Associate Bonus Watch: Some Fried Frank Follow-Up
When we posted the Fried Frank bonus memo last month, we noted that "whether this is a true market match is unclear, since the firm is a bit vague with respect to what percentage of associates will receive 'special' bonuses." In its memo, the firm said that special bonuses would be paid out "on a discretionary basis based on performance."
What we're now hearing is that Fried Frank has reduced special bonus amounts for a significant number of associates who had low hours relative to their class. The news was conveyed to associates during their year-end reviews.
It's hard to say how many associates had their special bonuses trimmed, but one source tell us that "it appears to be more than just a handful." It may reflect, our tipster suggests, "a new policy of tying bonuses (to a certain extent) to hours."
If Cravath was hoping to use the "special bonus" or bifurcated bonus structure to distinguish itself from other top firms, including firms that pay the same $160,000 starting salary, perhaps it has succeeded (at least in part). It appears that a number of major New York firms, such as Fried Frank and Cadwalader, will not be paying market-rate special bonuses to all associates on a lockstep basis (i.e., without regard to billable hours or performance).
The same may be true of major West Coast firms, but we'll have to wait and see. Things should become somewhat clearer after the O'Melveny & Myers associates' meeting in New York, which takes place today.
Update: We're advised that some associates didn't get any special bonus at all, but that most did receive some special bonus, just not at the levels set by Cravath. In addition, a few people received larger special bonuses.
Earlier: Associate Bonus Watch: Fried Frank
(37) Comments
ROPES MATCHED!
First! And confirming FF's PR misstatements (esp. in D.C. office).
Ropes confirmed.
" It appears that a number of major New York firms, such as Fried Frank and Cadwalader, will not be paying market-rate special bonuses to all of their associates on a lockstep basis (i.e., without regard to billable hours or performance)."
If major firms like Fried Frank aren't matching Cravath's special bonus, can we still call Cravath's bonus the "market-rate" bonus? That seems odd. Seems better to say Cravath is just above market. And that makes sense: isn't there a sense that Cravath (and Wachtell) are a step above other NYC firms?
Ropes NY or Boston also?
FF's D.C associates were told by a partner, in essence, that the bonus memo related only to FF NY associates--despite the fact that many FFDC associates work on FFNY matters.
rumor from multiple sources is that CWT may not being paying jack shit to a huge number of associates. and by jack shit, I mean no special, no ordinary, no bonus. zilch.
10:03 - Cravath isn't the only firm that paid the full special bonus plus regular bonus lockstep. All of the other top-tier firms (S&C, Simpson, DPW, Cleary et al) in NYC, and a few others with top tier pretentions, paid the full bonus. That is the "market" and firms that pay less or don't pay lockstep are accepting that they are not in the same league and will justifiably be at a disadvantage in recruiting top tier talent. I think we've finally hit total comp numbers where the best and most profitable firms can separate themselves from the pack - a bump in base this spring will cement this development.
Ropes memo plz.
Enough NYC news, we get it. Let's hear what the big CA firms are doing, Boston, and D.C.
Fried Frank pulled out (on my face)!!!
I prefer my franks fried and with mustard.
10:03 is right. You can check the ATL archives for this. Top tiers like Cahill, Cleary, DPW, Simpson, S&C, etc. did a full match. Cravath doesn't pay more than those guys. Only Wachtell is above the top-tier market rate.
NYC to fried franks with mustard.
ropes memo would be pretty helpful to associates at those remaining out of town firms that haven't announced yet.
Did Ropes match only in NY?
When one of my colleagues forwards the memo to Lat you'll see that it is unclear whether Ropes has matched.
It breaks my heart to write this, as I was certain Uncle Ropes would not let us down.
In short, it appears Ropes is paying the "market" special bonus in NY and to certain associates in other offices. But the memo is very slippery. We won't know how much of the special bonus we're paid until it hits our accounts on 12/21.
Linklaters also matched without reservation. where's that list of shame guy to give us a new list of prestige?
10:26, thank god he's gone.
Re: Ropes
I wouldn't be at all upset if Ropes matched NYC full-on but only paid NYC-type special bonuses to top billing associates in Boston/D.C. My guess is that in Boston and D.C. there are more associates than in NYC that put in lackluster numbers. To give someone in Bos/DC a NYC bonus even if they billed 1850, would be an insult to the associates who billed 2200 in those cities.
I will be very interested to see the memo.
10:26 is right - R&G matched special bonus in NYC, and then made a cryptic reference to giving special bonuses to non-NYC associates who make contributions to the firm that are comparable to contributions made by associates at NY-based firms. No idea what that means, but my guess is 2200-2400 hours.
Just wait until the bottom falls out of the market. This system can't be maintained forever.
Seems that FF did pay above the stated amount to certain associates and it's not clear whether it was entirely hours based (if it was, I don't know what the cutoffs were). In general, if you're a great associate, you probably would have had enough work anyway.
10:35: I'm not so sure that assumption is accurate.
@ 10:35 -
There is little reason to think that R&G NY associates bill more than other R&G associates. Our NY office is certainly growing, but our work originates, and deals are run, across all offices.
And frankly, you have your head on backwards. The insult would be pay a NY R&G associate a "special bonus" for 1850 and not to pay it to his/her counterpart in Boston/DC/San Fran billing 2000.
I hope Uncle Ropes does the right thing and comes through. On 12/21 I'll post my final hours and bonus amount.
And that's the way it should be. I'm sorry, but you should NOT get a "retention bonus" as a lawyer, just for sitting at a desk. There are far too many colleagues of mine who just surf the web half the time ... pisses me off to think they'll get a special bonus.
Is Ropes a prestigious firm?
10:58 - Yes.
Can someone please tell me how much pls law associates make at the big firms like Labaton Sucharow, Lieff Cabraser, Phillips & Cohen, & Grant & Eisenhofer? Is the grass any greener over there?
David,
Could you please put up a post with a consolidted list of the firms that have matched Cravath?
I doubt any more firms will be matching them in the true sense of the word (lockstep, no hours target, all offices).
11:07 -- But is Ropes worth interviewing for outside of Boston?
Are Fried Frank attorneys now part of the poors? Gross.
Retention bonuses make sense in a cyclical profession. I'm sure a lot of firms with diversified practices are happy they were paying full bonuses to associates in areas that have been slow in the last few years but may help carry the firm for the next few years.
10:07 - What are your sources re CWT? Do you work there?
11:22 - multiple transactional, non-securitization associates were the source. i wouldn't take it as gospel truth yet, but i think the rumor has legs.
didn't skadden impose extra house reqs for the special too? can someone settle this once and for all?
Kyba Thai to 190!
This is exactly why I chose a lockstep firm.