Biglaw, Bonuses, Money

Associate Bonus Watch: Earth To Partners -- The Recession Is Over

Associates at this firm could deal with paltry bonuses during the recession, but now that the good times are back, they want partners to pay up.

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angry upset stressed out young woman female associate lawyerAs we recently noted on a different bonus story, “the economic recovery is several years old — so old that some fear we’re overdue for a fresh recession.” But for associates at some firms, it’s as if the recession never went away.

In 2013, the global law firm of Norton Rose and the international but U.S.-based law firm of Fulbright & Jaworski merged to form Norton Rose Fulbright. Things seem to have gone reasonably well since the merger. The firm posted solid revenue and profit increases in its most recent fiscal year, expanded into Latin America (with a new office in Rio de Janeiro), and enjoyed the biggest gain in the latest Vault 100 rankings (jumping 15 spots).

But does the firm’s associate compensation reflect a thriving firm? Not so much, as one source reports:

I’m writing so that others can know how terrible the bonus situation is at Norton Rose Fulbright (formerly Fulbright & Jaworski).

There are two primary types of bonuses at NRF: a productivity bonus and a discretionary bonus. Even combined, they come in laughably below market.

The productivity bonus is distributed individually, so I do not have insight into what everyone is eligible for. But universally, productivity bonuses do not kick in until associates hit 2100 hours. In some offices, associate salaries are brought up to market when they hit 2000 hours (which isn’t really a bonus). In other offices, where salaries are already market, there is no additional compensation for hitting 2000 (until you hit 2100). Moreover, there are only a few types of non-billable work that count toward bonuses, and those are riddled with qualifications.

In terms of amounts, I am a mid/senior-level associate in one of the Northeast offices, and if I had hit 2100 hours in 2015, my bonus would have been … wait for it … under $10,000. Then at 2200 hours, I would be eligible for an additional amount, also under $10,000. The firm gives this information as part of its annual compensation memo in January, so I already know that I am looking at the same (tiny) bonus structure for 2016. Thanks, but no thanks.

Under $20,000, for a midlevel to senior associate hitting 2200 hours? The 2015 Cravath bonus scale pays $25,000 to second-year associates, without regard to their hours.

What about those “discretionary” bonuses? Are they picking up some of the slack?

The discretionary bonus is even more of a black box. There are no metrics to get one, and there is no specific range for the bonus amounts (although I understand they are nothing to write home about). Supposedly, they are given to associates who do extraordinary things for the firm, like bringing in a substantial amount of new client work. I understand they are given to a very small minority of associates, though, so most people do not ever expect to get a discretionary bonus.

Productivity bonuses were given out in December (to associates who slogged through 2100 hours for a pittance) and discretionary bonuses came out on Friday, but there was no announcement about this to the associates (it was much more secretive), and I understand they were also a fraction of the bonuses at other firms.

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The Norton Rose Fulbright bonus scheme reminds me a bit of the Troutman Sanders set-up, which also has a “productivity” component and a “discretionary” component — and which some associates viewed as, well, an abuse of discretion.

Here are our tipster’s parting words:

Many associates at NRF were okay with these types of bonuses through the recession, but now people are getting increasingly pissed off. We are not even in the same ballpark as our peers, and it is really hurting morale.

In case you’re curious, the Great Recession technically ended in June 2009. But at some firms, based on their bonuses, the recession feels like yesterday — or even today.

Earlier: Law Firm Merger Mania: Fulbright & Jaworski Smells Sweet to Norton Rose
2016 Vault Law Firm Rankings: Self-Perpetuating Prestige
Fulbright’s New Timekeeping Policy May Screw Associates Out Of Bonuses

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