It’s hard to understand why some firms choose secrecy over transparency when it comes to associate bonuses. I understand not wanting to tell Above the Law about them. We often find out eventually, but if you want to make us jump through a couple of extra hoops, that’s fine. (To help us jump through the hoops, please email us about your firm’s news.)
But even if you don’t want ATL to know about your firm’s bonuses, I don’t see how fear of a blog is justification for keeping information from your own people about how they are compensated. If you are transparent about how bonuses are calculated and awarded, most of the people will accept that they knew what was expected of them and either met those expectations or fell short. Sure, there will be some disgruntled people, but at least everybody gets to know why they are being paid what they are being paid.
But if you roll out there with secret formulas and unspecified hours requirements, nearly everybody feels disgruntled because they have no idea why they received (or didn’t receive) whatever they got. It’s like, if a girl tells you she won’t put out until after at least four dates, you know what you’re up against. But if she says nothing and you find yourself standing outside her apartment after a successful third date and she’s not inviting you up for “coffee,” you’re super-pissed (and hoping that the slutty chick who was checking you out earlier is still at the bar and relatively disease-free).
And that’s where Arnold & Porter associates find themselves when it comes to their bonuses. Standing outside of some chick’s apartment, wondering what the hell just happened.
Oh A&P announced its bonuses. But the eligibility for these bonuses is really anyone’s guess…
If you hate your job, then no one can pay you enough to make going to work every day worthwhile. And if you love your job, you won’t be sitting around fretting about your pay. I understand that this is America and all that, but within very broad limits, you’re nuts to accept one job over another because of a small difference in compensation.
(I understand that you may be trapped in a job, because of student loans, or kids in college, or the like. I understand; trapped is trapped. And I understand that I personally have been awfully lucky, because I’ve never had to worry about finding money to pay next month’s rent, so I speak from a particular point of view. Despite all that, I stand by what I said — if job A and job B are meaningfully different from each other in ways that matter to you, and you’re not trapped, you’re nuts to take one job over the other just to earn a few extra grand each year. Period.)
Naturally, since I’m not interested in the subject, you can guess the question I’ve been asked most often since Above the Law anointed me an in-house counsel guru:
How does in-house compensation work, and what questions should I ask about compensation if I’m interviewing for an in-house job?
Last week, Hogan Lovells announced its associate bonuses. It’s the first bonus season for the firm since the merger of Hogan & Hartson and Lovells. Unfortunately for some associates, the transatlantic deal apparently did not pay off for them at bonus time.
The memos are individualized, but the associates who have reached out to Above the Law are not happy. Here’s one tipster’s report:
Most people with whom I’ve spoken received $2500-$5000 less than the Cravath-model for billing around 2150 (our hours requirement is 1950). This is true no matter the class year.
A number of associates left the office as soon as the memos came out because they were so disgusted. I predict a mass exodus of associates leaving HoLove this coming year, because a lot of people have been pissed about the hours anyway and these bonuses are just insulting.
But according to a Hogan Lovells spokesperson, the HoLove bonuses matched the market. So why are associates upset?
(Please note that we’ve added some UPDATES after the jump.)
* Still pissed about your bonus? Don’t blame partners. Sure they’re making more money this year while forcing you to work harder for the same pay, but… umm… look, just don’t blame them for anything, ever. [WSJ Law Blog]
* If you commuted into work today, you don’t know how to accept a gift. [Village Voice]
* Reading your wife’s email is a crime now? Fine, so long as it is now also a crime for your wife to rifle through your pockets or even look at your BlackBerry. [Fox]
Correction: The preceding sentence is not just false, but unintelligible.
Several folks have told me that a good way to juice readership of this column would be to publish a salacious post about bonuses paid to in-house corporate counsel, so readers could complain about how one corporation is stingy and another generous, or how corporations pay bigger or smaller bonuses than law firms. But I can’t write that post.
While some firms ran away from their merit-based compensation plans almost as soon as the economy began to turn around, Orrick, Herrington & Sutcliffe stuck with it. Depending on your performance reviews, you might make less at Orrick than your peers at competitive firms, but you also might make a whole lot more. Click here for our prior coverage of Orrick’s compensation system.
Merit-based compensation makes bonus time particularly complicated. The firm uses the bonus to cover up any gaps between your base salary under its multi-tiered associate structure versus base salary at lockstep firms, and it uses its bonuses to pay out, well, associate bonuses. AND it uses the bonuses to pay out that “extra” compensation top performers at the firm deserve.
If Orrick had a culture of secrecy like some of the Biglaw firms we cover (ahem, Jones Day, ahem), then all that would happen would be a general feeling among every associate that somehow they were getting screwed. But Orrick has fought against distrust and misinformation by being amazingly transparent when it comes to its bonus structure. Last February, Orrick put together a wonderful chart that fully explained to its own associates (and potential new recruits and lateral hires) how the firm determined its 2009 bonus structure. We’ve been told that the firm will put one together again for the 2010 bonus cycle. (In February. Which is unfortunately months away.)
So while we wait for the full story, right now we only know what the Orrick associates know. And that is that their bonus will be using the Cravath scale as a benchmark in its calculation of market compensation…
Bonus news is out at Curtis, Mallet-Prevost, Colt & Mosle. Basically the firm matched the Cravath scale. “Totally expected and acceptable,” said a contented Curtis associate, “since hours aren’t terrible and people (generally) don’t hate their lives.”
It was “basically” a Cravath match, because even Curtis — which only has around 200 lawyers, and which “tends to round out the bottom of the Am Law 200,” in the words of a Curtis source — was slightly more generous than Cravath and all the CSM followers, at least to certain top performers….
Interesting. Leading litigation firm Paul Weiss just announced its associate bonuses, and it’s using the scale of Sullivan & Cromwell — not the substantially similar but slightly cheaper scale of Cravath.
Some Paul Weiss sources had hoped for better, noting that the firm scored a huge contingency fee in 2010. Last week, one of them wrote to us (before all the other shoes dropped): “I know S&C and STB are the best hopes, but do you really not want to mention PW, litigation powerhouse with $91 MM contingency fee this year? PW has been quiet, while lit-heavy K&E, QE, Cahill, and Sidley have topped market.”
(Oh, and add lit-heavy Boies Schiller to that, as we reported earlier this morning.)
Alas, it was not to be. Paul Weiss has fallen in line behind Sullivan & Cromwell, which (more or less) fell in line behind Cravath.
But let’s look on the bright side. The S&C scale offers slightly better payouts to the most senior classes of associates. Will any of the lockstep New York firms that originally followed Cravath go back and give their most senior people S&C bonuses?
Or is it not worth the hassle? The Sullivan & Cromwell scale is very close to the Cravath scale. Let’s put them side by side — and learn about a SPECIAL GIFT that Paul Weiss gave to its associates, to take the sting off the bonus news….
The Boies bonuses make our use of this photo appropriate.
Earlier this month, we heard that Boies, Schiller & Flexner, the legendary litigation firm founded by the celebrated David Boies, wasn’t holding its lavish annual firm retreat in Jamaica (to which spouses and families have been invited in the past, all on the firm’s dime). This made us wonder: Despite its extensive involvement in headline-making cases throughout 2010, did BSF somehow not have a good year? [FN1]
Umm, no — at least not based on the Boies bonuses. Boies Schiller announced its associate bonuses on Tuesday, and they were “generous as usual,” according to one source.
Actually, that’s an understatement — a huge one. Almost as huge as the Boies Schiller bonuses. We believe them to be the biggest and best of the bonus season so far.
We reached out to the firm, which provided us with some hard numbers about its eye-popping bonuses….
Here’s some very belated bonus news. Earlier this month, the New York office of Linklaters announced bonuses that matched the Cravath scale.
As usual at Linklaters, there was no hours requirement. The news was communicated via individual memo.
A Cravath match, especially in a bonus season when some firms are paying significantly more, kinda sucks isn’t that exciting. A Cravath bonus won’t get a Linklaters associate a pad as palatial as that of Linklaters partner Michael Bassett. Heck, $35K — the top of the Cravath scale — probably won’t even cover the cost of Bassett’s wallpaper.
But we’ll point out two nice things about Linklaters, both relating to tax issues….
As part of a nationwide tour, Above the Law is coming to the great city of Chicago.
Join preeminent law firm management consultant Bruce MacEwen, Katten Muchin Chicago managing partner Gil Sofer, and JPMorgan Chase & Co. assistant general counsel Jason Shaffer for a panel discussion (sponsored by Pangea3) on the evolutionary and market forces bearing down on the law firm business model. Come on by Thursday, November 20, at 6 p.m., for thought-provoking discussion, food, drink, and networking.
Space is limited and there will be no on-site registration, so please RSVP
Average law school debt for graduates of private universities hovered around $122,000 last year. With only 57% of new attorneys actually obtaining real lawyer jobs, recent graduates have a lot to consider when it comes to managing their student loan payments. Thanks to our friends at SoFi, today’s infographic takes a look at student loan debt, including the possible benefits of refinancing for JDs…
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.