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Editor’s note: This is the final installment of a two-part series examining associate bonuses and salaries. This installment looks at some of Pennsylvania’s largest law firms. Despite a slowdown in the economy, and, by association, certain practice groups, some of the state’s largest law firms said they didn’t see any real drop in the depth of the associate bonus pool for 2007, with several firms showing increases in billable hours. That doesn’t mean, however, those associates will see salary hikes anytime soon. The general consensus among Pennsylvania’s large law firm leaders is there may be some adjustments to meet market standards, but there probably won’t be the $10,000 to $20,000 increases associates have seen over the past few years. Most firms reported seeing no material change in the bonus pool given to associates at the end of their respective 2007 fiscal years, while some said they didn’t see the high spikes in performance bonuses that had been par for the course in recent years. Gregory A. Miller, head of Buchanan Ingersoll & Rooney’s associate committee, said the bonus payout for 2007 was roughly equivalent to the prior year. Associates can obtain billable hour and discretionary bonuses, with the total possible payout capping off at $60,000. For the billable hour side of the equation, associates must meet at least 1,950 hours and have at least an “excellent/very good” performance rating on the last review, Miller said. The firm also gives out cash to associates who might not make that mark but have contributed to the firm in other ways, such as business generation or mentoring other associates, he said. The only material difference for 2007, Miller said, was that no one hit the $60,000 mark. He said the firm didn’t see the spikes in bonuses it had in years past when certain practices like mergers and acquisitions took off. For 2007, associate salaries were definitely up, but bonuses were relatively flat on the whole, Miller said. Drinker Biddle & Reath saw an increase in average billable hours for its fiscal year ending Jan. 31. Executive Partner Andrew C. Kassner said the firm primarily awards bonuses based on billable hours but also gives out some discretionary bonuses. The firm hit its budget in terms of associate hours and gave out bonuses in a similar fashion as last year, he said. For Drinker Biddle associates, various billable hour benchmarks, starting with 1,950 hours, are given a corresponding bonus. With each benchmark increase, the corresponding bonus increases by between $7,500 and $10,000 or more, Kassner said. More senior associates are generally given higher bonuses than junior associates, he said. While Fox Rothschild is still waiting for the close of its fiscal year on March 31, Administrative Partner Mark Silow said he doesn’t anticipate any material drop-off in the amount of bonuses given out by the firm. Bonuses are based mainly on performance and other set metrics, so if the work was done, the bonus is there to give, he said. The firm does not give out discretionary bonuses. Instead, associates can receive bonuses for meeting various billable hour requirements and for bringing in business to the firm. Associates are paid 10 percent of the fees they originate. Silow said associates have earned six-figure bonuses on this metric alone. Fox Rothschild also gives out retention bonuses. After their third year, associates receive $5,000 and after five years they get $12,500. Wolf Block Chairman Mark Alderman said the associate bonus pool for 2007 was up for his firm from the prior year. While he didn’t give specific numbers, Alderman said the firm awards “significant five-figure bonuses.” Salaries Associates might be in trouble if they budgeted in another $10,000 increase in their salary for 2008. Firms don’t anticipate making those all-too common announcements of salary hikes this year. At least one firm that spoke to The Legal, however, will be making some adjustments to catch up in offices where it feels it’s not at the going market rate. Drinker Biddle, which made the move to $145,000 for starting salaries in Philadelphia and several of its other major markets last September, has decided to make adjustments in certain offices come September 2008. Kassner said the firm would go to $160,000 in New York, Chicago, Washington, D.C., and California. The Philadelphia and other mid-Atlantic offices will remain at $145,000, where he said Drinker Biddle is at the top of the market. On the other hand, Wolf Block has made the decision to keep its starting salary at $135,000, despite seeing other firms in Philadelphia move to $145,000 last year. Instead, the firm gives step increases for each class and performance-based bonuses, Alderman said. Fox Rothschild took that same approach last year, deciding to stay at $125,000 for first-year pay. Silow said the firm thinks it was a pretty smart move in retrospect. “Nothing has transpired over the last 12 months to make us think we did anything but the correct move,” he said. Silow said he thinks the ever-upward increase in associate salaries will slow this year, particularly with the economic forecast for 2008. He said he is reading more about layoffs than salary increases. Miller doesn’t expect the frenetic pace of salary adjustments to continue into 2008. He said Buchanan Ingersoll was looking every few months over the last few years at where it stood in the market. For 2008, the firm will react and deal with changes in the marketplace if they happen but generally expects to keep steady with salaries, he said. Currently, Pittsburgh first-years make $120,000 and Philadelphia first-years bring in $135,000. Miller said there might be some changes in specific practice areas as opposed to geographic markets. Intellectual property practices, for example, are very competitive and often demand higher salaries, he said.

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