As expected, several large law firms have fallen in line with the associate bonus scale set by Cravath, Swaine & Moore this week. But some associates need to work harder to earn their reward than others.
As in past years, some firms are setting billable hour requirements for bonuses this year. Above the Law on Tuesday reported that associates at Norton Rose Fulbright must have 2,300 billable hours to qualify for market rate bonuses set by Cravath—in which most recent law school graduates receive $15,000—while those associates who fall below 2,300 will qualify for bonuses that are half as much as market rate.
When reached for comment, representatives of Norton Rose, which absorbed New York-based Chadbourne & Parke earlier this year, referred to “inaccuracies” in the Above the Law report but did not name specific errors. The firm did not respond when asked whether associates must record 2,300 billable hours to be eligible for the market bonuses.
In a statement, Norton Rose said it did not change its compensation program this year and the firm factors in nonbillable hour work in compensation.
“In addition to hour-based bonuses, our associate compensation program includes a significant discretionary bonus component to encourage and acknowledge important non-billable activities, such as client development and pro bono activities,” the firm said. “We use discretionary bonuses in conjunction with hour-based bonuses to ensure that Norton Rose Fulbright’s compensation is in line with, or exceeds, the compensation paid in each of our markets.”
Meanwhile, associates at Cadwalader, Wickersham & Taft who have recorded at least 2,200 billable hours can earn even more than the scale set by Cravath.
In a firm memo, managing partner Pat Quinn said Cadwalader “had a strong year thanks in no small part to the hard work and dedication of our exceptional legal staff” and outlined in his memo the bonus scale set by Cravath for “qualified associates and special counsel.”
To be qualified, associates must record 2,000 hours. While the firm announced it was jettisoning a billable hours requirement for bonuses in 2014, a firm spokesman said it reinstated a billable hours policy last year. The spokesman said 200 of the 2,000 hours can be from nonbillable hours, such as for pro bono, recruiting and training.
Quinn said in his memo that “qualified associates and special counsel” who have recorded at least 2,200 billable hours “will be awarded bonuses equal to 120 percent of the amounts” in the market scale.
Under this system, qualified first-year associates with at least 2,200 hours may receive a bonus of $18,000, while an eighth-year associate with such billable hours may receive $120,000.
A firm spokesman said Cadwalader implemented the “super-bonus” policy last year, “formalizing something that we and other firms did previously and continue to do” and the firm anticipates healthy participation.
“It appears that a significant number of our associates will be eligible and will receive this 120 percent bonus for billable hours of 2,200 and above,” the spokesman added.
As Cadwalader noted, other firms have offered sweeteners for extra billable work. For instance, in 2012, Kaye Scholer, now a part of Arnold & Porter, told its associates that they would receive extra year-end compensation based on the Cravath scale, with those who rack up at least 2,200 billable hours for the year getting a bonus on top of their bonus.