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Santa or Scrooge: How Do BigLaw Firms Determine Associate Bonuses?

Dec 5, 2011, 09:30 am CDT

Comments

Is it a bonus or a ‘gift’?  To me a bonus is a reward for exceeding one’s goal, whatever that may be at the firm.  If the associate has not exceeded his/her goal, how can they merit a ‘bonus’?  The problem is we have created an atmosphere of ‘entitlement’ reflected in the abuses of Wall Street.  People expect they should receive a bonus simply “because”.  When did we get off the track?  When do we make people accountable for their efforts or lack thereof?  Ridiculously high salaries for people who are still dripping wet behind the ears, and ‘bonuses’ are added on top?  Our value system is totally out of whack in this country; hence, the “Occupy” movement.  And our profession wonders why we have an image problem?

By The Jet on 2011 12 09, 9:14 am CDT

It’s interesting that he talked about this appearance that law firms are sticking with the lock-step compensation system.  In Atlanta, it seems that several large firms are moving away from lock-step to merit-based, subjective compensation structures.  However, often times, that merit system is based strictly on hours, not performance (although to some if you’re not putting in the hours, you aren’t performing).  For example, if your salary $150,000, they might pay you $125,000 throughout the year and only give you the additional $25,000 if you bill a certain number of hours.  I wonder if this trend will continue in the smaller markets or will it make its way to New York.

By Anon Atl Atty on 2011 12 09, 10:15 am CDT

@ The Jet:
I agree that the salaries and bonuses are ridiculously high for such inexperienced attorneys.  But regarding your statement about bonuses, the bonuses ARE given for exceeding the goals; generally, the goal is a set number of billable hours and if they exceed this number they get the baseline bonus.  If they exceed the number by an even larger amount, the bonus is bigger.

By Tiffany on 2011 12 09, 10:30 am CDT

The firms don’t talk to their clients about bonuses, because they don’t want them to know too much about the process.  When I was an associate at a BigLaw firm, there was a bonus system for exceeding billable hour targets.  Some associates got huge payouts by billing 2,500 - 2,700 hours, and became rising stars in the process.  The system created an incentive to overbill (pad) the hours, and was unfair to those associates who billed realistically and/or who worked for clients who wouldn’t pay for those hours.  We were told in no uncertain terms that we should not discuss the system with clients.

By In-House Lawyer on 2011 12 09, 12:06 pm CDT

As General Counsel of a bank I am a client of several law firms.  I don’t care what associates get paid or how big their bonuses are.  If I believe I have been over billed I will talk with my primary contact at the firm.  If I believe I have been overcharged a second time the firm looses my business.  I look at the total bill and the value of the legal work.  A higher hourly rate is fine if you are efficient.  If an associate bills for unproductive time the firm has to discount the rate or not bill all the time spent.

Don’t think that your clients won’t react when a bill is higher than it should be.  You may never know about the new matter that went to your competitor insted of you.  Some firms that used to do work for me don’t.

By sgerardin on 2011 12 09, 4:14 pm CDT

Big bonuses are nice when you can get them, but for those of us in small towns, they don’t really exist, especially if you’re support staff and not an attorney.  I’ve been a paralegal in the same criminal defense firm for about twelve years now.  Last year, the “bonus” was fifty dollars.  I shouldn’t complain, though.  A few years ago, the attorney for whom I work went around on December 24 giving out coupons good for a free sundae at Dairy Queen.  That was the bonus. 

Why do I put up with it?  I’m in my 60s, and the age ceiling is still solid if you aren’t in a large metropolitan area.  I’m retiring this next spring and won’t have to worry about it. 

When you compute bonuses, keep your support staff in mind.  If you think it’s tough living on a couple hundred thousand a year, try to get by on 25 to 30K.

By Eliyahu on 2011 12 10, 10:57 am CDT

What in the devil is this word “BONUS?” I have never heard of or seen such a thing.

By Faulhaber on 2011 12 10, 7:49 pm CDT

The money came from the clients——return the money to them.

By Shark on 2011 12 12, 5:00 pm CDT

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