EOY Bonuses Forum

[glitched]

If you think associates are fungible, then you haven't worked with bad associates. This is a service industry, and associates are the product.

I completely agree that associates are not fungible. And yet it seems like the predominant sentiment on this board is in favor of lockstep bonuses. Why?

Too much time, energy, and stress would be wasted if we moved away from lockstep.

[FF2020]

If you think associates are fungible, then you haven't worked with bad associates. This is a service industry, and associates are the product.

I completely agree that associates are not fungible. And yet it seems like the predominant sentiment on this board is in favor of lockstep bonuses. Why?

Brings too much subjectivity into things in a profession rife with bias and extremely competitive personalities who (mostly) weren’t able to get into higher paying jobs to start with. Becomes a recipe for internally competitive behavior rather than skill enhancement and doing the best job you can for the client. You know you’re not fungible because you keep your job.

Frankly I’d prefer lockstep comp for partners, too, but that ship has sailed. Organizations are more successful when everyone’s trying to make the pie bigger rather than trying to grab a bigger piece of the same pie for themselves. But maybe the two aren’t totally inconsistent.

[HelloWorld919]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

[Anonymous User]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

[Anonymous User]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

Lol. Law firms seem to be doing fine at making superstars. Better track record than most small pe shops probably.

[VentureMBA]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

Lol. Law firms seem to be doing fine at making superstars. Better track record than most small pe shops probably.

The bar to get small PE is orders of magnitude higher than biglaw

[Anonymous User]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

Lol. Law firms seem to be doing fine at making superstars. Better track record than most small pe shops probably.

The bar to get small PE is orders of magnitude higher than biglaw

That's to get small PE... but what do you really get out of it? I have a friend who just made the jump and his company is investing in turboprop manufacturers in Indiana with <$5mm EBITDA and he's making barely more than a first-year associate. Sure it's better if you go to a bigger firm but come on.

Biglaw, meanwhile, is what you make of it. I don't think they see associates as fungible from the general law student population for reasons stated above but once you're inside the firm you are pretty fungible compared to your immediate peers. Still, I think the guy in small PE has a much lower lifetime ceiling than the first-year BL associate, even if the former has a higher floor.

[VentureMBA]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

Lol. Law firms seem to be doing fine at making superstars. Better track record than most small pe shops probably.

The bar to get small PE is orders of magnitude higher than biglaw

That's to get small PE... but what do you really get out of it? I have a friend who just made the jump and his company is investing in turboprop manufacturers in Indiana with <$5mm EBITDA and he's making barely more than a first-year associate. Sure it's better if you go to a bigger firm but come on.

Biglaw, meanwhile, is what you make of it. I don't think they see associates as fungible from the general law student population for reasons stated above but once you're inside the firm you are pretty fungible compared to your immediate peers. Still, I think the guy in small PE has a much lower lifetime ceiling than the first-year BL associate, even if the former has a higher floor.

Sounds like the floor is lower if he’s making less than a first year?

Getting carry in PE is more lucrative than making partner in Big Law, and you work far far less as a PE principal than a Big Law partner

[Anonymous User]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

Lol. Law firms seem to be doing fine at making superstars. Better track record than most small pe shops probably.

Not at all, law firms mass hire and the vast majority of people leave relatively quickly. That is an enormous amount of training and resources expended gone straight down the drain. Smaller companies are much more focused on hiring people who will stay and contribute long term, hence the focus on personality, fit, career goals, competence, etc... Law firms view junior associates as expendable drones, the vast majority of whom will flame out, and recruiting is structured accordingly.

[Anonymous User]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

Lol. Law firms seem to be doing fine at making superstars. Better track record than most small pe shops probably.

The bar to get small PE is orders of magnitude higher than biglaw

That's to get small PE... but what do you really get out of it? I have a friend who just made the jump and his company is investing in turboprop manufacturers in Indiana with <$5mm EBITDA and he's making barely more than a first-year associate. Sure it's better if you go to a bigger firm but come on.

Biglaw, meanwhile, is what you make of it. I don't think they see associates as fungible from the general law student population for reasons stated above but once you're inside the firm you are pretty fungible compared to your immediate peers. Still, I think the guy in small PE has a much lower lifetime ceiling than the first-year BL associate, even if the former has a higher floor.

Sounds like the floor is lower if he’s making less than a first year?

Getting carry in PE is more lucrative than making partner in Big Law, and you work far far less as a PE principal than a Big Law partner

Again, we're talking a firm making a small number of small investments. A principal at a firm making 5-10mm EBITDA investments probably isn't taking home BL partner money. That might be a thing at bigger firms but (a) as firm size increases, so do the number of people claiming carry and (b) the vast majority of PE firms are tiny.

As for work--maybe? You're still selling--looking for new investors in your fund, etc. You still have to manage a team below you. Both pressures only increase as your AUM/comp increases. IMO the only PE guys with truly better WLB than BL partners are the ones who make substantially less than them.

Now hedge funds can be a completely different story--my dad was a small HF manager and absolutely made more than biglaw partners/worked far less than they did, but he was also an obscenely gifted quant in the way that neither PE or BL attracts. Outside of the distressed debt world I don't think HF managers are good parallels to BL partners.

[Anonymous User]

“Associates are fungible”

Yeah, that’s why every good law firm puts in six-figures+ between their recruiting department, events, 1L/2L salaries, summer events, bar expenses, etc. per new associate before that associate even bills a single hour at the 1st year rate. All while knowing that the associate probably is gonna leave in 2 years anyway.

Compare biglaw recruiting to like a small or midsize PE fund recuriting an analyst out of an IB.

Biglaw: a few meaningless 30 minute conversations with no substantive legal discussions, and no real effort to map out your role and trajectory in the firm. Basically just trying to get enough competent bodies in the door, knowing that 80% will be gone in a few years anyway, and all will pretty much hate the job.

Small PE fund: Multiple rounds of interviews with every member of the team, a heavy focus on cultural fit and making sure you fit into a specific role, in depth substantive questions including analyzing investment opportunities and presenting to the team. Basically looking for a superstar to stay long term and add huge value, not just another drone.

The whole wine and dine thing is actually a really good indication that the interviews are a joke. You don't wine and dine people to accept a job that is good.

Biglaw is interesting in that the interviewing is actually just the associate years. 1st year recruitment is them taking the shotgun approach. "Let's just hire like 150 associates, and at least 5 of them have to pan out."

Then next 8-10 years is figuring out which 5/150 are worth actually becoming permanent members of the firm.