Unequal Treatment Across Offices Leaves Lots Of Angry Associates
Not in NY or D.C.? You'll have to bill a lot of hours to come close to market compensation.
It’s a neat trick to announce raises and special bonuses but still wind up with the bulk of your associates angry at you. But, judging by the extensive reaction we’ve received to Norton Rose Fulbright’s recent compensation announcement, that’s exactly what happened.
The frustration seems to stem from the unequal treatment in offices at the firm. New York and D.C. are being treated close to the market standard, while other offices — particularly those in Texas and California (markets that have largely gotten on board with associate raises and summer bonuses, at least at the elite level) — don’t fare as well.
Now, let’s break this down by office — New York and D.C. are getting raises in line with the market standard we are used to seeing:
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Class of 2017: $190,000
Class of 2016: $200,000
Class of 2015: $220,000
Class of 2014: $255,000
Class of 2013: $280,000
Class of 2012: $305,000
Class of 2011: $325,000
Class of 2010: $340,000
The firm is also promising special bonuses for these offices, but isn’t giving them out until the end of the year. That sucks if an associate is thinking about lateraling to another firm this year. They’re trapped by golden handcuffs at NRF till they see that money. But at least they’ll be on top of the standard hours-based year end bonuses.
Class of 2017: $5000
Class of 2016: $7500
Class of 2015: $10000
Class of 2014: $15000
Class of 2013: $20000
Class of 2012: $25000
Class of 2011: $25000
Class of 2010: $25000
Other offices are getting… a distinctly less generous deal.
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In Texas and California, first- and second-year associates will get a market raise, but anyone older needs to hit their billing requirement — set at a steep 2300 hours per year — to get a bonus that will make them whole vis-a-vis a NY associate’s (of the same year) base compensation. It’s unclear if that’s a one-time 2018 bonus or if associates in those offices can expect these bonuses year after year — provided, of course, they keep billing. The firm makes no mention of special bonuses for these offices, but promises discretionary bonuses will be bigger.
In our Texas and California offices, we will adopt an increased salary scale for incoming, first-year and second-year associates (2017 and 2018: $190,000; 2016 $200,000). Associates in class years 2010-2015 who qualify for the full hours-based merit bonus will also receive a bonus equal to the difference between their current salary and the salary scale set forth above (prorated for 2018), in addition to their standard hours-based merit bonuses. We are also significantly increasing our discretionary bonus program to ensure competitive associate compensation packages for our highly performing associates in these markets. Discretionary bonuses reward excellence in performance, account for market trends and acknowledge important non-billable activities.
For associates in the firm’s other offices (Denver, Minneapolis, and St. Louis) they’re left to the murky waters of individualized compensation.
We’ve gotten a lot of reactions to the firm’s announcement.
From the clever:
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I’m sure you’ve heard about the Norton Rose Fulbright bonus announcement by now? Is Thompson Knight hiring?
(Remember T&K offered a full match of the Milbank/Simpson/Cravath scale.)
To the mathematical:
As a reminder, the Norton Rose Fulbright “full hours-based bonus” requirement is 2300 hours. If an associate finishes the year between 2000 hours and 2299 hours, the year-end bonus is 50% of market. As a result, a San Francisco-based 2010 grad that finishes with 2250 hours at NRF should expect to earn 87,500 less this year than a Fort Worth-based 2010 grad that finishes with 2000 hours at Akin Gump or Thompson Knight (NRF: 315k+ 50k+ 0 vs. AG/TK: 327.5k+ 100k+ 25k).
To the biting:
I am sure you have received this already, but Norton Rose Fulbright’s comp memo. Basically if you’re an associate not in the New York, DC, Texas or California offices, or are Senior Counsel and Counsel, smell ya later! And the crafty “yeah, we will give you a mid year bonus, but only at the end of the year and only if you qualify for the end of the year full hours-based merit bonus”.
To the dismissive:
So the comp memo makes no sense. Here it is….
Seriously???!!
To the brief but effective:
People are pissed.
The firm tried to split the compensation baby, and it doesn’t look like many associates — well, except maybe those in the most favored offices — are happy.
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(Read the full memo from the firm on the next page.)
Kathryn Rubino is a senior 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).
