Bonuses Spread to Associates at Midsize and Small Firms
"We are focused on providing value to clients and fair compensation to our employees, and our bonus structure is derived based on those twin objectives," he said. "What large firms do in their bonus pools is of much less significance to us."
But he added the market-rate scale is a "relevant data point, because we are competing with [large firms] for the same associates. But we think we can offer a much greater set of opportunities to young lawyers."
The firm's base salary for first-year associates is about $155,000, he said.
• At Kleinberg, Kaplan, Wolff & Cohen, a 60-attorney firm that represents, among others, investment funds, including hedge and private equity funds in corporate and real estate matters, year-end bonuses may be awarded to associates and counsel who have more than 2,000 billable hours a year, said managing partner Andrew Chonoles.
Associates and counsel also benefit from bringing clients to the firm, he said.
The firm also contributes to an employee profit-sharing plan for non-attorney staff, associates and counsel. The contributions are tax deferred and fully vested in five years, similar to an extra 401K.
With everything combined, "the package provides substantial upside to attorneys" that could exceed the upper range of the standard bonuses of large firms, Chonoles said.
"We view our package as competitive with everybody once you put all those pieces together," said Eric Wagner, Kleinberg's corporate practice chair. "We don't try to match what big firms pay on every particular line."
Another incentive for associates is advancement. Most of Kleinberg Kaplan's current equity partners come from the associate ranks, firm leaders said.
• Otterbourg, a 55-attorney firm representing clients in financing transactions, litigation and creditor rights, determines year-end bonuses by looking at the quality of legal work, responsiveness to client needs, billable hours and an associate's class, said firm chairman Daniel Wallen.