Traditionally every year, the elite Wall Street law firm Cravath Swaine & Moore is the first in the legal industry to come out with its associate bonus schedule and other firms use it as a market-leading benchmark.
But recently, the order has gotten a bit mixed up.
On Friday, Above the Law reported that Sheppard Mullin Richter & Hampton — a California-based law firm with more than 700 lawyers — had gone ahead and rolled out its own associate bonus plan, before any word of Cravath’s bonuses were released.
Just last year, it was Simpson Thacher & Bartlett that theoretically cut the line when releasing its own generous associate bonuses, ranging from $10,000 to $100,000.
What is this anarchy? Do lawyers just not care about time honored traditions anymore? Is this yet another sign of the competitive legal landscape turning the profession into something just... so ugly?
Wait, hold up. What was that? Sheppard Mullin spokesman Ralph Richardson said that the associate bonuses reported in Above the Law was actually the firm’s last bonus announcement, from March 17, 2015, and that the firm has not made any new announcement regarding associate bonuses.
In the memo, Sheppard Mullin Chairman Guy Halgren explained that on a going-forward basis, Sheppard Mullin intended to set its annual bonuses in the first quarter, “so we will have access to more market data.”
Bob Williams, head of talent for Sheppard Mullin, told Big Law Business that the plan to announce bonuses in the first quarter hasn’t changed, and he explained that the March memo that was leaked to Above the Law included projections about what bonusescould bein the following year, which could have caused confusion.
Richardson provided the Sheppard Mullin memo from March, which states:
“We do not know what amounts we will pay at various hours levels in March 2016. That will depend on the market. We can confirm now our plan is for the hours levels for Associate bonuses to be 1950, 2100 (2000 in NYC), 2200 and 2400. I want to emphasize these hours levels are not intended to incentivize our Associates to work high hours. However, when Associates are required to work extraordinary hours on behalf of our clients, we believe they should be rewarded.”
Williams said that the only thing that changed recently was the fact that the firm decided to post Halgren’s memo on the firm’s intranet server, making it available to new hires, which is how he believes the memo was leaked. Williams said he intends on revising language in the memo to make it more clear that it contains dated information.
Joe Patrice, the author of the Above the Law article, said that the real concern is the fact that Sheppard Mullin has decided to pay associates so-called 12/31 bonuses in March — meaning that associates need to wait three months to ‘get paid,’ and which he contended handcuffs them from leaving to join another firm during the time.
“We’ve always made hay of firms withholding 12/31 bonuses,” said Patrice.
At any rate, I guess we’ll still sit tight for associate bonus season to officially start off after what has been a dramatic build up. Simpson at least so far has shown the courtesy of waiting until late November; it would be pretty extraordinary for any firm to blow up the system and go a full month ahead of that.