Summary: Midsize and midmarket law firms are refraining from joining in on the end-of-year bonus competition between Big Law and large boutiques.
The law firms everyone expects are rolling out their 2016 bonus rates. The typical firms you expected to stay far away from the hype are. It should come as no surprise that midmarket and midsize law firms are not attempting to provide their associates with bonuses matching those set by Cravath and now outdone by a select few firms.
One such firm is Saul Ewing. Managing partner Barry Levin commented, “It sometimes comes across as a bit of an arms race. We pay attention but we don’t let it drive us.”
Firms outside of the “top tier” are not going to be financially capable of keeping up with those like Cravath, Dechert and Morgan Lewis that have different business plans affecting different rate structures.
Many firms have to sit and take a calculated approach to setting up their salary and bonus rates. Levin added, “You will rarely see us coming out in a day or two or a week or two [of other firms’ announcements] with a new bonus structure. We tend to be very thoughtful in our approach.” Before the big rush earlier this year of law firms raising their associate salaries, Saul Ewing had just raised theirs to $145,000. They stayed their when everyone else was bumping theirs up to match Cravath.
Managing partner of Hangley Aronchick Segal Pudlin & Schiller, David Pudlin, explained, “We do not feel the need to be at the top of the range given that we, as a smaller firm, offer other nonfinancial benefits, such as greater certainty and a shorter path for becoming a partner.”
Other midsize firms are still considering their options. Eckert Seamans Cherin & Mellot CEO Timothy Ryan noted that his firm is still deliberating over what to do about associate compensation. He said, “The salary run-up and the bonus run-up we’re again seeing is on our radar screen. We don’t ignore what other firms are doing … but we don’t in any way to keep pace.”
He does not feel his firm or others like theirs need to worry about keeping up because they offer other benefits. “I think that we have become very, very adept, very good at retaining our associate talent by giving them great opportunities for real experience,” Ryan said. “The quality of life and how they’re treated … is often an important factor in their decision to stay.”
Is money or benefits more important to associates? Tell us your opinion in the comments below.
To learn more about the bonus announcements, read these articles:
- Boutiques Join In On Bonus Season
- Two Law Firms Step Forward to Up the Bonus Scale
- Law Firms Across the Globe Match Cravath Bonuses
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