Associate Salaries

Chapman and Cutler Brings Next Year’s Bonus News Today

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Chapman logo.jpgLate last week, Chicago based Chapman & Cutler released its 2009 bonus news. It’s not that impressive. But the firm also previewed what it will pay in bonuses for 2010. It’s … not that impressive. A tipster reports:

[T]his year the vast majority of associates did not receive any bonus whatsoever. So apples to apples, we fell way short of our competition (which management likes to tout as Mayer Brown but in reality is other second-tier Chicago firms). As an encore, they have already released next year’s bonus numbers and they’re still low for our peer group. They have the nerve to note they are meeting the 2008 bonuses like it’s a good thing, which is ridiculous as those bonuses too were low since they went out just after the economic crash. As upset as we are, I would be irate if I were a second year. Though it’s somewhat hidden in the memo, they have decided to completely eliminate all hours-based bonuses for second years.

Actually, screwing over second-years is not at all buried in the memo. Chapman makes it pretty clear….

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Katten Salary Follow-Up: Pay Raise If You Hit Hours, Salary Cut If You Did Not

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Katten logo.JPGLast week, we told you that Katten Muchin was delaying its decision on associate salaries. The firm finally got around to telling people how much they’re paid this week, and we can see why there was a long delay. See, when you try to do 1,001 different things all that same time, it gets pretty complicated.
All of the salary news was communicated via individualized firm memos, so a tipster explains the top line news: Katten is moving down to a $145K pay scale:

They went down to the 145K scale (145,000; 160,000; 170,000; 185,000; 210,000; 230,000; 250,000; 250,000; 250,000). And no, those last 3 numbers are not errors.

Well, for Katten associates that were frozen last year, the new scale still gives some of them a pay bump, if they moved up a class year.
But not every Katten associate will be moving up a class year …

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Sonnenschein’s New Compensation Potpourri Starts to Take Shape

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Sonnenschein logo.jpgBack in December, Sonnenschein announced the outlines of its new merit-based compensation structure. At the time, the firm promised its associates more details in March.
The firm is true to its word: we’re now in March, and we have more details. Above the Law talked with a spokesperson for Sonnenschein. Here’s the top line news:

  • First year compensation returns to $160,000 for first year associates.
  • 12% – 15% of that compensation will be paid out as a “base bonus” in 2011.
  • There are no hours or competency requirements to achieve the base bonus in 2011
  • 2010 raises for veteran associates will be in accordance with Sonnenschein’s merit based tier system

According to Sonnenschein, the decision to pay 12% – 15% of 2010 associate compensation as part of a 2011 bonus will help them transition to their new compensation model. The firm wants a greater percentage of total compensation to be paid out as merit-based, end-of-the-year bonus. That new system will be fully operational in 2011, so the firm is viewing 2010 as a transition year. Again, the firm emphasized to us that there would be no hours or merit requirements for associates to receive this 12% – 15% of 2010 money next year.
Sound good? Let’s see what the tipsters have to say.

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Katten: Why Can’t You Set 2010 Salaries Already?

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Katten logo.JPGIt’s March and Katten Muchin is coming into it like a very meek lamb. The firm froze salaries in 2009. So far in 2010, it has sent a series of memos trying to explain why it can’t get its act together. A tipster reports:

You may recall that most associates had their salaries frozen and then cut in 2009. We continue to receive frozen-then-cut salaries at this time, although the memos state that we will get retroactive payments back to January 1 on “any increase” that occurs. All the other Chicago firms have spoken (with double bumps), but Katten is waiting on something…we guess. At this point we’re wondering whether we’ll know our 2010 salaries in 2010!

Check out the memos. They’re a case study in “we’re waiting for others to tell us how to run our business.”

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Winston & Strawn Kills Lockstep and Adopts a ‘Black Box’ Compensation System

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Winston Strawn LLP logo Above the Law blog.jpgFriday brought good news and bad news for Winston & Strawn associates.

The good news is that the double salary freeze, which has apparently resulted in first- through third-year associates at Winston all earning $160,000, may be thawing. Managing partner Thomas Fitzgerald sent a memo — this time to its intended recipients — indicating that raises are on the way.

The bad news is that Winston associates don’t know how much of a raise they’ll be getting — and the most they can hope for is a salary that matches the market. The memorandum contains the standard $160K salary scale — 160-170-185-210-230-250-265-280 — but states that “[s]alary levels in each associate class will range up to the maximum base compensation levels set forth” in the memo (emphases added).

The Winston associates we’ve heard from are upset. They’re unhappy not just about the move away from lockstep, but over the firm’s failure to set forth in detail how salaries will be determined. Most of the other firms that have abandoned lockstep have set forth elaborate systems for evaluating associates to determine their compensation and advancement. The Winston memo simply states: “Individual associate salaries will be determined on a case by case basis based on seniority, performance and productivity factors and will be communicated separately to each associate.”

This is a “black box” approach to compensation. It’s used by other big firms — e.g., Jones Day — but it’s a significant departure from Winston’s historical practice. It’s not what Winston associates signed up for when they joined the firm.

But then again, thanks to the Great Recession, lots of Biglaw associates aren’t getting what they expected when they joined their firms. And if associates aren’t happy, with compensation or any other aspect of their employment, their firms will tell them: you’re free to leave. In the words of an unemployed woman quoted in this weekend’s New York Times, “There are no bad jobs now. Any job is a good job.”

There’s a little more bad news about Winston associate salaries. Find out what it is, and read the full Winston & Strawn memo, after the jump.

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MoFo Back to 160k! And Good Bonus News.

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American Apparel MoFo.jpgIs Biglaw getting over the gloom of the recession? Back in October, Morrison & Foerster was feeling pessimistic about attorney salaries. It decided to cut salaries for first-year associates from $160,000 to $145,000. Only associates in pricey New York and Asia — MoFo has offices in Beijing, Hong Kong, Shanghai and Tokyo, all expensive cities — were spared the cut.

The firm said at the time:

Note, however, that the market for first year salaries among national firms is undetermined at this time. Given that, we will continue to assess starting salaries, in light of market trends, and may elect to adjust as required based on larger market developments.

Well, MoFo has assessed, and MoFo has decided to beef up its salaries. Associates got news this week that first year salaries are back up to $160k. And the raise is retroactive to January 1st. From the firm email that went out on Tuesday, available in full after the jump:

Although a great deal of uncertainty continues regarding how the economy will perform in 2010, we, like our most successful competitors, remain in demand. We are planning conservatively for 2010. However, if 2009 is a predictor, 2010 will provide opportunity despite its challenges.

MoFo is known for being a little quirky. In keeping with its individualistic streak, it’s decided to buck the Cravath scale for its 2009 bonuses. Bonuses range as high as $65,000, but only if you clocked the requisite number of hours.

Additional good news: Pro bono hours count…

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Update: Sidley Austin (Finally) Announces Salaries

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Sidley Austin new logo Sidley Austin Brown Wood ATL Above the Law blog.jpgSidley Austin associates, never underestimate the power of flipping out. Earlier today, we reported that Sidley Austin associates hit the proverbial roof (“proverbial roof” = hit send button on emails to Above the Law) when Winston & Strawn announced its salary structure (which we reported even earlier today). The Winston announcement, coupled with the fact that Sidley associates received another frozen paycheck last night/this morning, made associates at the firm very angry with Sidley’s reluctance to communicate the 2010 salary scale.
Well, Sidley associates, your complaints have been answered. Sidley just announced its 2010 salary scale, and the firm will be making a true-up raise. The raises will be retroactive to January 1, 2010.
Yay? Not quite. Some Sidley Austin people are still annoyed that the firm will evidently not be giving out a make-whole bonus, as other firms have done.
Details and the memo after the jump.

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Another Frozen Pay Check from Sidley

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Sidley Austin new logo Sidley Austin Brown Wood ATL Above the Law blog.jpgAfter we published news of Winston & Strawn’s salary freeze, our Sidley Austin tipsters went apoplectic. A Facebook message I received moments after publishing the Winston news seems to sum up the mood of Sidley associates:

My firm [Sidley] is more like Winston than it is like a good firm. I should have gone to Kirkland.

Ouch. Why the sadness? Well, today is payday, and Sidley people have just learned that, as of now, their salaries are still frozen in place.
Details after the jump.
UPDATE: After this post went up, Sidley decided to announce its 2010 salary structure. Click here for our updated coverage.

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At Winston: Double Salary Freeze is On, But Rates Set to Rise

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winston strawn.gifAnother salary shoe has fallen in Chicago. Winston & Strawn froze salaries last year, and they are doing it again this year. A tipster reports:

Chicago received salary memos yesterday; DC just received salary memos today – All are individualized with no general pay scale included – just the recipient’s salary information.
Based on conversations with numerous associates in both offices – those who did not make hours (1950), those who did, and those who exceeded, all salaries remained the same (frozen at 2008 rates).

Well, at least that’s consistent.
A few details from the memos after the jump.

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Morgan Lewis: Not Enough Pie for Everybody

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Morgan Lewis.JPGThe profit gods did not smile upon Morgan Lewis & Bockius in 2009. Not on the partnership, not on the associates. We’ve already reported on MLB’s various attempts to change its associate pay scale. But making employee costs “merit-based” wasn’t enough to keep Morgan Lewis profits growing. Am Law Daily reports:

Morgan, Lewis & Bockius saw declines in revenue and profits in 2009 as a general economic slowdown and a hiring spree impacted the firm’s bottom line.
As of September 30, the end of Morgan Lewis’s fiscal year, 2009 revenue declined by nearly 5 percent to $1.07 billion from $1.12 billion in 2008. Profits per equity partner (PPP) dropped 15 percent to 2006 levels. The firm’s 2009 financials contrast sharply from 2008–that year, Morgan Lewis saw an 8 percent boost in PPP.
“We knew we dodged the bullet [in 2008], but we knew the hit was coming later,” says managing partner Thomas Sharbaugh.

Hiring spree? Morgan Lewis has deferred associates, laid off associates, and canceled its summer program. I think MLB has been on a different kind of “spree” — the kind that racks up a body count.

The firm’s cost cutting measures were more than counterbalanced by significant new investments in lateral hires, says Sharbaugh. Morgan Lewis hired 55 new lawyers in the last fiscal year, nearly double the number of lateral hires made in 2008.

Oh, I see. Morgan Lewis is using laterals to replace people that they’ve laid off or deferred. Well, that’s a plan, I guess.
But for that plan to work, laterals have to want to come to the firm. Usually attracting laterals involves paying them competitively. Is MLB doing that?

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Bingham McCutchen: Lockstep Base Pay, Merit Bonuses — It’s a Hybrid Plan That Seems to be Working

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Bingham McCutchen new logo Abovethelaw Above the Law blog.jpgMaybe Toyota should take a lesson from Bingham McCutchen: don’t try to cut corners when producing a hybrid.

Back in October, Bingham announced that it would be adopting a new “merit-lockstep” hybrid approach to associate compensation. The plan came with the stamp of approval from Bingham partners and associates. And a majority of Above the Law readers also approved of Bingham’s hybrid approach.

Today, Bingham rolled out its hybrid system. The firm is providing true-up, lockstep raises for people who hit 1900 hours. The double bump extends nationally, across all of Bingham’s offices. People who hit 1500 hours will only be getting a single class bump in salary. We understand that only a small percentage of Bingham associates were low enough on hours to be affected by this stratification.

At the low end, people who billed fewer than 1500 hours will have their salaries frozen again.

On the bright side, all of the people who are frozen will have their hours reevaluated in June. If they’re on pace, they’ll get their money.

The Bingham McCutchen lockstep base pay structure is clear and straightforward (see chart after the jump). For bonuses, welcome to the black box that is merit-based compensation.

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Jenner & Block: Salaries and Bonuses Come in Low

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Jenner Block logo.JPGWe’ve been having some fun documenting the curious game of chicken happening in Chicago. The top firms in the city seem to be waiting for each other to set the associate salary market — even though that market has already been set.

Kirkland set the market by never freezing associate salaries in the first place. Mayer Brown finally blinked and raised salaries. Sidley is still waiting — we’re not sure why, but they are waiting.

At Jenner & Block, “merit-based” salary increases are in effect. But the raise — at least for some people — is nowhere near market salary. One tipster reports:

The situation is bad at Jenner Block. You should write about how cheap the firm is. A title should be something like: “PPP up 33%, Associate Bonuses 33% of Last Years.” Well that is the truth. For the past two years associates who made hours have gotten 5k raises and all others have gotten zero. So, the salary scale, for those that have consistently made hours (worse if you slip a year or have a slow department), is effectively: 160k, 165k, 170k, 180k…. the more senior you get the more the gap between Jenner and the market.

And for bonuses, this year they start at 2k, even for 3rd years.

Well, $5,000 here, $5,000 there, pretty soon you’re talking about real money. I’m sure if our Jenner friends just hang in there for another decade, they will be very happy with their compensation.

According to spokespersons for Jenner & Block, our tipsters are incorrectly reporting their salaries. But the firm isn’t very clear on what salaries Jenner folks are actually receiving.

Details and a statement from the firm, after the jump.

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