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Are Spring Bonuses a Waste of Money? There’s Little Impact on Loyalty, Survey Suggests

Posted Sep 1, 2011 9:37 AM CDT
By Debra Cassens Weiss

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More than 40 law firms gave out spring bonuses to associates this year after Sullivan & Cromwell set the standard with a decision in January to pay between $2,500 and $20,000. Did they make a cost-effective decision?

Probably not, an American Lawyer analysis suggests. Law firms jumped on the bandwagon, despite varying levels of profitability, the story says. Two fears were likely at play: the fear of being unable to attract the best and brightest, and the fear that top associates will jump to higher paying firms.

But an American Lawyer survey of midlevel associates survey found no evidence that these bonuses buy loyalty. “Data from two years of surveys of midlevel associates suggests that these bonuses have minimal impact on associates' morale or their willingness to stay at a firm,” the story says. “The extra paydays don't even guarantee that associates will be more satisfied with their compensation. Instead, these me-too bonuses have more swagger than purpose.”

The story explains the evidence: The survey found no statistically significant relationship between associates' favorable rating of their compensation and their expectation that they will still be at their firm in two years.

The correlation between spring bonuses and how associates rate their compensation is also tenuous, the story says. Associates at Sullivan, for example, gave lower marks to their firm for compensation than two firms that didn’t award spring bonuses.

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