Biglaw

Discontent With Firm's Opaque Bonus Model

What's inside the black box?

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Historically, Haynes and Boone has come in all over the map when it comes to bonuses. It’s another firm with a black box bonus structure that leaves associates scrambling to figure out exactly why they’ve made what they’ve made in any given year. So far, the tips we’ve received are mostly negative — with associates complaining that the arcane formula the firm uses shortchanges folks at more senior levels. That said, if precedent is any guide, Above the Law will shortly receive a tip from an associate earning a full market bonus under the formula. How does a firm end up with such a spread? One tipster has a theory.

For the record, if it even needs repeating, black box bonuses are rarely good news for associates. In the best of cases it’s used to obscure downward trend line in compensation. In the worst of cases it’s used to atomize the work force and conceal arbitrary or discriminatory pay practices. It’s just a killer for firm morale to have everyone looking over their shoulder wondering if they’re getting paid what they deserve. And sometimes, this leads to associates trying to reverse engineer the formula to square bonuses with their friends.

One associate who admits to not having fully cracked the code claims to have worked out one insight:

They seem to have taken on an “Eat-what-you-kill” standard for associates. So if you do work for a client with low negotiated rates you are going to be compensated less than someone doing the same work for another client that pays more for the same work.

There’s a certain appeal to the eat what you kill model. After all, you can end up on top of the world with a cut of a multimillion dollar payday. But you can also find yourself turning out your pockets because you’ve been working on low paying matters for a practice group that simply gets paid at lower rates.  Making these associates functionally second-class citizens isn’t only unfair, it can actually undermine a firm’s shared mission with associates avoiding partners offering lower rate work. Sure, sometimes the partners with lower rate work are poor fits for the firm, but just as often those partners are doing work servicing clients who bring in bigger paydays for other practice groups. That work needs to be handled without associates ducking it to preserve their bonuses.

In any event, Haynes & Boone folks should let us know (anonymously of course) what they’re getting so we can test out this theory. Good luck to everyone out there.

Please help us help you when it comes to bonus news at other firms. As soon as your firm’s bonus memo comes out, please email it to us (subject line: “[Firm Name] Bonus”) or text us (646-820-8477). 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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HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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