Most of the chatter about year-end associate bonuses has focused on biglaw. Who cut payment by how much and why? While the answers have remained fairly consistent (thanks to slicing their bonuses in half, $17,500 to $32,300 remains the market standard for first and eight-year associates, respectively), now the focus turns to regional firms. How will they handle cutting costs in the negative economy?
The Compensation Committee at prominent regional firm Epstein Becker & Green has made a decision that will probably be copied at regional firms throughout the company. Because their cash position at the end of 2008 is more limited and clients’ payment to the firm has been less timely than normal, EBG has decided to eliminate employee bonuses for the year. The move to eliminate special bonuses was what they believed to be “a moderate response to what are unprecedented circumstances facing [the] industry.”
In a memo to employees explaining the decision, the firm did highlight their optimism that the new administration and investment in strategic lateral growth would put them in a solid position for 2009.
Although other mid-sized and regional firms may not completely cut out bonuses altogether, it’s very likely since Epstein set the standard early (as in, well they did it so we don’t feel so bad doing it.)