Just when you thought the salary wars were getting boring….

It started interestingly enough, with Milbank shocking the Biglaw world with new raises. Simpson Thacher kept the intrigue alive when they went over the top with special Bonuses. But once Cravath finally came to play, slightly increasing salaries from the Milbank scale for senior associates, most firms have adopted the Milbank/Simpson/Cravath scale. But now a firm has decided to be different — but associates aren’t happy about it.

Cooley has announced they are raising base associate compensation in line with the market standard. But there are no Summer Bonuses for associates:

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 with the Firm’s values.

Rather than pay bonuses based on productivity alone at this stage in the year, our 2018 bonuses will be paid with a clear understanding of the total compensation being paid within the market at the conclusion of the year. Consistent with prior years, our differentiated bonus payments will provide total annualized compensation for our top performers which materially exceeds the total compensation received by attorneys at other firms.

It strikes me as odd the firm’s decision to whiff on summer bonuses depends so much on an arbitrary definition of fairness. Sure, some firms have explicitly tied bonuses to prorated billable targets which might seem unfair, particularly if you anticipate a busy Q4. But… there are a lot of ways to give associate bonuses in a *fair* way. You could not tie these dollar amounts to any billable target, which many firms seem to have done. Or you could take the creative approach of Gunderson:

To be eligible for this mid-year bonus only, you must have annualized hours of at least 1,800 for the six-month period ended May 31, 2018.  We recognize that there is significant variability in hours over a partial year and have therefore set the eligibility threshold at a relatively low level.  If you are not eligible for this mid-year bonus but finish the year with annual hours greater than 1,800, then you will receive an amount equal to what your mid-year bonus would have been (had you been eligible) in addition to your year-end bonus (not diminished or reduced by the year-end payment to you of a mid-year bonus amount).  Mid-year bonuses will be prorated based on start date, part-time and leave arrangements.

See, there are lots of options besides telling associates to wait and trust that the firm will make it up.

Reaction from associates… hasn’t been kind. As one tipster notes:

Associates are beyond livid at this cheap and short-sighted move by the firm.

And yes, associates are making a lot of money, but they have every right to be pissed off. First of all, it ties an additional 6 months of employment at the firm to their promised payday. There are a lot of interesting prospects in the lateral market, but if associates want to be paid the same as peers at other firms they’ll have to wait till the end of the year to think about moving. There’s also the time value of money — the concept that money available at right now is worth more than the same amount in the future. If Cooley is so damn sure they’ll beat the market in overall compensation, they could just pay all associates market bonuses now and deduct that from the end of the year bonuses.

But that’s not what Cooley decided to do.

Remember everyone, we depend on your tips to stay on top of this stuff. So when your firm matches, please text us (646-820-8477) or email us (subject line: “[Firm Name] Raises Salaries”). Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file.

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(Read the full memo from the firm on the next page.)

Kathryn Rubino is an editor at Above the Law. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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