Bonuses Spread to Associates at Midsize and Small Firms

, New York Law Journal

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Steven Sladkus
Steven Sladkus is a partner at Wolf Haldenstein Adler Freeman & Herz, which created a merit-based system for awarding associate bonuses.

Based on those factors, he said an associate's total compensation, including base salary and year-end bonus, can be similar to what he or she could earn at a large firm. "We are interested in being competitive to large firms. We carefully follow what large firms are paying."

The range for associate bonuses at Otterbourg is typically $15,000 to $100,000. Associates are not guaranteed bonuses, Wallen said, but generally they receive one every year.

"In a midsize firm, individual associates do not get lost and can be evaluated on their individual performance," he said. "Compensation should be awarded based upon performance rather than an associate feeling an entitlement to a certain amount of compensation merely because they are in a particular class."

• Class action and real estate firm Wolf Haldenstein Adler Freeman & Herz, with 74 attorneys, previously awarded bonuses based on seniority.

But in recent years, the firm moved to a merit-based system, awarding year-end bonuses to associates based on their placement in one of three categories: A for all-around superior work; B for excellent work needing some improvement; and C, for work needing much more improvement, said Steven Sladkus, a partner at the firm.

Sladkus declined to discuss the amount of bonuses for each category, but said lawyers in the same category generally receive similar bonuses.

"In some cases, it delicately sends message to people who need the message," he said. "It incentivizes them. If you're lockstep, sometimes it doesn't address the issue as it really should be addressed."

Wolf Haldenstein determines bonus category by evaluating work product, billable hours, interactions with clients, trial and transaction performance, feedback from clients and partners, Sladkus said. The firm's performance doesn't affect the bonus, he said.

Compared with a large firm, "we're only reviewing 38 people," said partner Gregory Nespole. "We can sit down and do this on a much more subjective, holistic manner."

The firm's daily adversaries in court are lawyers from Skadden, Arps, Slate, Meagher & Flom and Cravath. "So of course I have to be very mindful of their compensation basis," Nespole said.

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