Associate Bonus Watch: McKee Nelson Matches Announces
The firm of McKee Nelson -- which has been having some issues, thanks to the credit crunch, but is making valiant efforts to deal with them -- just announced its standard bonus scale. It is availing itself of the fig leaf provided by Cravath's bifurcated bonus scheme: it's not paying "special" bonuses, just regular year-end bonuses.
As explained in the memo:
[A]n individual associate's bonus will be determined by the quality of such associate's work, his or her overall contribution to the Firm, and the number of billable hours worked. [B]ased on these factors certain associates will receive more than, and others less than, the standard scale for their class.
Full memo from Bill Will Nelson, after the jump.
From: William Nelson
To: Associates ALL
Cc: Partners ALL
Sent: Mon Nov 05 13:40:11 2007
Subject: 2007 Associate Bonuses
We are pleased to announce the 2007 standard bonus scale for associates at the amounts set forth below. The bonus scale is pro rated for those who joined the Firm after January 1, 2007.
Class of 2007-$30,000
Class of 2006-$35,000
Class of 2005-$40,000
Class of 2004-$45,000
Class of 2003-$50,000
Class of 2002-$55,000
Class of 2001 and above-$65,000
Consistent with our policy, an individual associate's bonus will be determined by the quality of such associate's work, his or her overall contribution to the Firm, and the number of billable hours worked. As was the case last year, we expect that based on these factors certain associates will receive more than, and others less than, the standard scale for their class. Bonuses will paid on December 21st to attorneys employed by the Firm on such date.
For capital markets attorneys who participate in the voluntary program and pursue other options prior to December 7th, the Firm will pay those attorneys the standard bonus set forth above for their class on the date of departure from the Firm because the associate evaluation process will not have been completed by such date.
We appreciate your hard work and dedication the Firm and our clients. Thank you.
(136) Comments
first!
First!
first!
I am assuming firms "pro-rate" by simply giving you 1/12 of the bonus for each month you've worked?
442 is too dumb to live.
BOOOOOOOOOOOOOOOOOOOOOO!
First, I work at MN.
Second, I'm happy to see that the partners sent out an announcement with typos. Very classy.
Third, this whole "voluntary" crap has gone far enough. The smart ones are figuring out other options while the slackers and idiots are sitting on their thumbs. Morale is in the tank.
Fourth, if I had a nickel for every time Will Nelson said "We'll never lose anyone over money!", I'd be rich. I guess that is no longer true.
They probably pro-rate based on weeks or days, rather than months. Lawyers are bad at math, but they employ people who aren't.
422 is too dumb to live
BOOOOOOOOOOOOOOOOOOOOOO!
First, I work at MN.
Second, I'm happy to see that the partners sent out an announcement with typos. Very classy.
Third, this whole "voluntary" crap has gone far enough. The smart ones are figuring out other options while the slackers and idiots are sitting on their thumbs. Morale is in the tank.
Fourth, if I had a nickel for every time Will Nelson said "We'll never lose anyone over money!", I'd be rich. I guess that is no longer true.
Did 4:27 just call somebody out IN THE FUTURE?!!?
Why are they announcing so early if aren't matching the "special bonuses"?
This will only bring more attention to them as the first to break from the market.
If they weren't planning on matching, they should have waited until December to assuage associates that at least they'd be getting the money soon.
Terrible planning. It's one thing that they can't afford to pay, it's another as to how they handle the situation.
422 is too dumb to live
mckee nelson
job - possibly
market job - NOT!
omigod, mckee nelson is such a piece-o-shit law firm. reading between the lines, our practice can't weather the storm and we can't afford to hire or retain the best lawyers.
Sheesh...don't dare be 442: you'll be TOO STUPID TO LIVE!!!
This is a terrible precedent.
at least two (2) typos -- disgraceful
DURRRR
crap, I'm too stupid to live!
Uh oh. I hope that this does not become the established norm for the rest of the firms to follow.
Boooo!
This firm's obviously hurting - if anyone else follows suit, it will clearly be because they are hurting too.
So much for that AMLAW number 1 place to work ranking. The firm's vault profile is kind of laughable now.
(1) Anyone have any reports about bonuses at other firms w/ substantial Structured Finance practices?
(2) Who the hell is this "too stupid to live" retard?
only see one typo...
me too. i onbly sea one tipo as welll.
It was just a short time ago they were boasting above market pay and high associate satisfaction. So much for that. I feel sorry for McKee associates and McKee recruiters going forward.
As a non-NY associate who expects a sucky bonus, HA!
One reason to release this information early may be to keep other firms from raising -- think about it.
One reason to release this information early may be to keep other firms from raising -- think about it.
Wow - they are pretty bold; taking one for the team. Let's not kid ourselves - many V100 firms are thinking about this and feeling the same way; now that MN has done it, it will set a precedent for others to follow.
And face it, once a few more V100 firms do it (which I am absolutely sure there will be), this will be a new standard. As it is, the bonus has traditionally been given differently at firms (even though the base salaries are the same).
Lat, please shut this site down. This is too demoralizing even for the associates at the v-10 firms.
It's not well-written, but I still only see one actual typo. That is, unless you're counting the omission of the special bonus as a typo, in which case this thingg are fulled ov tipos.
4:58 - V100 is actually a real thing. It stands for Vault 100 and is a list of 100 firms created by Vault Inc. If you look at the list you might notice that the firm McKee Nelson is absent. It is not a V100 firm, it is a "Best of the Rest".
SKKKAAAAADDDDEENNNNNNNNNNNN????????????????????????
2 typos -- look again. Hint: each is an omission of a word.
this is crap. Where does MN stand on the V100 list? Crappy firm.
this is crap. Where does MN stand on the V100 list? Crappy firm.
Looks like a friendly guy
http://www.mckeenelson.com/attorneys/attorney.cfm?id=48&CFID=9892370&CFTOKEN=4fefb20e6c33c749-FFCE80D4-1422-11F2-0A1D5900D638B483
this is just the wrong direction whether v100 or not. mn tries to play with the big boys. its just bad precedent.
Uh oh, looks like 4:27 needs a hug! :)
For you retards, here're the typos:
"We [do not] appreciate your hard work and dedication [to] the Firm and our clients."
S&C matched, more or less
S&C matched the bonuses, with Senior Associates still getting their portion of a previously announded Supplemental Bonus Plan. Thus, S&C senior associates are still above Cravath, etc.
bonuses will [be] paid
they basically admit they are firing half of their attorneys in the email. this is a crap shop that pedals tax shelter and mortgage backed garbage, and any firm that hangs its hat on this announcement is equally crap.
for the 5:16 retard, that is ONE typo. the first is your added color, not a typo.
What's "the voluntary program"?
Announcing now and not paying a "special bonus" is the perfect move. This gives associates a reason to leave the firm and move to another one who pays at the top of the market. Valuable associates will get paid above the scale and will stay. Those getting less will leave which does exactly what Will and Bill want - McKee not firing anyone and thinning the ranks of average associates. Brilliant.
5:20 is too smart to live.
5:20 -- You are a genius!
it will be brilliant until work picks up in a year or two and are unable to get quality laterals.
No White & Case? Losers.
5:20(2), you is too smart to live.
mckee goes on the list of shame for the next decade. who would want to work at that crapshack anyway? who is dying to get into changing names on REMIC docs and mortgage servicing agreements? I'd rather have someone with superaids pee in my eye socket.
I agree. Being a cheap and telling everyone about it is a brilliant move. I'm sure no associates at other firms will remember that about this firm when the lateral market heats up again.
it is indeed brilliant for the very short term. BUT there will be consequences.
To stupid to live? But I'm also too handsome to die!
you'd be surprised how much folks remember (unless they are desperate for the job). latham is still dusting off the bad rep it got for its layoffs from the early 1990s and shearman from early 2000s. paying lower than market bonuses of course will sting less then laying off folks, but folks with options that do their diligence consider these items.
5:26
In answer to your question, there are many, many good law students (yes, not top 10% of Harvard) who would love to earn the $160K that McKee pays.
5:18(2) Go back to school and learn how to use the words "pedal" and "peddle" correctly before posting anything else on here.
5:34, issue is that if you have options, you will consider total comp. and not just the base salary.
5:35 stop being an assclown.
What's up with this? http://mckeenelson.com/newsandevents/news.cfm?id=174
5:35 - what question? To answer your question, yes, you can toss my salad.
5:42
You couldn't afford my hourly rate. That salad would be too expensive.
5:26(2) You sound like a real toughguy.
I am tough, but my asshole is delicate, so be gentle.
You guys need to remember that not everyone is top 50% at HYSCCN. NY Biglaw (broadly defined as any firm currently paying $160k) hires probably 10,000 first years annually - there are plenty of students waiting to take up these jobs, whether or not the "Cravath bonus" is matched.
WHILE you're tossing it.
that's where the quality issue comes in my friend.
Wachtell just announced it has hired all McKee Nelson associates as paralegals; no word on whether the MN partners have offers
bottom 50% at HYSCCN obviously doesn't read this site, so who cares.
caaaan you feeeel the looove toniiiight?
y'all are awesome. I love you guys!
xoxo
Re: "Valuable associates will get paid above the scale and will stay."
You'd have to be a complete "slacker" and/or "idiot" to stay at MN. The MN worker at 4:30 speaks the truth.
5:55 "I am tough" LOL
I am tough I am tough yeah, I am tough
"NY Biglaw (broadly defined as any firm currently paying $160k) hires probably 10,000 first years annually"
Considering less than 10,000 people pass the NY bar each year this would be pretty impressive.
What do we think King & Spalding will do????????
5:56, your math is off.
Nationwide, roughly 8,000 new graduates start at firms with over 100 lawyers every year. That's about 20% of all new grads. Go back and read some of the articles Lat posted when he did that little stint of posts where he pretended to care about people who went to lower tier schools.
New York biglaw alone does not hire 10,000 people per year.
Admittedly, that only proves your point, that even the lesser biglaw jobs are hard to come by and there are plenty of other people who would be willing to take those positions. But we're all about being pedantic here, so it was well worth the effort to correct your numbers.
6:13
Point taken. I stand corrected. But as you say, that supports my point even further - any NY Biglaw job is valuable.
So only 1 matching firm today, huh? Doesn't look good ...
Hi Zoe!
mckee nelson is the christmas critters of law firms. they will rape your eye socket and pee in it with superaids and then whup strawberry shortcakes tender ass before cutting your bonus and giving you a staph infection. they suck unwashed donkey balls.
ohh, that was graphic. i am cringing under my desk.
NYC Bonus List of Shame
2008 Vault Rank / Firm / 2005 RPL (if known)
1
2
3 Sullivan & Cromwell LLP / $1,627,000
4 Skadden, Arps, Slate, Meagher & Flom / $997,000
5
6
7
8 Latham & Watkins LLP / $875,000
9 Weil, Gotshal & Manges LLP / $954,000
10 Covington & Burling LLP / $774,000
* 11 Kirkland & Ellis LLP / $987,000 (Punted)
12
13
14
15 Wilmer Cutler / 846,000
16 Williams & Connolly LLP /
17 Sidley Austin LLP / $774,000
18 Gibson, Dunn & Crutcher LLP / $1,011,000
19 O'Melveny & Myers LLP / $828,000
20 White & Case LLP / $600,000
21 Arnold & Porter LLP / $816,000
22 Jones Day / 602,000
23 Morrison & Foerster LLP / $735,000
24
25 Clifford Chance LLP /
26 Cadwalader, Wickersham & Taft / $940,000
27 Hogan & Hartson LLP / $735,000
28 Mayer, Brown, Rowe & Maw LLP / $750,000
29 Fried, Frank, / $891,000
30 Ropes & Gray LLP / 841,000
31 Paul, Hastings, Janofsky & Walker / $766,000
32
33 Akin Gump Strauss Hauer & Feld LLP / $779,000
34 Winston & Strawn LLP / $718,000
35
36 Wilson Sonsini Goodrich & Rosati / $752,000
37 Linklaters /
38 Orrick, Herrington & Sutcliffe / 767,000
39 Freshfields Bruckhaus Deringer LLP /
40 Proskauer Rose LLP / $745,000
...
...
55. (Cahill Matched)
NR. McKee Nelson (Failed to Match)
6:31 - if you read the comments you would see that S&C matched (and is still paying above market for senior associates).
I don't know why Lat hasn't posted the memo that was circulated by EMAIL 2 hours ago!
I'm in a non-capital markets practice at McKee Nelson, and I'm really pissed that the firm isn't going to be paying market bonuses. When I lateralled over, I was repeatedly told that the firm pays bonuses on par with Cravath, Sullivan & Cromwell, and Skadden. Plus, all of the associates were told 3 weeks ago in the "personnel reconfiguration" meeting--only 3 weeks ago!--by Will Nelson that McKee Nelson would continue to pay market bonuses. What bullshit.
MN isn't so bad. They're still paying a good bonus and in DC that'll be a really good bonus (especially since you they ain't hitting 2500 hours this year).
As a MN associate as well, that last point is what annoys me the most about this whole situation. Not only did they say that bonuses would continue as usual (always at or above market) two weeks ago, but we have all heard the "we won't ever lose associates over money" speech on multiple occasions. It's easy to say that when the partners are making money hand over fist, and it's enfuriating to see how quickly the policy changes as soon as times get tough...
In the end, they are showing that they want to trim down numbers, no more, no less - specifically who they lose (good or bad associates) is only a secondary concern.
It's all very sad.
In response to 6:52, my pace for the year is 2300 hours and I'm in NY. The below-market bonus that was announced is NOT a really good bonus in NY.
Ditto...
i heard that the partnrs r just taking a waitandsee approach, and won't announce the special bonuses til later, after the initial round of associates take this bait to leave
Why don't they just pay all of their money to whining, severely underworked associates and then have no money for attracting and retaining revenue-generating partners?
1. MN will pay above-standard bonuses to performing and well-liked associates.
2. MN will pay below-standard bonuses to non-performing associates.
3. The real question is whether they are going to be laying people off if no one "takes the bait".
6:46 and 6:53 should remember that MN never made any promises regarding bonuses. "...intend to pay market bonuses this year" is different than "...promise to pay you market bonus." Anyone who thinks MN isn't doing (and will do) everything it can for us honestly needs to get his head checked.
seeing as how will nelson already reneged on the "at or above market bonus" promise from 2 weeks ago, i'd bet that he reneges on the "no layoffs" promise too. what a TTT firm.
7:12-what flavor is the kool-aid?
7:12 - that's great for the capital markets folks, but you're missing the boat on the other teams that are not receiving a "market bonus" this year despite carrying the firm.
"certain associates will receive more"
it's pretty obvious that this includes ny litigators
MN is not an amlaw or vault 100 firm solely based on size. But profits per partner, revenues per lawyer have been top ten for the past few years. These guys have made alot of money riding a good market. I guess they're saying they can no longer play with the big boys.
There is just no good reason all law firms should pay the same. I'm at a firm similarly situated to McKee and I expect we will follow their lead. I COULD have studied harder and gone to Cravath. Boo hoo. I guess I'll just have to settle for a 50,000 bonus in a shit year. Oh, wait - that's AWESOME.
RE: 6:13
Mmmm....shallow and pedantic.
7:28, that's not the point. Many of us -- myself included -- were at, or could have taken, jobs at v10 firms but chose MN because of the work, atmosphere and money, not necessarily in that order. I can't speak for other similarly-situated MN folks, but I would have made a different decision altogether if I thought MN wouldn't pay v10 rates going forward. I will endeavor to be more prescient in making my next move.
Man, it's like half the MN associates are on this board. Nobody that's actually from any of the other firms ever outs themselves.
Good luck with the lat moves, guys.
I am at a firm that has lost a decent slice of people (associates, of counsel, partners) to MN over the last 5 years, and this is really something to see. I wonder if we'll be getting our deserters back.
Rumor that Quinn Emmanuel announced with half of special bonus to be paid over the summer. Memo?
What is the voluntary program? Sorry for the ignorance.
are they cutting capital markets partners? with so many capital markets partners (all of whom have to be highly paid or they never would have moved to MN), how can the firm afford to pay the partners and still pay bonuses?
Yeah - best of luck to the MN associates out here in full force today.
I'm at MN too, and I'm pissed. I have worked my ass off expecting a phat bonus, now I'm getting this?
What a fickle bunch. It was hardly a week ago that MN received praise from this board by coming clean with their associates on their cap markets slowdown. Now the decision to pay a sliding scale bonus to is pilloried? What did you expect for a firm that doesn't have a very diverse group of practice areas? When the credit markets are full-steam-ahead again by this time next year, the naysayers will regret their decision to jump ship on the firm.
Did QE match?
I'm guessing they don't mind if their below market bonuses cause lawyers to go elsewhere (since they've already asked people to leave voluntarily), but I wonder how this will affect their recruiting in the near future. If I were a law student I would think twice about going somewhere that (1) has little work due to market conditions (and heavy investment in one market segment), (2) is asking people to leave and (3) is paying below market bonuses.
9:14, I guess it would have been wise for them to wait until the December deadline when the 2008 summer associates have to accept/decline the last of their open offers. That way they'd be stuck, no matter how crappy the bonus.
7:44 - and good riddance. If the firm is interchangeable for you, and one 10-20 grand payment makes you want to change jobs, then you're exactly the person we don't want to stay around.
We need a Chicago bonus thread. The bonus structure in Chicago is opaque and tied entirely to hours. A lot of firms are cheap as hell, but potential summers and laterals have no way of knowing.
7:44--"but I would have made a different decision altogether if I thought MN wouldn't pay v10 rates going forward"
how do you know what anyone is going to pay "going forward" in NY?
9:49--you're right on. See ya, 7:44. Go "endeavor" to get your own clients and try pulling in that 12 grand for yourself (or go leach off of a different firm). Give McKee Nelson a break.
McKee Nelson Associates = Suckers
I love wgwag!
I think people are missing the point of this bonus announcement. McKee does not normally announce bonuses - everyone just finds out how much they get paid when they do in fact get paid. If McKee wanted to quietly pay low bonuses this year, it could just individually pay low bonuses. If it wanted a good AboveTheLaw spin, it could just announce higher bonuses and pay them out to fewer people (excluding those who didn't meet an hours requirement). Bonus announcements generally don't mean anything for non-lockstep firms, because there is no transparency (this is, incidentally, why AtL is doing us a disservice by announcing that Quinn matched, when who knows what a given Quinn associate will get). So there is no PR benefit to McKee publicly announcing its first sub-NY-market bonus year in the past several years.
There is one very obvious benefit, though - severance pay for all those idle securitization associates. This memo basically says tactfully that you'll get cash to walk now, but if you can't find another job by December 7, you'll get a lower bonus (or no bonus) due to not having billed much of anything. McKee presumably figured that setting severance pay at NY market would be unnecessarily expensive.
As for the rest of the McKee associate pool (e.g. busy tax associates in DC, busy litigators in NYC), it seems equally obvious that McKee cannot afford to alienate those associates and lose them to other firms, since they are now McKee's main source of revenue. So busy associates will presumably at least make NY market, and will get above-class-year bonuses under the scheme announced above.
All in all, this seems fairly deft. There might be some minor hit to summer associate recruiting or something, but much less than if McKee had to lay off securitization people.
12:34 - this all makes sense, but as a previous poster mentioned, aren't the star associates more likely to jump ship? So McKee takes less of a reputation hit by not laying off, but they lose control on who they try to keep and get rid of.
12:54 - McKee will just do what it always does - pay good bonuses (i.e., not just the low bonuses listed above) to the people it wants to keep, which I imagine will be a pretty long list outside of securitization this year.
Keep in mind that the majority of McKee associates are in securitization, so creating a general lowball policy targeted at securitization and then deviating from it to accommodate other departments makes sense.
12:34 - you raise some interesting points, although some of your facts and reasoning are slightly off, in my opinion.
1 - this is not the first time MN announces bonuses in such a way (e.g., last year, although this is obviously much earlier). They have always been proud of their top pay (until now) and were never shy about their "we won't lose anyone over money" policy - for what it's worth, they're at least continuing to be open despite hard times. Clearly, they had nothing to gain by being underhanded the way you suggest they could have been.
2 - although this bonus program is clearly a disguised severance package (it isn't being called that - nothing these days is being called by its name), MN partners might consider being more communicative with its associates, both those it wants to keep and those it wants to get rid of. If the intention is to pay truly higher bonuses to some associates, while keeping the bar low for those seeking to leave, it might be worth discussing it with those valued associates. The longer they wait, the higher the likelihood that good people will leave.
3 - While MN cannot afford to alienate the tax/biz lit associates, it can't really afford to alienate the structured finance associates either, even though they're currently going through hard times. They're still the largest group in the firm and will continue to be in the future... While the situation is dire today, MN partners weren't complaining about structure finance associates when they were working 250+ hour months from Jan - July. Incidentally, the same structured finance associates were told that their numbers for Jan-July of '07 matched full-year numbers for '06. Not too shabby...
This is a really sad situation all-round. Things are in the works - MN IS GOING TO LOSE GOOD PEOPLE. Good people are sending out resumes, meeting with headhunters, going on interviews, and they will leave the firm. In the end, the partners will get their staff cuts, but who will they be left with?
MN always announces bonuses in a firmwide email, so 12:34, your description is inaccurate.
People hear what they want to hear. At or above-market bonuses were never promised at the "state of the union" meeting. They said the "bonus program would continue as usual". MN has never been shy about paying people they value very well, but they've also never been shy about trimming the fat. Capital markets associates who are valued and who the firm wants to retain, as well as associates outside of the capital markets group, will receive bonuses in excess of the standard schedule. Those who are less valued may receive less than the standard scale. The securitization market is in the toilet - the firm needs to cut back, WTF did people expect? Read between the lines - if you do sub-par work, get out now and you'll get your full bonus.
Grow up and stop taking things personally. I'm old enough that I've been through market downturns before - it's not personal, it's business, and MN is handling this situation with a lot more class than other places I've been during rough times.
Yes, it's sad and yes, the firm will lose some good people that it would rather keep on board, but that's just life - the markets are cyclical - you can't expect things to always be rosy and to always receive more pay than everybody else.
I would guess that the securitization group in DC will trim down a bit, but nothing like this board is predicting. NY office is different as there are still auto deals and other assets to securitize, but those associates have more options in the NY area. Unless the DC associates are willing to move, don't look for a mass exit just because they don't get a "special bonus." People always talk about trading hours for cash, now that it is happening, people inside and outside McKee are complaining. The valued associates know who they are and the core of the group will remain.
Finally, if I see one more e-mail from a tax lit person bitching about their bonus I'll scream. I highly doubt that they spend nearly as much time in the office as the structured finance group does and spend most of the time preparing for cases that never see the light of day. While I appreciate their enthusiasm, I wish they could have worked in a top structured finance group for the last three years (prior to June), missing holidays, spending nights on the floor, and dealing with transactions that take weeks, not years, to finish. Then I would take them seriously.
To McKee Nelson Partner-Posters: I understand the need to trim down the capital markets associate ranks. Frankly, if I were a partner and not an associate, I would vote to do the same. But please, cut the shit, do layoffs, pay some severance, and deal with the bad PR. The "voluntary" spin on this whole thing really gets on my nerves. Thank you, MN Associate
If you don't take a job they are trying to give you, and you end up walking, you shouldn't get a severence.
6:51, what are you talking about? Unless someone forgot to communicate a job offer to me, they did not try to give me a job. And I also doubt they'll let me keep my current job.
You all are crying about a $65K bonus??? Support staff is getting screwed over royally too! A lot of us are barely making $65K and we've been threatened with no bonus at all, and IF we get one it will be after the first of the year and a fraction of what we're used to getting. Take your $65K and shut the hell up!
The bonus structure they've announced is nothing to sneeze at, but the whole "voluntary program" statement screams "layoffs" to me. If I were a MN associate or staff member even, I think I'd be a bit disgruntled at the prospect of losing my job. Given the state of the securitization market at all firms, layoffs seem inevitable in a firm that's only 7 or 8 years old and devotes a good portion of its practice to securitizations. Given that most of the firm's income for those 7 or 8 years came from that practice group, at least that is what my limited internet information revealed, the firm's really hurting. And no tax associate is ever going to bring in the revenue that a finance associate brings in. Tax is an income stabilizing group, not generally a firm's profit center. At least MN has a tax group. If it didn't, it would be hurting even more.
Just think of it this way, $65K is probably a lot more than you'd get in severance if they just laid you off. And be glad you didn't take that job at Morgan Stanley or Bank of America.