We reported yesterday that Paul Hastings laid off a bunch of associates. In that report, we mentioned that a firm wide meeting was scheduled for 11:00 a.m. today. We’re getting the first reports from that meeting, and not surprisingly, associates received more information about the layoffs.
A tipster reports that Paul Hastings management emphasized that yesterday’s layoffs were the first round of “economic” layoffs. Apparently, all of the other PH layoffs that we’ve reported were performance based:
Previous terminations were performance based. But for world-wide economic downturn, the associates let go at this time would still be with the firm. Firm looked at past three months of performance and projected hours for 2009 and adjusted headcount to meet those expected hours. The decision was made on a department and office basis. It was not a flat 5% reduction. Some groups had no attorney or staff reductions and some offices had only very small reductions.
But there is also some good news for the remaining Paul Hastings employees.
Let’s pretend for a moment that yesterday didn’t happen and associates were A) employed, and B) expected to be compensated.
Everybody with me? Okay.
You might remember that Orrick, Herrington & Sutcliffe announced its 2008 bonus structure way back in March of 2008. Once the market collapsed, people started wondering if Orrick would keep its word. But at the end of October, Orrick stated that they would keep bonuses at Skadden levels:
Today, Orrick assured us that the firm would not look to change their bonus plan. A firm spokesperson put the issue succinctly:
“We are committed to using the previously announced bonus schedule.”
But something happened on the way to actually making good on that promise. Details after the jump — and an update from the firm.
We have been waiting a long time to get a look at the Morgan Lewis & Bockius bonus structure. The firm announced way back on October 30th that it would be delaying their bonus decision until the market settles.
Now that the bonus information is finally in, the results are somewhat anticlimactic. Individual memos are out at Half-Skadden levels.
But the real news from MLB is contained in this little memo that went out on Friday night:
Most of counsel and associates have had discussions by now with respect to annual evaluations, so this is a good time to remind lawyers of our policy with respect to taking late time-recording into account when we determine bonus amounts. For the year just ended, there were 55 lawyers whose bonuses were affected by their unexcused late time entries. The impact was larger for repeat offenders.
Ouch. I supposed this is a “good time” to remind lawyers about how late time keeping can affect the year end bonus. Let’s hope that Morgan Lewis also reminded people at the much, much better time — which would have been before people lost money for being tardy with accounting.
Tipsters weigh in and the full Morgan Lewis email after the jump.
I am pleased to announce on behalf of the Firm the amounts of year-end bonuses for eligible New York associates for fiscal 2009, as follows:
Class of 2008 (1st Year) $17,500 (pro-rated) Class of 2007 (2nd Year) $17,500 Class of 2006 (3rd Year) $20,000 Class of 2005 (4th Year) $22,500 Class of 2004 (5th Year) $25,000 Class of 2003 (6th Year) $27,500 Class of 2002 (7th Year) $30,000 Class of 2001 (8th Year) $32,500
There’s a 1900 hour billiable requirement.
Wonder if Obama will get pissed about that? Congratulations to Winston associates on your belated windfall.
Mayer Brown already announced that New York bonuses would match the New York market. Last night, the firm announced its bonus structure for offices in Chicago, Palo Alto and Washington, D.C.
We are pleased to announce that the Firm’s bonus structure for work done in 2008 will be the same as it was for work done in 2007.
We couldn’t find last year’s Mayer Brown bonus memos for offices outside of New York. But based on what peer firms paid out last year, it certainly doesn’t look like associates will be getting more than their counterparts in New York.
Still, given that we are living in a time of salary freezes and layoffs, anything that resembles 2007 is probably a good thing.
[I]t is with regret that we announce that the firm will be downsizing our associate, legal support, and administrative ranks, with 45 attorneys and 68 staff directly affected. Members and staff managers will meet with their teams today and tomorrow to inform them of the details of this decision. Please know that the firm is extremely grateful to all of the affected employees for their contributions, and we will work with them and provide resources to ease their transitions.
In light of that news, the salary freeze and bonus news for those who are left doesn’t really sting that much:
[W]e will not be making associate step salary increases this year, but we will be paying out bonuses based on the criteria and structure developed by the Associate Bonus Program Steering Committee and announced last fall (additional details to follow shortly). Legal support and administrative staff will not receive merit bonuses in January, but the firm will be making profit-sharing contributions in the spring to all eligible plan participants equal to 9.5 percent of their eligible compensation, as we have in previous years.
Best of luck to the 113 people suddenly out of work. Keep your heads up.
Check out the full firm statement, after the jump.
We haven’t yet gotten our hands on the Chadbourne & Parke bonus memo, but a firm spokesperson confirmed what the general numbers look like. According to the spokesperson:
“Our bonuses are on Cravath, Half-Skadden, scale. Individual bonus determinations are based upon individual performance and pro rated for part time attorneys and attorneys who have been with the firm for less than the full year.”
I wonder if somewhere, Cravath’s Evan Chesler is thinking about ways to kill me?
Meanwhile, Chadbourne also announced a salary freeze:
As you know, the world economic outlook for 2009 is uncertain. Accordingly, as a matter of prudence, the Firm is reserving decision on associate salary levels for 2009. We will make a decision on this matter within the next several months as the global economic picture becomes clearer.
Half-Skadden bonus, Latham salary — but no layoffs, so there’s that to be happy about.
Latham & Watkins might be leading the charge for salary freezes, but that’s not going to stop the firm from paying out associate bonuses. Right?
Latham is not a lockstep bonus firm. As a tipster explains it:
Our bonuses are not lock-step- so those people working their tails off usually do end up doing better than market … It’s usually those who are at the threshold (1900 hours) who do worse than market or get no bonus at all.
Well bonus information just went out and it looks like those hours thresholds have shifted. Latham goes through great (and ultimately futile) lengths to make sure that the firm’s bonus information doesn’t appear in the press. A tipster explains:
The way they announced them was via an email with a link in it that took you to a page that listed both your specific bonus, as well as an “un-cut-and-pasteable” bonus memo.
After the jump, we post the first screenshot of the Latham bonus structure.
Of course, that was before the great 2008 whatever the hell we’re living through. Few expected HHR to keep their bonus promise. But the structure that HHR released Sunday seems very generous and fair in light of market conditions:
Class of 2001 and above:
Tier 1: $32,500
Tier 2: $65,000
Tier 3: $85,000
Tier 4: $105,000
Class of 2002:
Tier 1: $30,000
Tier 2: $60,000
Tier 3: $80,000
Tier 4: $100,000
Class of 2003:
Tier 1: $27,500
Tier 2: $55,000
Tier 3: $75,000
Tier 4: $95,000
Class of 2004
Tier 1: $25,000
Tier 2: $50,000
Tier 3: $70,000
Tier 4: $90,000
Class of 2005:
Tier 2: $45,000
Tier 3: $ $60,000
Tier 4: $75,000
Class of 2006:
Tier 1: $20,000
Tier 2: $40,000
Tier 3: $55,000
Tier 4: $ 70,000
Class of 2007:
Tier 1: $17,500
Tier 2: $35,000
Tier 3: $50,000
Tier 4: $65,000
Tipsters are happy:
That’s pretty sweet – everyone’s pretty happy for now (although 2009 bonuses and salaries are still “under consideration”). Tier 1 is 1950 hours, tier 2 is 2100, … tier 3 is 2300 and tier 4 is 2500. … Since HHR counts pro bono hours 1 for 1 as billable, and a number of associates have TONS of pro bono it’s not quite as hard to meet the “tiers” and rake in a pretty sweet bonus.
Good news for Hughes Hubbard people. Congratulations.
As a result of this comprehensive review, the Executive Committee (the “EC”) decided that based on global economic conditions, the Firm will freeze associate base compensation at the current 2008 rates for 2009.
But that’s not all:
Additional adjustments to the associate compensation system, also discussed below, include a somewhat more stringent 150-hour cap on non-billable creditable hours that can be increased only in limited circumstances, the reintroduction of a limited deferred compensation (“hold-back”) system, and modifications in the manner that hours are calculated for the purposes of qualification for productivity bonuses.
And if you’re concerned about bonuses:
The Firm will continue to make lump-sum bonus payments for above standard hours. Eligible associates who, during the evaluation year (or such later 12-month period as may be selected by the Firm), record more than 2050 billable hours, 2150 billable hours, 2250 billable hours, or more than 2350 billable hours will be eligible to receive productivity bonuses as follows.
So if you do bill 1950, you’re not getting any bonus at all. In fact at 2050 juniors are only getting $5K (considerably less than what juniors are getting at Cravath). Even 2250 hours doesn’t guarantee you a full Half-Skadden bonus.
No matter how annoyed you are at your firm’s pay structure, there always seems to be at least one other firm willing to pay a little bit less.
And that’s not even the interesting part. More on that after the jump.
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past seven years. You can reach them by email: firstname.lastname@example.org.
Things have changed recently in Korea – a few of our US and UK client firms are looking, very selectively, for a lateral US associate hire. Until just recently, there was not much hiring like this going on in Korea, since US and UK firms started opening offices there. We have already placed two US associates in Korea in the past month at top firms. Most of the hiring partners we work with in Korea do not actively work with other recruiters.
If you are a Korean fluent US associate in London, New York or another major US market, 2nd to 6th year, at a top 20 firm, with cap markets or M&A focus (or mix), or project finance background, and you are interested in lateraling to Korea to a top US or UK firm, please feel free to reach out to us at email@example.com or firstname.lastname@example.org. Our head of Asia, Evan Jowers, was just in Korea recently, and Evan and Robert Kinney will be in Korea in a few weeks. We are in the process of helping several firms open new offices in Korea (a number of which are interviewing our partner level candidates) and also helping existing offices there fill openings.
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