Compensation

Career Center Survey Results: Comparing Compensation Systems

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Back in 2009, when killing lockstep was all the rage, a number of large law firms announced that they would be moving to some form of a merit-based compensation system. Now that we’re a few years into those systems, how many firms have stuck with the plan? And which systems do associates prefer?

Of the 86 distinct Biglaw firms at which survey respondents work, 63% of the firms pay base salaries on a lockstep system, and the remaining 37% of firms use a merit-based system or hybrid-lockstep system for paying base salaries. The vast majority of respondents, 70%, say they prefer the lockstep model for base salaries because of its transparency and predictability.

For year-end bonuses, 70% of the firms utilize a merit-based or hybrid-lockstep system, while 30% have a lockstep system based either on class year or billable hours. According to 62% of respondents, the most preferred type of year-end bonus allocation system is a merit-based or hybrid-lockstep system.

After the jump, find out how various combinations of compensation systems measure up against market.

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Quote of the Day: Wall of Shame, or Wall of Virtuous Restraint?

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This is what you see in the law firm world. Law firms try to keep up with Cravath, but it might not be financially prudent. You try to keep up with Cravath, and then two or three years later you go bankrupt.

– Dean Frank H. Wu of UC Hastings Law, discussing the legal profession’s (perhaps unhealthy) status obsession, in an interesting panel about diversity and federal clerkships at the annual education conference of the Association for Legal Career Professionals (aka NALP).

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Career Center Survey: Comparing Compensation Systems

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In the throes of the recession, many Biglaw firms jumped on the bandwagon to kill lockstep compensation in favor of a more merit-based system (though some have already fallen off the bandwagon). With a variety of compensation models currently in use among firms today, we want to hear from you about how you get compensated at your firm — and how you prefer to get compensated.

Please take our short survey, brought to you by Lateral Link, and tell us how you are compensated at your firm. Then check back later for the survey results. As always, your survey responses will be kept completely confidential.

Check out the survey, after the jump.

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Associate Salary Watch: Wilson Sonsini Restores Pay to Pre-Freeze Scale

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It appears that Larry Sonsini, chairman and name partner of the high-powered Wilson Sonsini law firm, is a very good golfer. Earlier this year, while playing golf to celebrate his 70th birthday, the legendary lawyer scored a hole in one.

Sonsini isn’t the only one who’s scoring over at 650 Page Mill Road. His partners are doing deals left and right, and the fees are trickling down to the associates, who just scored some nice pay raises.

What is Wilson Sonsini up to? Let’s find out….

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Biglaw Firm Warns Associates They’ll Be ‘Disappointed’ With Comp

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You know associates are pissed when they end their emails to Above the Law with lines like this one, from a message we received last night:

NO ONE SHOULD COME HERE. EVERYONE HERE SHOULD LEAVE.

Jacob Riis photographs associates at one Biglaw firm

That’s what happens when you tell your associates that they’re going to get paid significantly below market and like it.

Several firms have not yet announced spring bonuses, and associates at these firms are annoyed. But there are only a handful of Biglaw firms that cut associate salaries back during the recession and have not yet brought their people back to market-level base compensation.

One of the firms that is lagging behind the rest of the market had an “all associates” conference call yesterday, during which management tried to explain why associates were being underpaid and undervalued by the firm.

Let’s just say that not everyone felt like a winner…

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Non-Sequiturs: 03.28.11

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Professors Richard Epstein and John Yoo

* Over the weekend, while I was at the gym, I listened to this engaging and entertaining podcast, with Professors Richard Epstein and John Yoo. They discuss Libya, Obamacare, and — perhaps most interesting for ATL readers — the U.S. News law school rankings (around the 13-minute mark). [Ricochet (subscription); accessible for free for ATL readers over here (mp3)]

* Speaking of law professors and Libya, my friend and former co-clerk, Professor William Birdthistle, is writing an interesting series of posts about his childhood in that now war-torn land. The first appears here. [The Conglomerate]

* Joining the ranks of law professors: former Supreme Court shortlister Larry Thompson, who’s retiring as general counsel of PepsiCo and entering legal academia. [Corporate Counsel]

* Hey Raj Rajaratnam, look on the bright side: at least you’re not Barry Bonds. [Dealbreaker]

* A close and critical look at the PayScale salary data used by Forbes in its recent analysis of law school graduate salaries (as well as its ranking of “best law schools for getting rich”). [Constitutional Daily]

Ken Kratz wins 'The Prize' of no criminal charges.

* A post-mortem for Yoss LLP (formerly known as Adorno & Yoss), the once high-flying Florida law firm. [Daily Business Review (registration) via WSJ Law Blog]

* Former Wisconsin D.A. Ken Kratz, of “I am the prize” fame, won’t face criminal charges. [Milwaukee Journal-Sentinel]

* Good news for same-sex, bi-national married couples confronting immigration issues. [Poliglot / Metro Weekly]

* Adrian Dayton asks: Are referrals still more important than law blogs for developing business? [Marketing Strategy and the Law]

* Blawg Review #304 has a timely theme — “Spooked by Nukes” — as well as some cool photography. [Declarations and Exclusions via Blawg Review]

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Non-Sequiturs: 03.22.11

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When in need of a pic of a T.V. cheerleader, am I right to go with Minka Kelly over Hayden Panettiere? Can we get some kind of ruling on this?

* Is it possible that in South Dakota you have to go through a shorter waiting period to buy a gun and shoot someone who is already alive than you have to go through in order to have an abortion? Could somebody check on that? [MSNBC]

* Did you see this chart showing that law professors make more than all other professors at the college level? I think I forgot to mention it because when my brain sees such horrible atrocities it enacts self-defense protocols and deletes the knowledge from my… Did you see this chart showing that law professors… [Chronicle of Higher Education]

* Same-sex couple gets deportation put on hold to pursue marriage-based immigration case. I think we’re all safer when Homeland Security isn’t run by Leviticus. [Stop the Deportations]

* If cheerleading were a real sport, this lawsuit might be really interesting. [Jezebel]

* If you think our coolest law firm bracket is dorky (don’t forget, voting ends tonight at midnight), you should check out what the bankruptcy people at Weil are up to. [Bankruptcy Blog]

* Once you get off the legal treadmill, do you ever have the urge to go back? “… That’s pride f**king with you. F**k pride.” [Law and More]

* If you think about it, pay raises should really come in the spring, when everything is new and happy, instead of the middle of winter, when everything is cold and dead. [What About Clients?]

* An obituary for Warren Christopher, former O’Melveny partner (and secretary of state, too). [Huffington Post]

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Associate Salary Watch: Big (and Good) News from Winston & Strawn

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Well that didn’t take long, did it? On Tuesday afternoon, we wrote about associates at Winston & Strawn who were upset over the lack of news on seniority-based salary bumps. Since we’re well into a new year, associates at top law firms should be getting raises, with first-years becoming second-years ($160K to $170K), second-years becoming third-years ($170K to $185), etc. But the Winston tipsters hadn’t heard anything — even though historically they’ve received pay raise news in early February, and now it’s mid-March.

Today, however, the Winston associates received some good news — very good news, in fact. “Salary memos went out today,” one Winston source reported. “The bottom line is that those who were not at market rate now are. They’ve abandoned the ‘merits-based’ system and have gone back to lockstep.”

Wow. Is merit-based compensation becoming a casualty of the economic recovery? Back when merit-based systems were all the rage, we created a category on ATL called Killing Lockstep. Perhaps now it’s time to create ones called Killing Killing Lockstep, or Lockstep Resurrected?

Regardless of whether or not this becomes a trend throughout Biglaw, Winston associates are happy — and grateful….

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Associate Bonus (and Salary) Watch: Wilson Sonsini

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In our coverage last month of top law firm partners to work for, Wilson Sonsini did well. See here and here.

(Speaking of Wilson Sonsini partners, the firm recently announced nine new ones — including Rick Frenkel, of “Troll Tracker” fame. Congratulations!)

Not only does WSGR have some great partners to work for, but they will also pay you if you work there. Getting paid is… nice.

How much will Wilson Sonsini associates receive in 2010 bonuses and 2011 base salaries?

Let’s look at the memo that went out yesterday….

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Quinn Emanuel Profits Per Partner Head Higher Into the Stratosphere

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Friday brought good news for associates at Sullivan & Cromwell. The firm announced generous springtime bonuses, which will double bonus compensation for some of the more junior classes. If you missed the news, which broke late on Friday, check it out over here.

But Friday brought even better news about litigation powerhouse Quinn Emanuel. As reported by Am Law Daily, the firm’s profits per partner in 2010 were 16 percent higher than in 2009.

So what kind of numbers are we talking about? PPP at QE is a seven-figure number, of course — but what’s the first digit?

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