When Dentons made its initial tepid salary announcement, associates expressed their frustration by walking out of the meeting to schedule interviews. But the latest memo from the powers-that-be goes a long way toward mending those frayed relationships, with a new “special bonus” intended to bring associates asymptotically closer to the Cravath scale.
To recap, at the initial meeting, the firm kvetched about clients not wanting raises, before telling the assembled team that Dentons offers “competitive compensation” and will be figure out what that means by January 31, 2017. The firm also committed to offer a bonus to reflect 2016 performance based on vague evaluation criteria.
We haven’t fleshed out the new compensation structure (and there are some black box elements that may keep it obscured), but we do know a lot more about the special bonuses being offered, and the early reaction seems pretty positive.
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The new one-time, special bonus that Dentons offers to bring associates a little 2016 relief before they set new salaries in 2017 requires associates to meet either of the following criteria:
a. Achieve 1800 creditable hours (1750 in Kansas City and St. Louis) for the full year 2016, of which 1750 (1700 in Kansas City and St. Louis) must be billable hours; OR
b. Achieve 1850 creditable hours (1800 in Kansas City and St. Louis) on an annualized basis for the final six months of 2016, of which 1800 (1750 in Kansas City and St. Louis) must be billable.
The stated annual target for Dentons is 2000 hours, so the firm is going out of its way to expand access to this bonus. Kudos to Dentons for realizing that when it’s switching horses midstream, there’s a fundamental unfairness in holding people to draconian hours requirements. These are relatively lax, and the option of pushing hard over the last six months of the year to get back on track is a welcome move.
In addition, to recognize significant individual contributions in 2016, the amount of the Special Bonus will be increased by twenty-five percent (25%) for any associate with either:
c. 2100 creditable hours (2050 in Kansas City and St. Louis), of which 2000 (1950 in Kansas City and St. Louis) must be billable hours, for the full year 2016; OR
d. 2200 creditable hours (2150 in Kansas City and St. Louis) on an annualized basis for the final six months of 2016, of which 2100 (2050 in Kansas City and St. Louis) must be billable.
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That sweetens the pot a bit. And at least one tipster is happy:
We received the attached memorandum re associate compensation. I’m actually pretty happy with it. You definitely don’t have to bill 2000 hours at Dentons (technically it’s their requirement but nothing really happens to you if you don’t bill 2000 and the average associate hours are below 2000), so the fact that I can bill 1800 hours and still get… a “special bonus” seems fair to me. I would rather have this set-up than be someplace where I had to bill 2000 or more even if I would get more money.
Dentons also reminds associates that this bonus is entirely independent of the annual merit bonus.
The amount of these special bonuses is based on the 2016 salary each associate receives, which varied across offices. Here’s the rundown:
| New York | Atlanta/Chicago/Dallas/ Denver/Houston/Los Angeles/Phoenix/ San Diego/San Francisco /Silicon Valley/D.C. |
Boston/Short Hills/Tysons Corner | KC/St. Louis | |
| Associate | 5% | 6% | 4% | 5% |
| Managing Associate | 8% | 10% | 3% | 7% |
| Sr. Managing Associate | 11% | 10% | 6% | 10% |
That’s a bit abstract, but assuming a New York associate had a salary of $160K in 2016, if they meet the relaxed standards for this bonus, they will take home $174,400, and if they meet the enhanced 25 percent upgraded bonus, they will take home… $180K.
So first-years in New York working above and beyond the firm’s stated target will be matching Cravath. For a firm with a rap for paying a little below market in most of its offices, that’s not the worst salary deal in the world.
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Joe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.