Biglaw, Bonuses, Money

Associate Bonus Watch: What About Super-Senior Associates And Counsel?

What approach does your firm take to bonuses for its most-senior associates and counsel?

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For better or worse, Biglaw isn’t as “up or out” as it used to be. As making partner (especially equity partner) gets harder and harder, firms are employing an increasing number of very senior associates, plus counsel.

If you look at the Cravath bonus scale, it ends with eighth-year associates. But many firms have ninth-, tenth-, or nth-year associates, as well as “counsel” of various stripes. What types of bonuses do these lawyers receive?

We’ve talked before about how small differences in wording can, in a very lawyerly way, make a big difference come bonus time. The treatment of senior associates and counsel provides another example. As one tipster told us:

Note that some of the bonus memos you’ve posted give the highest bonus to the class of 2007 “and senior,” and others to just the class of 2007. This is a very important distinction.

It’s fair to assume that at least some of the firms that match through the class of 2007 (but leave out the “and senior”) will stiff the senior-most associates on the basis that “there’s no market” for their bonuses. It’s well-known at my firm that an associate who is one year off the “scale” and otherwise in good standing will receive the same bonus as a fourth-year (roughly).

So the firms that say “2007 and senior” should be praised for being fair to associates that are beyond the scale (whose billing rates are in line with their seniority, no doubt).

This source proceeded to provide examples:

[T]his language from the Simpson Thacher memo is the killer: “Bonuses for counsel and other attorneys will be determined on an individual basis and communicated separately.” They say “other attorneys” but they mean — at least in part — “associates not in the above-listed classes.”

Note that the Cleary memo does not have this kind of language. I think a 2006 associate at Cleary can reasonably expect $100K. Simpson — not so much.

Cravath seems to take the Simpson approach. It does not have “and senior” after “Class of 2007” in its bonus memo, which goes on to explicitly note that “[b]onuses for senior attorneys, specialist attorneys, discovery specialist attorneys and foreign associate attorneys will be determined on an individual basis.”

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Davis Polk appears to follow Cleary. In its bonus memo, it lists a $100,000 bonus for lawyers from the “Class of 2008 and earlier” (emphasis added).

The argument in favor of giving generous bonuses to super-senior associates and counsel is stated by our source. These lawyers are smart and experienced, and they are surely being billed out to clients at super-high rates, so they deserve top-of-the-line bonuses.

The argument against giving them big bonuses: “You’re lucky we’re keeping you on the payroll, instead of sending you packing in the traditional ‘up or out’ way.”

Personally I don’t find this argument very persuasive. As noted, the “up or out” model has eroded greatly in recent years, as partnership has become harder and harder to attain. If seasoned but non-partner lawyers are doing work that’s strong enough to keep them at the firm, then they should be compensated in a manner commensurate with their experience, with bonuses at the top — or even over the top — of the standard scale.

(This assumes that they’re working the standard Biglaw hours, of course; some senior associates or counsel reach agreement with their firms on part-time or flexible schedules, and so they might deserve lower bonuses. This also assumes that their worth isn’t completely reflected in their base salary; some off-track lawyers might accept a lower or even no bonus if their base salary is correspondingly raised.)

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What does your firm do when it comes to bonuses for super-senior associates or counsel? Does it pay them generously, or does it nickel and dime them? Feel free to discuss in the comments or share information with us by email (subject line: “Senior Associate or Counsel Bonuses”). Depending on reader interest, we might return to this topic and perhaps even conduct a reader survey.

Thanks, and have a good weekend. We’ll see you again on Monday for more Biglaw bonus news.

Earlier: Revamping The ‘Counsel’ Role
Associate Bonus Watch: Cravath Announces Its 2015 Associate Bonuses!
Associate Bonus Watch: Simpson And Cleary
Associate Bonus Watch: Davis Polk Announces!!!

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