As I mentioned in an earlier post, the Summer 2018 law firm salary wars have taken my breath away. Buyers of legal services use coalitions and think tanks to address the escalating cost (yet similar or lesser value) of legal services. However, rather than take a BIG HINT, some law firms are forming circular firing squads by figuring out why they are so unfairly underpaid in a compensation model that has not changed very much since Nirvana told us to Come As You Are.
The most recent story I read concerned tech/VC powerhouse firm Cooley who had a different take on compensation. They decided to base summer bonuses for associates–get this–on total contribution to the firm and not just on the number of hours they bill to clients. Gasp! The scandal!
According to the article, some at the firm are “livid”, and they will “have to wait till the end of the year to think of moving”. In addition, associates will have to “trust that the firm will make it up” when it comes to bonuses they did not receive for six whole months. I have to admit, this is the first time I have seen an argument about the “time value of money”, which seems to absent anytime we expect collections in 30-60 days to keep realization rates high…
There are a few words and concepts in here that are particularly disappointing to me:
- Livid: If you are fortunate to work at an incredible firm like Cooley, go find your leprechaun friend and give him a big kiss and say thank you. You have made it. You are almost guaranteed perpetuity in the set-for-life club. Be grateful and stop coveting.
- Trust: This entire industry is built on trust! Attorney-client privilege, conflicts, confidentiality, impartiality are the roots of our rule of law system. Clients trust they they are not being overbilled for hours, research, travel, and staffing. Law firms trust they they will eventually get paid for the thousands of hours they have put into a deal or matter despite the outcome. For internal lawyers to question that they may not be able to “trust” the law firm to do the right thing might be in the wrong profession.
- Contribution: If your value is SOLELY based on how many hours you can rack up, you would make a great contract lawyer. If you contribute to the firm, its culture, and its clients’ financial (and emotional) success, you can be a member of our team, and we will reward you handsomely. The last thing we need is a bunch more extremely talented people insistent on tying themselves to a plow and pushing until they drop dead.
Bravo to you Cooley. I hope your clients see this move and reward you with a dump truck full of more work. This move benefits not only the clients and the firm. It benefits the PEOPLE at the firm. By establishing the fact that value and contribution is about BALANCE, they are defining what it means to be a great lawyer, team member, and a happy human being. It has to be more than “where is my money or I am leaving.” There are places for that, but it isn’t Cooley.
Can some GC do me a solid and send them a seven figure deal? It would make my day.
In regard to the summer bonuses being paid by some firms, we have chosen a different course consistent with our long-standing commitment to awarding merit-based bonuses. In the Management Committee’s view, the only basis upon which to decide who would receive a summer bonus and who would not would be year-to-date billable hours averages through June. The variability of work flow and the timing of leaves of absence and vacations across a given calendar year aside, the simple fact is that our bonus system is not based upon productivity alone. As we have consistently demonstrated, we differentially reward am attorney’s total contribution to the firm, to include performance, productivity and non-billable contributions which demonstrate behavior that is consonant [sic] with the Firm’s values.