Firm Disappoints Associates With Bonus Announcement... Again

What's worse than having to wait months for your bonus announcement? Getting a lackluster bonus announcement after waiting months for your bonus announcement!

bonus money tug of war partner vs associateWhat’s worse than having to wait months for your bonus announcement? Getting a lackluster bonus announcement after waiting months for your bonus announcement!

Associates at Sheppard Mullin have sat on pins and needles waiting for bonus news since October because Sheppard employs the most nonsensical bonus calendar ever. As a refresher, Sheppard ends its year on September 30 and then generally pays its bonuses sometime in March of the next year, meaning associates sit around for five to six months before they get the bonuses they earned months before. The firm claims associates like the billable year ending early because it keeps them from feeling last-minute billable pressure around the holidays. And maybe they do… but they’re definitely not fans of this unorthodox calendar then being used to screw them on bonus distribution. You can either end the year early or pay bonuses late. Doing both is just jackassery.

Earlier this week, before the announcement, a tipster wrote:

I’m an associate at Sheppard Mullin, and was told at our “state of the firm” meeting in January that SMRH is waiting until various other CA-based firms announce bonuses. They assured us they aren’t waiting for an excuse to pay less, they just “don’t want to start a precedent of being market leaders, just market matchers.” Our billable year ended on September 30, so at this point we’re coming up on 4.5 months after our bonuses were “earned.” It’s really getting frustrating, especially because partners obviously got their year-end distribution on 12-31, and they paid staff “profit sharing bonuses” 2 weeks ago. And yet, on the associate bonus front, it’s been radio silence.

There’s the dishonesty in the system right there. Ending the calendar after September robs the firm of even the stock excuse “we have to wait for collections before we can assess bonuses,” and it’s proven when they close out FY2016 for all the partners before calendar 2016 ends. At that point there’s no way around this being a cynical ploy to take advantage of associates who can’t wait around half a year for a bonus.

Alas, no sooner did we hear a complaint over the tardy announcement than the firm put out its bonus memo and found another way to infuriate its associates. Because the firm may call itself a “market matcher,” but that title requires some intellectual gymnastics to justify. The firm matches the market… assuming you bill 2200 hours. One tipster refused to play that game:

Same below market nonsense as last year.

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Class 2200+
2015-16 $15,000
2014 $25,000
2013 $50,000
2012 $65,000
2011 $80,000
2010 $90,000
2009 $100,000

For those billing 1950-2099 hours, not an uncommon year in Biglaw terms, first-year bonuses start at a mere $9,000 and those billing 2100-2199 have their bonus scale start at $12,000. As another tipster put it:

Basically, you’ve got to hit 2200 to get a market bonus (i.e., work about a month more than associates at peer firms to get market – #lame).

The firm does offer the tantalizing prospect of a discretionary bonus for “exceptional contributions” — though it immediately walks this back by noting:

However, discretionary bonuses are a small component of total bonus compensation.

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Congratulations on your sort of bonuses, Sheppard associates. Hey, at least you’re on the Cravath salary scale. That counts for something.

UPDATE: As should be expected, there are associates with contrary views:

I am a bit annoyed by the griping about our bonuses. I think, by and large, associates are quite content with the bonus scale. For one, the firm offers unlimited pro bono hours credit (in addition to what is essentially a credit for 50 free hours that can satisfied with things like summer associate interview lunches), so really, there’s no excuse for anyone who cares that much about a market bonus. Additionally, anyone with any perception of where the firm sits in the market (and, quite frankly, the firm’s overall fiscal approach) should find the scale fair, particularly in light of the fact we pay market salaries (which, yes, you did mention). Also worth noting that billers above 2400 hours get above market bonuses, and this is before any discretionary component.


HeadshotJoe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.


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