JD Journal » merit-based bonuses

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.

Snell & Wilmer Decimates Associate Salaries

Erik Even — Fri, 19 Jun 2009 22:05:55 +0000

Phoenix, Arizona’s Snell & Wilmer, which in May laid off between 30 and 40 staff members, has now cut associate salaries by 10% across the board.

The pay cuts are effective July 15th. The firm promises to pay performance-based bonuses later this year.

Snell & Wilmer was founded in 1938 by Frank Snell Jr. and Mark Wilmer. The firm is the largest in the state of Arizona and the 99th largest in the US by number of lawyers, according to the National Law Journal’s 2007 statistics. The southwestern regional firm, which has about 1,000 employees, also has offices in seven other cities in Arizona, California, Nevada, Utah and Los Cabos, Mexico.

Frost Brown Todd Cuts Incoming Associate Salaries

Erik Even — Fri, 12 Jun 2009 17:38:49 +0000

Incoming associates at Cincinnati’s Frost Brown Todd will get a lower salary, although specific numbers have not been released.

In addition, the new associates will spend their first 1,000 hours in an “apprenticeship program.” Clients will be billed at a lower rate for work done by “apprentices.”

I keep putting the word “apprentice” in quotes because an apprentice is a 16-year-old learning to swap out a transmission, not a professional with a college degree and a law degree.

Those who complete the apprenticeship program can earn a merit-based bonus, and the opportunity to get on the regular lock-step pay track after one year.

The firm’s most famous former associates are Jerry Springer and Kenneth Starr. So, way to contribute to America, guys.

Frost Brown Todd LLC is one of the largest law firms based in the Midwestern United States. It resulted from the 2000 merger of Frost & Jacobs LLP, a Cincinnati-based firm, with Brown Todd & Heyburn PLLC, a Louisville-based firm. It presently has 370 attorneys working in nine offices throughout Tennessee, Kentucky, Ohio, Indiana, and West Virginia.

Kilpatrick Stockton Cuts Associate Pay

admin — Fri, 05 Jun 2009 17:10:57 +0000

Kilpatrick Stockton will cut associate salaries by 10%, effective July 1st. So, Happy Independence Day!

Starting pay for associates will be cut from $145,000 to $130,000 in Atlanta and North Carolina, and from $160,000 to $145,000 in New York and Washington DC.

The pay cuts reverse salary increases made in the beginning of 2008. They affect all 200 US associates, except a few first years. And associates can offset the salary decrease by earning bonuses.

Kilpatrick Stockton employs more than 500 attorneys globally, in Atlanta and Augusta, Georgia; Charlotte, Raleigh and Winston-Salem, North Carolina; New York, New York; Washington, DC; Dubai, UAE; and Stockholm, Sweden.

Sonnenschein to Slash Associate Pay [Update]

Erik Even — Tue, 26 May 2009 16:40:43 +0000

Sonnenschein Nath & Rosenthal plans to cut associate salaries, beginning June 1st.

First year salaries, previously a Biglaw standard $160,000, will be reduced to $145,000.

Sonnenschein seeks to make associate salaries performance-based, and will create an associate-partner committee to work out the details. This year, the firm will have a merit-based bonus program; bonuses will be paid in January 2010.

Sonnenschein Nath & Rosenthal LLP is an international law firm with 700 lawyers and other professionals in the United States and Europe. Founded in Chicago in 1906, it has 14 offices in the US and Europe.

UPDATE

Online sources have obtained further details about the salary reductions for Sonnenschein associates — the longer a lawyer has been with the firm, the more their pay will be cut.

If an associate started in 2004 or earlier, the pay cut is 15%. Those who started in 2005/6 take a 14% cut. And the 2008 class is taking a 10% cut.

Skadden Freezes Salaries for Counsel

Erik Even — Thu, 30 Apr 2009 22:51:59 +0000

New York’s Skadden has announced it will not raise salaries for counsel in 2009. Associates will not be affected.

The firm still intends to offer discretionary, merit-based bonuses.

Skadden is offering all its associates, about 1,300 worldwide, the option of taking one-third of their base pay not to work for a year.

The firm in March laid off an undisclosed number of staff attorneys and 50 support staffers. It has also launched a litigation program for its deferred incoming associates.

Skadden, Arps, Slate, Meagher & Flom LLP, founded in 1948, is a prominent law firm based in New York City. With over 2,000 attorneys, it is one of the largest and highest-grossing law firms in the world. Forbes magazine called Skadden “Wall Street’s most powerful law firm.”

Linklaters Cuts Pay for Incoming Associates

Erik Even — Thu, 30 Apr 2009 16:27:36 +0000

Linklaters is cutting pay for starting lawyers, and shrinking salary increases. The firm will pay new lawyers £61,500 ($91,300), down from £66,600 pounds in 2008.

Associates will get salary increases of two to four percent based on seniority, down from six to 10%.

Linklaters is freezing pay for non-lawyer staffers.

Lawyers and staff may qualify for merit-based bonuses, and will get £1,500 profit-related awards.

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

Chadbourne & Parke Cuts Associate Salaries

Erik Even — Thu, 23 Apr 2009 21:06:01 +0000

Chadbourne & Parke, which laid off 25 lawyers last month, has informed its attorneys and staff that salaries will be reduced starting in May.

Details and numbers have not been released.

The firm promises bonuses to make up part or all of the salary cut, based on an employee’s “financial performance and individual effort and contribution.”

In other words, if you make less this year, it’s your own fault and not the firms’.

New York’s Chadbourne & Parke LLP, founded in 1902 by Thomas L. Chadbourne, employs 400 lawyers and tax advisors in 13 offices in nine countries. Chadbourne is probably best known for its global practice in project finance and energy, international insurance and reinsurance practice, multi-jurisdictional litigation in courts from Rhode Island to Russia, and corporate transactions.

Simmons & Simmons Freezing Associate Pay

Erik Even — Sat, 14 Mar 2009 18:02:48 +0000

London’ Simmons & Simmons is freezing associate pay starting May 1st.

The firm is creating a special bonus pool to reward top performers.

The City firm has not yet decided how to handle pay for incoming associates.

Simmons & Simmons is a leading international law firm with over 2,000 employees, and 20 offices located throughout Europe, the Middle East and Asia.

Morgan Lewis Adopts Merit-Based Bonuses

Erik Even — Thu, 08 Jan 2009 18:25:17 +0000

Philadelphia’s Morgan Lewis & Bockius will adopt a merit-based bonus system for associates in 2009.

The firm is doing away with its requirement that associates log 2,000 billable hours in order to receive a bonus, as well as any promises that reaching that mark will ensure a bonus.

We still expect that an associate meeting our expectations will be sufficiently engaged that he or she will have 2,000 billable hours annually (including pro bono hours), and we will give substantial weight to the level of engagement in awarding bonuses. However, having at least or fewer than that number of billable hours in any fiscal year will neither guarantee nor preclude a bonus…

In deciding on bonuses, we will look at the entire picture of an associate’s contribution, including level of engagement, efficiency and value in serving clients, excellence, results achieved, contribution to our culture, participation in our programs, and other factors.

In other words, they’ll give bonuses to whomever they want; and undoubtedly not as many.

The new bonus structure took effect with the start of the 2009 fiscal year on October 1st, 2008, and the change will not affect 2008 bonuses, which the firm has yet to announce.

Latham & Watkins Freezes Salaries at 2008 Levels [Update]

Erik Even — Wed, 17 Dec 2008 22:51:39 +0000

Los Angeles-based Latham & Watkins is freezing 2009 salaries at 2008 levels.

While we anticipate that the diversity of our practices and global reach will serve us well in the year to come, it seems clear that the global economy will continue to be challenged at least through 2009. As a result, we are modifying associate compensation as part of a prudent business strategy. Effective January 1, 2009, associates moving to the next class year will continue to receive the same base compensation as they received in 2008. …

We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool. As in previous years, we will announce bonuses in late January.

Above the Law notes that, unlike other firms, Latham does not promise to reexamine the salary situation in Q1. Latham associates can probably expect a pretty lousy 2009.

Happy New Year, Latham & Watkins!

UPDATE:

Law.com suggests that the Latham salary freeze may start a trend:

“Everybody’s been waiting for some kind of signal from the market leader,” said consultant Peter Zeughauser, founder of The Zeughauser Group. “This will be a profound signal to the market about what to do.”