Earlier this year, we heard from associates at Norton Rose Fulbright who were unhappy with their compensation. As one of them put it, “Many associates at NRF were okay with [our weak] bonuses through the recession, but now people are getting increasingly pissed off. We are not even in the same ballpark as our peers, and it is really hurting morale.”
Today we’re happy to report that Norton Rose Fulbright heard these complaints and acted upon them. We couldn’t get our hands on a memo or other documentation — if you can help us out, please email us (subject line: “Norton Rose Fulbright bonus memo”) — but here’s our understanding of the firm’s new compensation system for U.S. associates, announced earlier this month:
1. Base salaries have been raised to market levels — $160K, $170K, $185K, etc. — in all major U.S. markets.
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2. The complicated and confusing “roll in” or “true up” system that applied in some offices, in which an associate’s salary would be brought up to market for hitting a certain number of hours, is no longer in effect.
(As one source explained, “Previously, in certain offices, salaries starting second year were below market unless the associate hit 2000 hours, at which point a ‘bonus’ would be rolled into her salary for the following year. The higher salary would last for three years after an associate hit the 2000-hour mark in any year, so it was possible for an associate to see a pretty serious pay cut in her fourth, fifth, or sixth years if she went three consecutive years without hitting it. Additional lump sum bonuses were achievable but modest. The prevailing attitude was that it was not worth going past 2000 hours.”)
3. Bonus eligibility begins at 2000 hours (including 100 hours of pro bono). The lowest-tier bonuses are below the New York City market levels, but still represent “a substantial increase from the previous amounts.”
4. “Market” bonuses kick in around the 2300-hour mark. (Note the use of the word “around” — we don’t have the full scale, and our sources disagree a bit on this — some say the 2300-hour bonuses are above market.)
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5. The new compensation scheme is already in effect (effective May 1).
Norton Rose Fulbright is the world’s fifth-largest firm by headcount, so this news will affect a significant number of associates.
We reached out to Norton Rose Fulbright. The firm declined to provide details (or to confirm the ones that we presented to it), but it did acknowledge making changes to its comp system. Here’s the statement issued by U.S. managing partner Linda Addison:
Norton Rose Fulbright is committed to remaining a law firm of choice for top talent. We attract, develop, promote and retain our people strategically. Our associates contribute to the success of our firm and our clients, and we want to reward their efforts in alignment with our strategic goals. Our new compensation system, announced earlier this month, has been enthusiastically received by our associates and senior associates.
That seems to be accurate, at least based on the sources we’ve heard from. As one tipster told us, “It probably goes without saying that there is a lot of positive buzz.” Said a second source:
Management did announce a completely new bonus structure, and from what I can tell people are pretty happy with it. I certainly am. It is still below the normal New York market amounts, but it is a big improvement.
I don’t think this would have happened without your coverage, so I and many others are very grateful!
We’re happy to help. If you have a comment or complaint about compensation at your firm, please email us or text us (646-820-8477), and we’ll see what we can do.
UPDATE (6:05 p.m.): Here’s additional information from a lawyer at NRF:
I can confirm that there was no memo or other documentation relating to the new bonus stricture that was circulated. There was a PowerPoint that was presented to all the offices via video conference but copies were not distributed to associates….
I can confirm… that the bonuses at 2300 are market (15, 25, 50, 65, 80, 90, 100, 100). The bonus at 2000 is exactly half of those numbers (7.5, 12.5, 25, 32.5, 40, 45, 50, 50). In addition, at both the 2000- and 2300-hour levels, you are also eligible for a discretionary bonus. It is unclear how this is calculated or determined, though. So if you hit 2300 you could potentially receive an above-market bonus (market plus the discretionary, if any).
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David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at [email protected].