JD Journal » associate compensation

Spring Bonuses at WilmerHale

joshua — Thu, 03 Mar 2011 21:49:33 +0000

Like so many of its counterparts, WilmerHale announced that associates will receive a spring bonus to be paid on April 29. Most firms have followed the scale set by Cravath, but in keeping with its move away from lockstep compensation, WilmerHale says bonuses will be merit based and in many cases will significantly outpace the market. According to the firm, roughly 43% of its associates received above market size bonuses at the end of 2010.

That might help take the sting off of the lower than average salaries associates reported in The American Lawyer’s associate’s survey for 2010.

Shearman & Sterling Jumps on the Spring Bonus Bandwagon

joshua — Thu, 24 Feb 2011 21:25:23 +0000

We spent much of the first half of winter bemoaning the sorry state of associate bonuses which held firm at last year levels despite widespread increases in firm profits. Now we get to spend the end of winter celebrating the fact that most firms seem to have caught on to this particular inequity.

Following a pattern set by Cravath, which has become a pattern itself, Shearman & Sterling has announced that associates will receive a spring bonus at the end of April. The numbers are by now familiar – $7500 to $20,000, depending on seniority.

Cravath was not the first firm to announce spring bonuses, but it set the bar a bith higher in terms of size and most firms have lined up behind Cravath.

Linklaters Paying Spring Bonus to US Associates

joshua — Wed, 23 Feb 2011 18:56:44 +0000

In yet another sign that things are looking up in the legal industry, Linklaters became the second Magic Circle firm to announce spring bonuses for its US based associates. Freshfields announced its spring bonuses last week, following a string of New York firms breaking the ice.

Linklaters will pay associates in its US offices as well as US-qualified associates outside the country between $7500 and $20,000 dollars at the end of April. These bonuses match the scale set by US firms like Cravath and Cleary Gottlieb.

Linklaters has 26 offices in 19 countries and is one of the five members of the “Magic Circle” of prominent UK law firms.

Boies Schiller Leads the Bonus Race

marvins — Thu, 23 Dec 2010 16:54:38 +0000

Boies, Schiller & Flexner LLP, one of the nation’s premier law firms with over 200 lawyers, is now leading this year’s bonus race. The firm recently announced its market busting bonus schedule which will pay first year associates a bonus of $75,000 while senior associates take home over $200k. This bonus plan is head and shoulders above bonus schedules issued by the firm’s competitors in the legal industry. In the previous weeks, other law firms such as Susman Godfrey, Quinn, Emanuel, Urquhart & Sullivan, and Cahill Gordon & Reindell announced bonus schedules remarkably simmilar to the disappointingly low plan issued by Cravath, in which even the top associates will receive less than a first year Boies Schiller attorney. This doesn’t come as a huge surprise; last year Boies Schiller also bucked the trend and paid bonuses well above market rates.

Boies Schiller partner Philip Korologos explained that 2010 has been a productive year for the firm and that’s why they can afford to give such bonus amount to its associates. “Boies, Schiller & Flexner LLP is proud of its associates’ extensive contributions to the firm’s considerable accomplishments in what was a very busy year.”

According to the recent AM Law 100 financial data, Boies, Schiller & Flexner registered gross revenue of $296 million in 2009, which was 0.3% higher compared to its revenue in 2007. In 2009, the revenue per lawyer at the firm also hiked by 4.7%, closing it to $1.35 million.

Morning Roundup

joshua — Wed, 24 Nov 2010 01:17:48 +0000

Good morning everyone! Today is Wednesday, November 24th. Here’s a quick look back at yesterday’s headlines.

The exchange of artillery fire between North and South Korea set the stage for China to make a distinctive mark on the world stage…

The law firm bonus season began…

Crowell & Moring LLP & the University of the District of Columbia David A. Clarke School of Law established the Took Crowell Institute for At-Risk youth…

Wilmer Hale announced a plan for leadership succession…

Bonus Season has Begun

joshua — Tue, 23 Nov 2010 20:09:38 +0000

Last year, Cravath kicked off the bonus season with a bonus schedule that represented huge cuts from previous years. Most firms followed behind, although some firms took the Sullivan & Cromwell model instead, which differed only in that the most senior associates got an extra $5,000.

We can only hope that Cravath isn’t as influential at setting the market rate this year. Cravath will be paying bonuses that look identical to Sullivan’s 2009 scale – that is to say, no different from their own 2009 bonuses unless you are a 7th year associate. First year associates will receive $7,500, senior associates will get $35,000 and everyone else falls somewhere in between. AM Law has the full bonus scale and a copy of the firm’s memo here.

Obviously 2009 was a difficult year for the legal industry, as it was for the rest of the economy, but most signs indicate that 2010 was a vast improvement. We had hoped to see that reflected in bonuses for the year. It’s possible that other firms will buck the Cravath scale, even though very few did last year, but according my magic 8-ball the outcome is doubtful. Skadden has already followed with an identical bonus schedule.

Revenue and Profits down, PPP up at Dickstein Shapiro

joshua — Mon, 01 Mar 2010 18:06:42 +0000

As a firm, Dickstein Shapiro shared the country’s economic woes in 2009 with revenues dropping by 4.78% and profits dipping 5.17%, but the partnership still managed to do ok. Per partner profits were up 6.76% to just over $1 million. The discrepancy is due to an 11% reduction in the number of equity partners firm wide. The number of non equity partners rose slightly and non equity partner compensation jumped by a little more than 8% to an average of $525,000.

Associates didn’t fare as well with two rounds of layoffs and a salary freeze. This year, associates at the firm are being paid using a merit based system rather than lockstep compensation.

Winston & Strawn Keeps Salaries Frozen

joshua — Fri, 12 Feb 2010 19:00:58 +0000

Winston & Strawn froze salaries last year and now it appears that the freeze is still on. Associates received emails today regarding their compensation and across the board, they are still the same as they were two years ago. Third year associates are still making $160k.

This might seem like a way to increase business at the firm – pay associates less so the firm can advertise lower rates for its clients, but that isn’t the case. Hourly rates for the associates’ time have gone up.

Meanwhile, fellow Chicago denizen Sidley Austin has continued to pay its associates at 2008 levels as well, while they evaluate the market. Is it any surprise that the National Law Journal says the market for Chicago laterals is picking up?

UPDATE: Sidley has just announced a salary thaw and raise. Read about it here.

Revenues and Profits Increase at Sheppard Mullin

sara — Tue, 09 Feb 2010 16:47:58 +0000

Los Angeles based firm Sheppard Mullin Richter & Hampton reported slight increases in revenue and profits in 2009. Revenue increased 2.5% to $361 million. Profits per equity partner were $1.244 million, an increase of 3.5%. Revenue per lawyer though decline to $753,645, 1.8%.

Last year the firm cut 25 lawyers in the first two months. In January 2009 the firm also announced a freeze of associate compensation for the year. The freeze is no longer in effect. Sheppard Mullin chair Guy Halgren says that the demand for transactional and real estate work was low, the decline in those areas was offset by a demand for labor and employment, bankruptcy, government contracts and anti-trust practices.

Founded in 1927 Sheppard Mullin Richter & Hampton is a general practice firm with over 520 attorneys in 11 offices.

Raises (sort of) and Bonuses at Pillsbury

joshua — Thu, 04 Feb 2010 16:01:35 +0000

Let’s start with the easy part. Associates in the New York office of Pillsbury are having their salaries restored to the level they would have been at had they never been frozen in the first place, so long as they met their billable hour target of 1,755 hours. Associates that missed their target are still getting a raise, but are only being bumped up one level.

Outside of New York, associates are also getting raises but based on a new compensation model that has base pay set lower. For example, first year associates in California will have a base pay of $145k instead of New York’s $160k. This isn’t terribly uncommon and we’re still on familiar ground here. Associates in DC, Virgina and California (but not Sacramento) who hit their billable hour target for the year will get an extra bonus bringing them up to the New York base pay level. Seems reasonable. All other US associates are stuck with their lower salaries.

Salaries for Asia have not yet been set and the firm says it’s working on it.

Things get a bit more complicated for bonuses. Once again, New York associates have a clear bonus plan that matches the Cravath scale. Outside of New York, associate bonuses are tiered based on some combination of billable hours and merit, and will either be less than the Cravath scale (for the somewhat meritorious) or at the Cravath scale (if you’ve been very very good this year).

Mayer Brown Raises Salaries Back to Pre-Recession Levels

joshua — Tue, 02 Feb 2010 22:22:34 +0000

The salary marketis starting to crystallize now. Mayer Brown today joined other top tier firms in restoring associate salaries back to pre-recession levels. That means everyone is being bumped up two levels, putting all Mayer Brown associates where they would have been had salaries never been frozen in the first place. There are still some minor differences between the firms – for example, no word yet on whether Mayer Brown will issue an extra bonus to make up for the lost salary in 2009, but these differences affect past compensation and not the state of the salary market going forward.

The question is, will the market respond? Several firms that have thawed salaries have only moved their associates up one level. Will this put pressure on them to reconsider that decision? And how will it affect the salary market for those firms that have adopted or are intending to adopt a merit based compensation plan? It’s too soon to say, but when it happens, you will read about it here.

Mayer Brown is one of the largest global law firms both by number of lawyers and revenue. The firm has over 1,800 lawyers in key business centers across the Americas, Asia and Europe.

Chadbourne & Parke Does Right by its Associates

joshua — Tue, 26 Jan 2010 16:56:09 +0000

If you’re a Chadbourne & Parke associate, we urge you to resist the temptation to gloat a little when talking to friends at other firms today. If you’re friends with a Chadbourne associate, we recommend you change your lunch plans.

Starting from the small stuff and working our way up to the good stuff, Chadbourne & Parke is paying a bonus on what appears to be the Cravath scale. But wait, that’s not all! In November the firm indicated that they would be giving associates back the money they lost from April’s salary cutssometime in January. Well that sometime has come and on top of their bonus check all associates in good standing will be paid the difference between their salaries post cut and what they would have made under the old salary. Still not impressed? The pay cut has been rescinded. Salaries have been thawed out. Not good enough? Still want more? All associates are getting a double bump in level, being restored to the pay grade and dollar amount they would have been making had the recession never hit.

Congrats, C&P associates. Try not to rub it in your friends’ faces too much.

Bonuses and Thaws at Wilson Sonsini

joshua — Mon, 25 Jan 2010 22:21:56 +0000

Wilson Sonsini is thawing salaries, and using the Cooley Godward model. First years are getting $160k, third years are making $170k (had their been no salary freeze they would be drawing $185k) and to avoid paying second and third years the same, the second year associates are getting $165k.

Associates at Wilson Sonsini are also getting their year end bonuses. There are two tiers of bonuses, one for any associate that billed 1900+ hours and a higher tier for those that hit 2100 hours. The second tier of bonuses is higher than the Cravath scale, ranging from 9k to 45k.

All in all, this is fairly good news coming from a firm that laid off over 100 last year and recently laid off 20 more staffers.

Wilson Sonsini was founded in 1961 in Palo Alto, California and also has offices in Austin, New York, San Diego, San Francisco, Seattle, Shanghai, and Washington, D.C.

Hughes Hubbard Thaws Salaries, Issues Bonuses

joshua — Mon, 25 Jan 2010 17:44:08 +0000

Hughes Hubbard is thawing out salaries and junior associates are getting a double bump, placing them where they would have been had there been no salary freeze. Senior associates are splitting the difference, with the class of 2004 and beyond getting bumped up but not quite as far. Of course, this further muddies the water of the “market rate” situation.

In addition to salary raises, Hughes Hubbard associates are getting their 2009 bonuses. Those that made their billing target of 1950 hours will get a bonus on the Cravath scale. However, there are above market bonuses being paid out to associates that hit 2100, 2300 or 2500 hours last year.

Hughes Hubbard & Reed LLP, an international law firm based in New York, is ranked number one in New York and number two nationally on The American Lawyer’s A-List of the “top firms among the nation’s legal elite.” AmLaw also ranked the firm #4 in “Top Growth Firms” among the nation’s 200 largest firms over the last 10 years.

Cooley Godward Salary Thaw, and is there a Market Rate Anymore?

joshua — Fri, 22 Jan 2010 22:09:33 +0000

Cooley Godward has lifted last year’s salary freeze, sort of. First years will continue to make $160k, which puts them ahead of firms that have cut first year salaries, second years move up to $165k and third years jump up to $170k. This isn’t a true up, but Cooley third years are once again earning more than the class below them.

Two years ago, biglaw salaries were pretty much the same across the board, so salary wasn’t typically a factor in choosing where to work. Now things are a bit messier. Among the firms sticking with lockstep compensation, some have cut salaries, some have cut salaries outside of major markets, some have frozen salaries, some have thawed salaries, and some have thawed salaries with a “true up”. And as difficult as that can be to sort out, the situation gets far more complicated when looking at the firms that have moved to merit based compensation plans. Most, but not all, have adopted a three tier system, and most of those have two levels within each tier. Some have cut base pay with the promise of potential greater earnings, some have not. Some are holding back a percentage of pay to be released upon hitting certain milestones.

All of this means that there is no longer a “market rate” for associate compensation. That may not matter much this year, since new graduates aren’t likely to be quite as picky about where they work so long as they have a job, but as the economy improves, these variances in salary are going to be one of the factors attorneys evaluate in choosing a firm. Will we see a return to a standardized salary across the board, and if so, which plan will win out?

Merit Based Pay at Drinker Biddle

joshua — Tue, 19 Jan 2010 19:35:24 +0000

Drinker Biddle is moving to a merit based pay system, becoming the latest in a string of major law firms to abandon lockstep compensation. Under the new plan associates in their second year and beyond are broken down into four tiers. Each tier has a baseline salary but the firm is quick to emphasize that final salaries will recognize the individual contributions an associate makes to the firm’s success and could rise well above the minimum salaries. There are also two separate scales for major markets such as New York, and offices in other locations.

Associates in New York, Chicago, Washington DC and California will have base salaries of $145k, $165k, $185k, and $250k depending on tier, with the top tier reserved for those expected to make partner within two years. Outside the major markets, salaries range from $130k to $185k. Abovethelaw.com is reporting that this represents a salary cut for 53% of Drinker Biddle’s associates, but that’s based only on minimum salaries for each tier and may not be reflective of final salaries.

This system applies to associates in their second year and beyond. Drinker Biddle is continuing its new first year program, as reported here. First year associates will undergo extensive training while drawing salaries of $105k, and clients will be charged a reduced rate for any work done by this group.

Drinker Biddle & Reath LLP was founded in Philadelphia in 1849. The firm has more than 650 attorneys in 12 offices in the US. Its largest offices are in Philadelphia; Chicago; Florham Park, New Jersey; and Washington, DC.

Dickstein Shapiro Abandoning Lockstep

joshua — Thu, 14 Jan 2010 18:53:04 +0000

The lockstep march away from lockstep compensation continues unabated as 2010 gets into full swing. The latest firm to join the thundering herd is Dickstein Shapiro, which will initiate a three tiered merit based system as of January 22. Regulars readers of our page are no doubt familiar with the basic concept – associates are broken down into three tiers based on various subjective and objective criteria. Dickstein Shapiro associates are, in yet another market conforming convention, broken down into A and B levels within their tiers to determine base pay.

Entry level A associates will be making $145k per year and Entry B associates will earn $160k. What’s the difference between level A and level B associates? According to a statement made to abovethelaw, it’s “…based on their achievement in a number of core competencies, including productivity, problem solving, legal research, writing, communication, fact development, negotiation skills, supervisory responsibilities, and adherence to the firm’s core values…”.

Maybe it’s just me, but if I had known that I could earn $145k per year working as a lawyer in a major law firm without being productive, competent at problem solving, legal research, writing, communication, fact development and negotiating, I would have chosen a different career. That sounds like easy money. As for supervisory responsibilities, how much supervising are entry level associates expected to do?

It’s easy to pick on Dickstein Shapiro for basing salary differences on the skills required to be a lawyer, but the truth is it’s not all that different from a variety of firms moving toward merit based compensation plans.

Dickstein Shapiro LLP, founded in 1953, is a multi-service law firm with more than 400 attorneys in Washington, DC, New York, and Los Angeles.

Salary Cuts at Kaye Scholer

joshua — Wed, 13 Jan 2010 18:45:14 +0000

Kaye Scholer is cutting first year associate salaries to $145k, but unlike many other firms they aren’t doing it under the guise of abandoning lockstep compensation. Additionally, any associate that hits their billable hour target by December will be getting a bonus that should bring them back to or above $160k. In the meantime, associates that hit 1800 hours last year will be getting their lockstep raises, and Kaye Scholer has announced bonuses ranging from $20k to $40k for 2009.

In order to qualify for the 2009 bonus, associates must have billed 2200 hours (for $20k) and 2400 hours (for $40k), but the interesting kicker is that all classes are receiving the same bonus, providing they hit the targeted number of hours. For junior associates that made the goal, this is an above market bonus, although it’s a bit light for senior associates in the 2200 hour category.

Kaye Scholer was founded in 1917 by Benjamin Kaye and Jacob Scholer. The firm has more than 500 attorneys in eight offices located in New York, Chicago, Frankfurt, London, Los Angeles, Shanghai, Washington DC, and West Palm Beach.

Salary Cuts and Merit Based Compensation at McDermott Will & Emery

joshua — Tue, 12 Jan 2010 20:53:01 +0000

McDermott Will & Emery is moving to a merit based compensation system beginning in 2011. Like several other merit based plans we’ve detailed on these pages, this is a three tiered system. Some firms have moved to a merit based plan that holds the line on starting salaries, while others have cut base pay. McDermott is squarely in the latter category.

Under the new plan, associates on the bottom tier will have a base salary of $145k. Any associates looking for a bonus plan that will help make up the difference in base salary may be disappointed. The bonuses will be based on market conditions, the success of the firm, and merit. If the market scale for bonuses is anything like 2009, McDermott associates will need the bonus just to catch up to the base salaries their contemporaries are earning.

As noted, this plan isn’t going into effect until next year. This year the firm is just cutting salaries. New associates will be pulling in $145k and second year associates are seeing their pay cut to the same level. Which, remarkably, is the same as it would be under the merit based system that isn’t actually in effect.

McDermott Will & Emery LLP, founded in 1934, is a prestigious international law firm headquartered in Chicago, Illinois. It is one of the top 10 largest law firms in the United States and one of the 20 largest in the world.

Salary Cut at Pillsbury Winthrop

joshua — Thu, 07 Jan 2010 16:54:37 +0000

Pillsbury’s first year associates outside of New York are receiving a salary cut, down to $145k. Any first year that bills in excess of 1950 hours will receive an additional $15k bonus. First years in the New York office will continue to receive $160k.

Salaries for 2010 have not yet been set and for the moment all associates are being paid at 2009 levels. When compensation levels are set, any raises will be made retroactive to January 1. In addition, 2009 bonuses will be paid at the end of this month.

Pillsbury Winthrop Shaw Pittman is an international law firm with offices located throughout the US and globally, including key financial centers New York, London, Tokyo and Shanghai.

Irell & Manella Doubles Market Rate on Bonuses

joshua — Wed, 06 Jan 2010 12:28:23 +0000

Los Angeles based Irell & Manella gave its associates the good news last week. The firm is paying double the Sullivan & Cromwell scale, which is the Cravath scale with a little boost at the top. There are no performance reviews or subjective criteria, just a minimum number of billed hours. All associates who billed 1900 hours last year got the bonus.

Irell & Manella LLP was founded in 1941 by lawyers Lawrence E. Irell and Arthur Manella, and has grown to 220 lawyers. It has offices in Century City and Newport Beach.

Dechert Pays Bonuses, Cuts (a few) Salaries

joshua — Tue, 05 Jan 2010 15:43:27 +0000

Dechert is paying year end bonuses that should, by now, look familiar to those following the industry. Like many of its contemporaries, the firm is matching the Cravath bonus scale, although it says that a few exceptional individual will receive bonuses up to $25k larger than the standard grid. In addition, it will continue to advance its associates forward in terms of base salary.

Most associates, that is. In Charlotte and Hartford, Dechert has decided to return to 2007 compensation levels for the 18 associates in those offices. This is more than a salary freeze, it’s an out and out pay cut.

Dechert is an international law firm based in Philadelphia with 18 offices and over 1000 attorneys.

Salary Thaw and Bonuses at Arnold & Porter

joshua — Mon, 04 Jan 2010 16:15:31 +0000

At the start of 2009 Arnold & Porter announced that it was freezing salaries but held out the hope that some or all of the difference might be paid out later if economic situations warranted. At the end of December a firm wide memo went out in which Arnold & Porter announced that all associates in good standing would be receiving the full difference between their frozen salaries and the salary they would have otherwise earned in one lump payment. Furthermore, salaries have been unfrozen for 2010, with everyone getting bumped up a year. Arnold & Porter will also be paying unspecified bonuses for 2009 based on a combination of billed hours and subjective reviews.

Founded in 1946, Arnold & Porter LLP is an international law firm based in Washington DC, which is well known for its trial, corporate, and antitrust work; and for its pro bono commitments and support for progressive causes.

Mayer Brown Bonuses Match Cravath

joshua — Mon, 28 Dec 2009 15:05:57 +0000

Mayer Brownassociates got the news on Christmas Eve – the firm is matching the Cravath bonus scale. $7500 for first years, $30k for senior associates and the same sliding scale in between. What associates have not yet been told is whether or not they’re getting a pay raise next year. Mayer Brown froze salaries this year and have yet to announce next year’s compensation plan.

Mayer Brown is one of the largest global law firms both by number of lawyers and revenue. The firm has over 1,800 lawyers in key business centers across the Americas, Asia and Europe.

Weil Gotshal Bonuses

joshua — Wed, 23 Dec 2009 19:33:43 +0000

Weil Gotshal is paying most of its associates on the Sullivan & Cromwell scale – $7500 for the first years up to $33k for the most senior – but some of the senior associates who are on Santa’s nice list will be getting a bit more. At the top of the scale, bonuses for about 25% of the most senior associates will hit the $50k mark. Weil is also bumping everyone up a notch for 2010 salaries.

Weil, Gotshal & Manges is an international law firm headquartered in New York City. It is one of the largest and most highly regarded law firms in the world, with approximately 1,300 lawyers and gross annual revenue in excess of $1.7 billion.

Wachtel Lipton Bonuses

joshua — Tue, 22 Dec 2009 22:39:19 +0000

Wachtel Lipton pays bonuses as a percentage of base salary, with some variance in percentage based on year. Two years ago, associates received a bonus of around 100% base salary, not bad considering Wachtel is still paying above market salaries. Last year that dipped down to around 70%. This years, associates are receiving around 50% with junior associates receiving a few points less. Given that a first year associate is still earning $165k at Wachtel Lipton, this puts the firm up near the top for both salary and bonuses. Unlike many of its contemporaries, Wachtel has not frozen salaries either. It’s not hard to imagine that it will have a nice leg up in recruitment for a few years to come based on 2009.

Wachtel Lipton has a little over 200 attorneys practicing in New York City. Founded in 1965, it is frequently among the top firms for profit per partner.

Salary Thaw and Bonuses at Hogan & Hartson

joshua — Tue, 22 Dec 2009 21:06:15 +0000

First a little background: Hogan & Hartson pays associates on a two tier system, where associates can choose to receive higher base salary but with a higher billable hours requirement, or take a lower base salary with lower expectations. This year, salaries were frozen at 2008 levels and in the spring, Hogan & Hartson arbitrarily moved any associate not on track to make the higher billable hour total down to the lower track, paying them the less lucrative salary, but with the promise to restore the money if they caught up.

Today Hogan & Hartson passed out three nice bits of news. First, salaries are being unfrozen and all associates will advance one year in 2010, although the frozen year will not be restored. Second, anyone that was bumped down a track who meets the billable hour requirement for the upper track will receive the difference in a lump sum payment. They will also be returned to the higher track, even if they didn’t meet the hourly total for this year. Finally, bonuses have been announced. The bonuses are discretionary and require that the associate meet a billable hour target. Non billable hours above and beyond the call of duty may be credited to meet the total at the firm’s discretion.

Partial Salary Thaw at Fulbright

joshua — Mon, 21 Dec 2009 23:51:20 +0000

2009 salaries and bonuses at Fulbright have been frozen at the 2008 level. According to tipsters in the Washington DC office, however, Fulbright has decided to advance everyone one level for bonuses, although base salaries will remain frozen. Because Fulbright’s compensation model is heavily weighted toward bonuses, this is good news indeed for Fulbright associates.

For the moment our information is limited to the Washington DC office. If you have information about bonuses in other offices, please slip us an anonymous message here.

Founded in 1919, Fulbright & Jaworski LLP employs over 1,000 lawyers in 16 locations in Austin, Beijing, Dallas, Denver, Dubai, Hong Kong, Houston, London, Los Angeles, Minneapolis, Munich, New York, Riyadh, San Antonio, St. Louis and Washington, DC.

Kelley Drye Trifecta – Abandon Lockstep, Freeze Salaries, Pay Bonuses

joshua — Fri, 18 Dec 2009 18:32:32 +0000

In a firm wide email sent out yesterday, Kelley Drye managed to fold what would typically be three different stories into one.

Over the next two years, Kelley Drye will move away from lockstep compensation and into a merit based pay scheme. Details have not yet been worked out. As a first step, however, 2010 salaries will be frozen at 2009 levels. Salaries for incoming associates, who were scheduled to begin in January, have not yet been set and according to the firm would be decided “early next year”. Looking at my calendar, January appears to me to be pretty early in the year so I certainly hope by “early next year” the firm means “within the next two weeks”. Either that or the firm is planning to re-defer their new associates but forgot to tell anyone. As a final point of business, the email said that bonuses for this year would range from $10k to $30k which puts them above the Cravath bonuses on the low end, assuming that first year associates receive bonuses at all.

Kelley Drye & Warren LLP is an American law firm headquartered in New York City. It has over 300 attorneys in 7 offices, including an affiliated office in Mumbai.

Stroock Pays Bonuses, Lifts Salary Freeze

joshua — Thu, 17 Dec 2009 22:37:36 +0000

Stroock is handing out bonuses this year, and like so many before them, they’re paying on the Cravath schedule. That is, any associate that hit their billable hours target of 1900 will get a Cravath size bonus and the firm says that those that “made extraordinary contributions to the firm” will get a bit more. As a reminder, the Cravath scale ranges from $5k for first year associates up to $30k for seniors.

The more significant news from Stroock is the lifting of the salary freeze. All classes will advance next year and receive a pay bump accordingly.

Stroock & Stroock & Lavan LLP is based in New York City, with approximately 350 lawyers in three offices, including Miami and Los Angeles. It was founded in 1876.

Seyfarth Shaw Abandons Lockstep

joshua — Thu, 17 Dec 2009 18:54:12 +0000

Like many firms before it, Seyfarth Shaw is abandoning lockstep starting in 2011. Details haven’t been released, not even to the associates who must now spend next year trying to hit performance goals that have not been announced in order to receive salaries that have not yet been determined but that’s just part of the charm of working for biglaw. 2010 salaries will be based on 2009 performance and although exceptional associates can expect a 5% salary increase next year, those that merely met expectations will be rewarded with a 5% pay cut. Exceeding expectations without being exceptional is good enough to get you a salary freeze, so a second year associate that is exceeding expectations can expect to be paid the same as a wet behind the ears first year and a second year associate meeting expectations will be paid less than colleagues that haven’t had the pleasure of prepping their first document. Seyfarth Shaw’s web page says that they pay “competitive salaries”. Who knew that meant competing with each other to avoid being paid less than a first year…

I’m not sure which is more insulting – getting a 2010 pay cut for meeting 2009 expectations, or being told that at the end of 2009.

UPDATE: A tipster reminded me that Seyfarth Shaw has already cut the salaries of the incoming first year associates by five to ten percent, so meeting expectations isn’t going to drop your salary below that of a first year associate after all. Well, isn’t that a relief.

Sonnenschein Abandons Lockstep and Cuts Staff

joshua — Tue, 15 Dec 2009 22:30:57 +0000

There are two unconnected stories coming out of Sonnenschein today.

The first is that the firm has made staff cuts 14 days before Christmas. The firm has confirmed the staff layoffs to abovethelaw.com but no details were provided on the number of staff cut. No associates were cut.

The firm also laid out the outlines of its new compensation plan being implemented in early 2010. I say outlines, because important details like base compensation seem to have been overlooked. Like many other firms, Sonnenschein is moving to a three tiered merit based system. The firm says that bonuses based on merit will make up a larger part of associate salaries. Although everyone certainly appreciates a large bonus, it does make financial planning a bit more difficult – particularly when nobody yet knows what the baseline pay will be.

Sonnenschein Nath & Rosenthal is an international law firm headquartered in Chicago with 13 offices and 800 attorneys around the world.

DLA Piper Abandons Lockstep

joshua — Tue, 08 Dec 2009 21:40:19 +0000

DLA Piperhas joined the lockstep march away from lockstep compensation. In a memo today, the firm outlined its new associate compensation package. In broad terms, it looks familiar. The overall structure resembles the plan published recently by Orrick, a three tier system with levels within the tiers. Unlike Orrick’s plan, however, DLA Piper associates will have 15% of their pay withheld each year and will have to earn it back by achieving what amounts to a certain grade on their performance review. True, the grades are numerical, not alphabetical, but the descriptions are reminiscent of grade descriptions commonly found in law school. What’s more, DLA Piper outlined the percentage of associates they expect to make each grade, leading AboveTheLaw to refer to it as a grading curve. You can also see a copy of the memo at ATL. It’s not clear that it is a curve, however, since there’s no indication that the expected percentage of associates at each grade level is fixed.

One Essex Court Raises Trainee Salaries

Erik Even — Fri, 14 Aug 2009 16:27:35 +0000

The 2010 incoming trainee class at London’s One Essex Court will be paid £60,000 ($99,550) per year, or a £15,000 ($24,900) above current rates.

This is as much as 60% more than new trainees are paid at other major British law firms, blawgs are reporting. And most other firms have cut salaries, not increased them.

The firm is taking in three trainees this October at £45,000 ($74,700).

One Essex Court is a leading set of barristers’ chambers, specializing in commercial litigation. It employs 66 lawyers.

Mintz Levin Lays Off Associates, Staff

Erik Even — Wed, 05 Aug 2009 19:35:25 +0000

Boston’s Mintz Levin has laid off an undisclosed number of attorneys and staff. Blawgs are reporting that 15 associates were targeted, amongst others.

The firm is also working on making changes in compensation.

Blawgs are also saying the firm conducted a round of stealth layoffs in February.

Mintz Levin Cohn Ferris Glovsky & Popeo is a general practice law firm employing 500 attorneys worldwide. Headquartered in Boston, Mintz also has offices in New York City, Washington DC, Stamford, Los Angeles, Palo Alto, San Diego, and London.