Bonuses Spread to Associates at Midsize and Small Firms
Associate bonuses are no longer confined to large law firms. Midsize firms and boutiques say they are increasingly using individualized merit pay paired with incentive packages to retain and reward their most talented lawyers.
"We're smaller and we have to be in some ways more bottom line thoughtful and more creative," said Eric Wagner, corporate practice leader at Kleinberg, Kaplan, Wolff & Cohen.
Large law firms typically follow the lead of Cravath, Swaine & Moore, whose annual associate bonus announcement sets the standard. Kicking off the most recent bonus cycle, Cravath said in December it would award a $10,000 bonus for 2012 law school graduates and up to $60,000 for those in the 2005 class or more senior associates.
At midsize firms and boutiques, the bonuses can be just as high or higher for a select group of top-performing associates. They also can be modest, a reflection of lower billing rates to more mid-market clients.
Although annual bonuses at smaller firms aren't as predictable, firm leaders said the trade-offs for young attorneys are lower billable hour targets, direct experience and a pathway to partnership for associates.
Seven small to midsize firms firms shared their approach to associate bonuses:
• At BuckleySandler, a boutique that serves the financial services industry, bonuses are not guaranteed. They are given to associates and counsel based on their performance and firm "citizenship," including work ethic, teamwork and commitment to the firm, said Andrew Sandler, chairman and executive partner.
"Our basic philosophy is, our best performing lawyers should always get bonuses that are at or above the big firms," Sandler said.
The other factor is the firm's yearly economic performance. Bonuses for associates and non-attorney staff "are better when the firm has a good year," he said.
Last December, Sandler noted, some of the firm's top-performing associates received bonuses above Cravath's range, while others stayed in the $10,000 to $60,000 range.