Biglaw, Bonuses, Money

Associate Bonus Watch: 'Very Disappointing,' Below-Market Bonuses

So how much below market are we talking about?

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bonus money low bonuses poor empty pockets sad upset lawyer businessmanOur most recent bonus stories have been generally negative — and maybe that’s not a surprise. Firms with happy news announce bonuses in December, often before the holidays, while firms with disappointing news wait until the new year to announce bonuses (and to pay them; firms that drag their feet on paying bonuses might be the subject of a future story).

The subject of today’s story, though, actually announced its bonuses earlier than usual, in late December. We’re a little late in covering them because we needed to gather more data before writing.

The firm in question is Baker Botts. Here’s what one source said (some details have been made more vague to protect anonymity):

BB is paying bonuses early this year. Just got my bonus memo. Very disappointed. I’m a senior associate with more than 2000 hours. I already get a below-market base salary due to our ‘levels’ system. With bonus, my total comp for the year is tens of thousands below market. Sucks.

Other associates I’ve talked to are similarly disappointed.

Based on the information we’ve gathered, here is our rough sense of Baker Botts bonuses at different hours levels (with Baker Botts base salaries and New York City market compensation — i.e., Simpson Thacher base salary plus 2015 Cravath bonuses — in brackets for comparison purposes):

1st year: [BB base: $160k; NYC base + bonus: $160k + $15k]
2000-2150: $15,000
2150-2300: $20,000

2nd year: [BB base: $180k; NYC base + bonus: $170k + $25k]
2000-2150: $15,000
2150-2300: $20,000

3rd year: [BB base: $180k; NYC base + bonus: $185k + $50k]
2000-2150: $40,000
2150-2300: $50,000

4th year: [BB base: $230k; NYC base + bonus: $210k + $65k]
2000-2150: ?
2150-2300: $40,000

5th year: [BB base: $230k; NYC base + bonus: $230k + $80k]
2000-2150: $60,000
2150-2300: $75,000

6th year: [BB base: $230k; NYC base + bonus: $250k + $90k]
2000-2150: $60,000
2150-2300: $75,000

So take, for example, a third-year associate (i.e., a class of 2012 associate). According to the NYC market scale, she should get $235,000 in total 2015 compensation ($185,000 base plus $50,000 bonus). At Baker Botts, she gets around $220,000 to $230,000 — around $5,000 to $15,000 below market.

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That might not seem like a big deal — especially if you work in Texas, which has a low cost of living and no state income tax. But it gets worse as you go up the seniority ladder. A sixth-year associate at a major New York firm got $340,000 in total 2015 comp ($250,000 plus $90,000 bonus). At Baker, she’ll wind up with $290,000 to $305,000 — somewhere between $35,000 and $50,000 below market.

In defense of Baker Botts, these aren’t crazily low bonuses. They’re probably on a par with this firm’s, with small variations based on seniority, and they’re definitely better than this firm’s — where you might work 3200 hours (!) for a below-market bonus.

And we bet that even more disappointing Biglaw bonus news remains in the pipeline as well. If we haven’t covered your firm’s bonus announcement yet, please share the news with us — the memo, some data points, your subjective opinions — by email or by text message (646-820-8477). Thanks.

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