2015 Biglaw Boneus Thread Forum

[Morgan12Oak]

Bonuses next year will be lower and should be lower. Q1 pipeline is non-existent too. I think it's clear DPW saw the writing on the wall.

There's also no reason to pay higher bonuses. Compensation in finance in good markets is higher because when things get bad, those bonuses take a real meaningful hit.

The idea of "bonuses" for lawyers is silly. We all joined this profession so we wouldn't have large yearly fluctuations in salary because we're all risk adverse and don't want to have to scramble for jobs when market turns bad.

During the downturn, virtually every law firm did not lay off heavily. A few did, most cut some associates under the guise of performance but these layoff percentages paled in comparison to banks. Just miniscule in comparison.

yeah why would you pay performance-based bonuses in a profession where you bill by the hour

idiot

might be hard for an aspie like you to understand, but performance-based bonuses in a profession where you bill by the hour and in a profession that's largely a cost center for your clients doesn't make a whole lot of sense

my client doesn't determine my bonus, the guy who makes an extra 6 figures when i bill an extra 500 hours this year does

if you can't make the connection between why bonuses tied to hours doesn't make sense in our industry for associates then you really truly belong to stay in biglaw a long time

[DELG]

Wow sorry I didn't mean to be replying anon

But yeah, no, incentivizing hours most obviously will continue to make sense until flat rate is the norm and my firm isn't even moving that way

[Anonymous User]

Part of me thinks DPW memo was a note to other firms as if to say, "we're not raising base salaries so don't look to us". It's like avoiding being a cartel while being a cartel. I'm sure they would match but they won't lead.

DPW is very image conscious. They are a conservative white shoe firm and they build their culture around genteel client service. Tom Reid has discussed bonuses with groups of juniors on occasion and explained (in his view) that the firm could afford and all things equal would like to compensate junior associates better with higher bonuses or salary, but they have to be extremely sensitive to clients' impressions, and it's a bad look when the client hears about the firm making it rain for associates whose work is of dubious value in the first place. That's why they are more comfortable raising compensation for mid-levels, but even there its a tough balance. So I think the bonus memo, as with everything else, was actually directed towards clients as a PR stunt.

Of course, another one of Tom Reid's goals is to increase PPP by a wide margin by 2020. So it's a catastrophically flawed set of priorities.

[smaug]

flat fee (and contingent fee) billing is soo cr, though, right? Actually sets the right incentives for firms, though I've heard some clients can be bullies about the whole thing.

[Big Shrimpin]

Part of me thinks DPW memo was a note to other firms as if to say, "we're not raising base salaries so don't look to us". It's like avoiding being a cartel while being a cartel. I'm sure they would match but they won't lead.

DPW is very image conscious. They are a conservative white shoe firm and they build their culture around genteel client service. Tom Reid has discussed bonuses with groups of juniors on occasion and explained (in his view) that the firm could afford and all things equal would like to compensate junior associates better with higher bonuses or salary, but they have to be extremely sensitive to clients' impressions, and it's a bad look when the client hears about the firm making it rain for associates whose work is of dubious value in the first place. That's why they are more comfortable raising compensation for mid-levels, but even there its a tough balance. So I think the bonus memo, as with everything else, was actually directed towards clients as a PR stunt.

Of course, another one of Tom Reid's goals is to increase PPP by a wide margin by 2020. So it's a catastrophically flawed set of priorities.

ugh

this business model sucks

[PMan99]

DPW is very image conscious. They are a conservative white shoe firm and they build their culture around genteel client service. Tom Reid has discussed bonuses with groups of juniors on occasion and explained (in his view) that the firm could afford and all things equal would like to compensate junior associates better with higher bonuses or salary, but they have to be extremely sensitive to clients' impressions, and it's a bad look when the client hears about the firm making it rain for associates whose work is of dubious value in the first place. That's why they are more comfortable raising compensation for mid-levels, but even there its a tough balance. So I think the bonus memo, as with everything else, was actually directed towards clients as a PR stunt.

I can't speak to DPW specifically, but this justification really falls flat when you consider most BL firms raise billing rates almost every year for given seniority levels.

[TLSModBot]

flat fee (and contingent fee) billing is soo cr, though, right? Actually sets the right incentives for firms, though I've heard some clients can be bullies about the whole thing.

Seriously though why isn't there quicker implementation of fixed billing in some form? I think the main hurdle is estimating project costs but someone HAS to have the data on historical costs in sufficient quantities for predictive purposes in future deals.

[PMan99]

flat fee (and contingent fee) billing is soo cr, though, right? Actually sets the right incentives for firms, though I've heard some clients can be bullies about the whole thing.

Seriously though why isn't there quicker implementation of fixed billing in some form? I think the main hurdle is estimating project costs but someone HAS to have the data on historical costs in sufficient quantities for predictive purposes in future deals.

Firms don't want to do it, GCs are ex-partners who know firms don't want to do it.

[smaug]

the PPP wars are like a Cold War thing, right?

People itt tell me I'm dumb so maybe someone can explain what I'm missing:

It's like nuclear armament or some shit. Gotta keep the PPP high or your partners are going to get poached. You lose a client and partner and your PPP takes a hit and then those who are remaining are even more likely to jump ship.

Only way to win is by never playing the game but it doesn't seem like many firms are sticking with that model anymore. Odd to see the genteel folks at DPW engaging in this game.

[smaug]

flat fee (and contingent fee) billing is soo cr, though, right? Actually sets the right incentives for firms, though I've heard some clients can be bullies about the whole thing.

Seriously though why isn't there quicker implementation of fixed billing in some form? I think the main hurdle is estimating project costs but someone HAS to have the data on historical costs in sufficient quantities for predictive purposes in future deals.

Isn't the client-side fear that you're coasting and not doing everything you can? Probably a weird intersection of CYOA and sloth on GCs part (one you can just hire an outside group to audit bills and raise hell, the other you actually need to be engaged yourself to make sure the firm isn't just coasting)

[TLSModBot]

flat fee (and contingent fee) billing is soo cr, though, right? Actually sets the right incentives for firms, though I've heard some clients can be bullies about the whole thing.

Seriously though why isn't there quicker implementation of fixed billing in some form? I think the main hurdle is estimating project costs but someone HAS to have the data on historical costs in sufficient quantities for predictive purposes in future deals.

Isn't the client-side fear that you're coasting and not doing everything you can? Probably a weird intersection of CYOA and sloth on GCs part (one you can just hire an outside group to audit bills and raise hell, the other you actually need to be engaged yourself to make sure the firm isn't just coasting)

I think the pressures on GCs to be able to predict costs and to control costs both weigh on the side of preferring fixed fees. From what I've read corporate counsel want this - it's more a question of implementation and inertia

[TLSModBot]

Like if you get the same result it's better to have a fixed cost you know about than an estimated billing amount that's open-ended and invariably goes over. Fixed fee work also introduces better opportunities for price competition and incentivizes finding efficiencies

[legends159]

From an in-house perspective - when we've capped fees, which is essentially like having a fixed fee, we notice that outside counsel is much less attentive and the service we receive declines when they're getting close to that fee cap. If we do a fixed fee, I highly doubt the firms won't run an internal billing rate to see when they're getting close to the fixed fee so they can either (a) renegotiate a higher fee or (b) focus of other clients' work.

However, non-lawyer management would prefer capped fees or fixed fees because it's easier to budget and forecast. Plus they're used to such fee arrangements with other consultants/investment bankers.

[Desert Fox]

[El Pollito]

Yea in my experience its the clients who are pushing us to do all sorts of crazy shit. Asking for sudden updates. Trying to push new arguments and strategies. Finding needles in a haystack.

And firms have encouraged those sorts of demands by being very accommodating, but only because its how they get paid $$$$$$$$$$$$$.

If suddenly the business model is fixed fee, you are going to be push back on needle in the haystack stuff. Which, TBH, is probably the right move on cases with lowish max risk. Case where damages are pretty much going to be under 80 mil. Probably okay to do a 5 mil fixed fee case. Cases with a 2 billion dollar risk? Well it doesn't matter they look under every stone and run the bill up to 7 mil. They might find something.

clients are asking for soooo much free shit

[OneMoreLawHopeful]

Yea in my experience its the clients who are pushing us to do all sorts of crazy shit. Asking for sudden updates. Trying to push new arguments and strategies. Finding needles in a haystack.

And firms have encouraged those sorts of demands by being very accommodating, but only because its how they get paid $$$$$$$$$$$$$.

If suddenly the business model is fixed fee, you are going to be push back on needle in the haystack stuff. Which, TBH, is probably the right move on cases with lowish max risk. Case where damages are pretty much going to be under 80 mil. Probably okay to do a 5 mil fixed fee case. Cases with a 2 billion dollar risk? Well it doesn't matter they look under every stone and run the bill up to 7 mil. They might find something.

clients are asking for soooo much free shit

Pretty much.

Last year I was asked to write a quick motion because the client told the partner "We don't want to pay partner time for something low level like this." I write the motion and we win. A month later the same client asks for my hours on that motion to be written off because "We shouldn't have to pay for first year time."

Translation: I'm a client and think I deserve free labor.

[Anonymous User]

Yea in my experience its the clients who are pushing us to do all sorts of crazy shit. Asking for sudden updates. Trying to push new arguments and strategies. Finding needles in a haystack.

And firms have encouraged those sorts of demands by being very accommodating, but only because its how they get paid $$$$$$$$$$$$$.

If suddenly the business model is fixed fee, you are going to be push back on needle in the haystack stuff. Which, TBH, is probably the right move on cases with lowish max risk. Case where damages are pretty much going to be under 80 mil. Probably okay to do a 5 mil fixed fee case. Cases with a 2 billion dollar risk? Well it doesn't matter they look under every stone and run the bill up to 7 mil. They might find something.

clients are asking for soooo much free shit

Pretty much.

Last year I was asked to write a quick motion because the client told the partner "We don't want to pay partner time for something low level like this." I write the motion and we win. A month later the same client asks for my hours on that motion to be written off because "We shouldn't have to pay for first year time."

Translation: I'm a client and think I deserve free labor.

Related to this, I have the impression that many clients don't pay for small routine assignments like NDAs.

[Tiago Splitter]

Yea in my experience its the clients who are pushing us to do all sorts of crazy shit. Asking for sudden updates. Trying to push new arguments and strategies. Finding needles in a haystack.

And firms have encouraged those sorts of demands by being very accommodating, but only because its how they get paid $$$$$$$$$$$$$.

If suddenly the business model is fixed fee, you are going to be push back on needle in the haystack stuff. Which, TBH, is probably the right move on cases with lowish max risk. Case where damages are pretty much going to be under 80 mil. Probably okay to do a 5 mil fixed fee case. Cases with a 2 billion dollar risk? Well it doesn't matter they look under every stone and run the bill up to 7 mil. They might find something.

clients are asking for soooo much free shit

Pretty much.

Last year I was asked to write a quick motion because the client told the partner "We don't want to pay partner time for something low level like this." I write the motion and we win. A month later the same client asks for my hours on that motion to be written off because "We shouldn't have to pay for first year time."

Translation: I'm a client and think I deserve free labor.

Related to this, I have the impression that many clients don't pay for small routine assignments like NDAs.

At my firm they cap the NDA charges at some really low number of hours so you can imagine what the demands are on NDAs.

[Monochromatic Oeuvre]

Part of me thinks DPW memo was a note to other firms as if to say, "we're not raising base salaries so don't look to us". It's like avoiding being a cartel while being a cartel. I'm sure they would match but they won't lead.

DPW is very image conscious. They are a conservative white shoe firm and they build their culture around genteel client service. Tom Reid has discussed bonuses with groups of juniors on occasion and explained (in his view) that the firm could afford and all things equal would like to compensate junior associates better with higher bonuses or salary, but they have to be extremely sensitive to clients' impressions, and it's a bad look when the client hears about the firm making it rain for associates whose work is of dubious value in the first place. That's why they are more comfortable raising compensation for mid-levels, but even there its a tough balance. So I think the bonus memo, as with everything else, was actually directed towards clients as a PR stunt.

Of course, another one of Tom Reid's goals is to increase PPP by a wide margin by 2020. So it's a catastrophically flawed set of priorities.

I know we've been talking about assholes all thread, but man, what a fucking asshole.

The firm has fucking exploded over the past six years (PPP up over 70%!) and we would totally give you a piece of that growth but OH THINK OF THE CLIENTS they'll angrily call us wondering why associates can suddenly afford to buy a house!

LJL at the fucking transparency of telling associates they can't get better bonuses because of client pressure and then turning around and telling clients you have to raise rates by another 4% because of associate bonuses.

[Dafaq]

Mainly a question for first years. Is anyone going to have a fun with their $$ (if so, what)? Or is the $ mainly going toward tuition or something practical?

[dixiecupdrinking]

Let's all be honest here, the best Christmas present your firms could give you isn't another $10k, it's a reminder that they don't give a shit about you so you should try to find something else to do ASAP

[krads153]

this thread has gotten so depressing

I've been in the office since 6 am yesterday so it sounds kind of nice actually.

agreed. my practice is busy AF.

same

2400-2500 on the year mostly in Q3-Q4 LEGGGOOOOOO

2695 as of today.

lol do you guys all work at wachtell or something?

[Big Shrimpin]

this thread has gotten so depressing

I've been in the office since 6 am yesterday so it sounds kind of nice actually.

agreed. my practice is busy AF.

same

2400-2500 on the year mostly in Q3-Q4 LEGGGOOOOOO

2695 as of today.

lol do you guys all work at wachtell or something?

noap

but plz kill me now thx

[anonnymouse]

this thread has gotten so depressing

I've been in the office since 6 am yesterday so it sounds kind of nice actually.

agreed. my practice is busy AF.

same

2400-2500 on the year mostly in Q3-Q4 LEGGGOOOOOO

In b4 Twiqbal? Dat rush to use Form 18...

[2014]

Part of me thinks DPW memo was a note to other firms as if to say, "we're not raising base salaries so don't look to us". It's like avoiding being a cartel while being a cartel. I'm sure they would match but they won't lead.

DPW is very image conscious. They are a conservative white shoe firm and they build their culture around genteel client service. Tom Reid has discussed bonuses with groups of juniors on occasion and explained (in his view) that the firm could afford and all things equal would like to compensate junior associates better with higher bonuses or salary, but they have to be extremely sensitive to clients' impressions, and it's a bad look when the client hears about the firm making it rain for associates whose work is of dubious value in the first place. That's why they are more comfortable raising compensation for mid-levels, but even there its a tough balance. So I think the bonus memo, as with everything else, was actually directed towards clients as a PR stunt.

Of course, another one of Tom Reid's goals is to increase PPP by a wide margin by 2020. So it's a catastrophically flawed set of priorities.

I know we've been talking about assholes all thread, but man, what a fucking asshole.

The firm has fucking exploded over the past six years (PPP up over 70%!) and we would totally give you a piece of that growth but OH THINK OF THE CLIENTS they'll angrily call us wondering why associates can suddenly afford to buy a house!

LJL at the fucking transparency of telling associates they can't get better bonuses because of client pressure and then turning around and telling clients you have to raise rates by another 4% because of associate bonuses.

There just unfortunately isn't a business reason for DPW or its peers to raise compensation until they start to lose associates faster than they can efficiently replace them. It's been discussed at length how jacking up comp wouldn't do anything for recruiting so it has to be about retention and that just doesn't seem to be any more or less of an issue this year than it has been the last four or so. Absent a business reason, all of the hope is in altruism and the market just doesn't function that way (though it does make the DPW memo about being charitable that much more ironic).

Plus even if a firm was altruistic, there is ALWAYS a business reason to raise PPP, especially at lockstep firms that rely on rainmakers taking (substantial) pay cuts to stick around, so the altruism would have to be pretty damn strong.

Tl;dr we need more NY people to exit IN MASS