When we’ve written before about McKool Smith, our coverage has generally been positive. During the dark days of the Great Recession, we talked about the firm as a Biglaw lifeboat. The firm is known for its cutting-edge litigation practice and above-market compensation. It’s a member of the $160K-Plus Club, a small group of firms that pay starting salaries above the $160,000 that is standard for Biglaw.
In years past, McKool Smith supplemented those above-market base salaries with above-market bonuses, said to run about 20 percent above the Cravath scale. But that wasn’t the case for 2014, according to several sources.
We understand that the firm paid bonuses that were roughly half the going rate — i.e., bonuses that were about half the Davis Polk scale — to most associates with decent hours (hours over 2000). If you wanted to get a bonus on the original Simpson scale, a shade lower than Davis Polk, you needed to rack up high hours — in excess of 2700.
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Times have changed at McKool Smith. “They used to comfortably beat market bonuses,” said one source. “Over the last couple of years, they’ve only marginally beat market bonuses. And now this.”
One caveat about these reports: McKool doesn’t publish a firm-wide bonus memo and instead issues individualized letters. It’s possible that these reports are outliers. We tend to doubt it, however, since we heard from multiple sources who conferred with colleagues before contacting us, and the reports we received were all consistent.
We reached out to the firm. We haven’t heard back yet, but if and when we do, we will update.
You might expect McKool Smith associates to be furious, but that’s not the universal reaction. As one tipster told us, “For what it’s worth, the general reaction isn’t so much anger as it is concern that the firm may be [in trouble].”
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UPDATE (5:25 p.m.): One source at McKool Smith claims that the firm is getting a bum rap: “I know for a fact that you didn’t necessarily need to touch anywhere close to 2700 to see Davis Polk numbers. I think the firm spread it out more than they’ve done in the past, and — as always is the case — you’re hearing from the unhappy folks more than the happy ones.”
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