new 2016 bonus policy last month. The news was generally well-received, but not all Biglaw firms have been able to please their associates with new bonus policies.

Get ready for some hardcore Skaddenfreude, because last night, the firm announced during a meeting in its New York office that it would be increasing its hours minimum for bonus eligibility in 2016. Sources tell us that Skadden has universally raised the minimum bonus threshold from 1600 hours to 1800 hours. We reached out to the firm early this morning for confirmation, but have yet to receive an official response.

We’re told that his policy change was the result of management’s review of a three-year firmwide survey. Some associates who billed well above and beyond the minimum of 1600 hours felt it was unfair that they weren’t being adequately compensated for their hard work, and raised that issue in their survey responses. Others let the firm know that they simply weren’t being compensated enough, and would like a raise. Instead of providing associates with a more nuanced bonus structure, and instead of issuing base salary increases, management instead decided to make it harder for associates to earn bonuses.

Associates who have contacted us seem absolutely miserable about the news:

* Everyone in the room was awestruck and was taken aback by the announcement. Afterward they had a reception where all associates had to share one plate of cheese. It was humiliating. Everyone was openly shocked by the new hours made it WORSE for compensation at Skadden.

* I guess Skadden wanted to address associates who felt they weren’t adequately compensated for working a lot more hours than those barely making 1600, but this was not what they wanted. They were hoping for a tiered incentive bonus, not just a higher unilateral bonus threshold across the entire firm.

* No one is happy in the NY office. This news will be extended to all the other offices.

Skadden: where there isn’t enough cheese to go along with its associates’ whines.

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According to another source, news of the increased hours target was delivered via slideshow at the meeting. The slide dealing with the unfortunate increase read as follows:

1800 productive hours required for full bonus:

Productive Hours = Billable, Chargeable, and up to 100 hours of:

Thought Leadership
Knowledge Management
Business Development
Shadowing (1st – 3rd year associates)

For reference, a tipster informed us that Skadden associates already had up to 100 hours available for shadowing, as well as unlimited chargeable hours for pro bono work.

When compared to peer firms, an 1800-hour target isn’t that much, but considering the fact that Skadden already placated its senior associates with higher bonus amounts based on “distinction” last year in light of compensation complaints, raising the minimum threshold for bonus eligibility seems like a slap in the face. Now those senior associates will have to do even more work to earn their “extraordinary performance” bonuses.

Skadden partners, please take note: if your unhappy associates felt like they were being unfairly compensated under the 1600-hour bonus eligibility target, increasing that target to 1800 hours is just going to make them even more depressed. What were you thinking?

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Here’s hoping that Skadden Arps decided to institute this increased hours minimum in connection with a future base compensation raise, because if not, this is just cruel.

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