Associate Bonus Watch: A Not-So-Happy New Year?

This firm announced bonuses on December 31 -- which was probably a smart move.

Consequences of crisisAbout a year ago, Arnold & Porter announced bonuses that did not go over well outside New York. The firm paid NYC market bonuses in New York, but outside of Gotham it paid lower bonuses — and it announced everything in an omnibus memo that showed the non-New Yorkers just how much less they were getting (unless they hit 2200 hours).

This year, the firm’s communication skills reflect improvement. First, the memo is more vague, and therefore more sensitive. As one tipster told us:

Arnold and Porter announced their bonuses in a general firmwide email that simply said bonuses ranged from $12.5K to $120K, they then privately emailed everyone with their individual bonus amounts. It is unclear what the actual scale was.

Second, the firm announced bonuses on Thursday, December 31 — the day of New Year’s Eve, and a time when many lawyers were pretty checked-out. So if the firm wanted to reduce the incidence of irate associates walking into each other’s offices, comparing notes, and complaining, this was well played.

But it didn’t preclude all complaining, at least not to us. From a second source:

I’m a junior associate and received substantially below market despite billing more than 2000 hours this year. I know of first-year associates who received slightly below market for billing similar hours.

Last year the firm paid terrible bonuses and received a lot of blowback. Associate morale was low all year and recruiting was very difficult, at least in my office. I guess the partners are willing to weather that storm again this year. It’s interesting that they announce bonuses today, on New Year’s Eve. I suppose they wanted to keep bad press to a minimum.

The strategy might have worked, at least in part. We haven’t heard from as many upset A&P associates as we did last year, and the ones we have heard from, while disappointed, don’t seem quite as mad.

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And we leave open the possibility, as is always the case with a system of individualized bonuses, that the sources we’ve heard from are not representative of the larger group; perhaps some A&P associates are happy with their bonuses. The memo notes that bonus amounts increase at the 2200-, 2400-, and 2600-hour marks; satisfaction with one’s bonus might vary with one’s hours.

If we receive more reactions to Arnold & Porter associates about their bonuses, we’ll update this story.

UPDATE (1:27 p.m.): Here’s more, from a senior associate:

I billed over 2000 hours in 2015 — A&P’s minimum — and received a substantially under-market bonus…. My sense is they paid market to people who billed over 2200 hours. I’m unhappy because of the substantial difference between 2000- and 2200-hour bonuses.

Another interesting note: only a little over half of A&P associates received a bonus this year.

Yikes. Even though the memo states that “[a]pproximately the same percentage of associates will receive bonuses this year as last year,” it’s still scary to think of roughly half of the associate population getting zilch.

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(You can flip to the next page for the complete memo, sent on December 31 and signed by co-managing partner Michael Daneker on behalf of himself and co-managing partner Anne P. Davis.)


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