'Lowball' Bonuses at Some BigLaw Firms?
‘Tis the season for associates at major law firms to receive hefty year-end bonuses. But the BigLaw largesse is more generous at some law firms than others, and a number of associates receiving lesser amounts are not jumping for joy.
At least two firms, DLA Piper and McDermott, Will & Emery, have been straightforward about not matching the lockstep bonuses being paid this year by market leader Cravath, Swaine & Moore, which start at a total of $35,000 (prorated) for the class of 2007 and top out at a total of $110,000 for the classes of 2000 and 2001, reports Above the Law, based on information from associates there. McDermott reportedly will pay about $5,000 to senior associates who bill at least 2,000 hours annually, and DLA Piper, we are told, has unofficially promised to pay bonuses at the same level as last year.
But “numerous associates” at other firms, writes blogger David Lat, have complained that their firms “are using vague bonus policies to lowball them on bonuses. While we understand why these associates are upset, we can’t say we’re surprised. The whole point of a bonus policy that contains an element of discretion is the ability to pay some associates less than others—for whatever reason, justified or not.”
As he and others have pointed out—and an earlier ABAJournal.com post discusses–paying associates top lockstep bonuses, while a badge of law firm prestige, may not do much for the bottom line.
“Lawyers are smart, but this herd mentality seems absolutely irrational, economically speaking—and not because the compensation is too high. The top law firms have been stuck in copycat mode for years,” writes the New York Times in a Dealbook article earlier this month. “As soon as one of them raises salaries for associates, the others fall in line almost immediately.”
Says Lat: “To be perfectly (and brutally) honest, does it make sense for firms with profits per partner that are a fraction of Cravath’s to pay bonuses at Cravath levels? Of course associates want bigger bonuses. But they also want jobs.”
