Determining a bonus for a small firm Forum

[Anonymous User]

I just started at a small boutique IP firm and am wondering how the bonus should be calculated. The firm consists of me and a managing attorney. Before I started, the managing attorney told me that I would be entitled to a bonus at the end of the year, but he was not very clear about how the bonus would be calculated. After I started, he told me that the bonus would be determined based on the amount of work I brought to the firm (from my own clients). The firm gets a lot of referrals from former clients and other professionals who know the managing attorney. The firm also has a PR group that it works with and who help us identify prospective clients.

Calculating a bonus based on the amount of clients I bring in doesn't seem right to me because it overlooks the importance of the quality of work. For one thing, it seems difficult to determine whether a client came to the firm as a result of a referral from someone the managing attorney knew vs. a client that came to the firm because the firm is now effectively offering more services (I have experience in an area of law that the managing attorney was not really focusing his practice on).

I understand that more clients=more billable hours and this might be one rationale for basing the bonus on number of clients. But it just seems like it is too hard to determine who brought what client in. What if I give a talk on the area of law a practice (where the seminar was set-up by the firm or a group that the PR agency referred us to) and my talk results in a new prospective client? Wouldn't that be directly attributable to my efforts?

Does anyone have any insight into how small firm bonuses are typically calculated?

[anon168]

I just started at a small boutique IP firm and am wondering how the bonus should be calculated. The firm consists of me and a managing attorney. Before I started, the managing attorney told me that I would be entitled to a bonus at the end of the year, but he was not very clear about how the bonus would be calculated. After I started, he told me that the bonus would be determined based on the amount of work I brought to the firm (from my own clients). The firm gets a lot of referrals from former clients and other professionals who know the managing attorney. The firm also has a PR group that it works with and who help us identify prospective clients.

Calculating a bonus based on the amount of clients I bring in doesn't seem right to me because it overlooks the importance of the quality of work. For one thing, it seems difficult to determine whether a client came to the firm as a result of a referral from someone the managing attorney knew vs. a client that came to the firm because the firm is now effectively offering more services (I have experience in an area of law that the managing attorney was not really focusing his practice on).

I understand that more clients=more billable hours and this might be one rationale for basing the bonus on number of clients. But it just seems like it is too hard to determine who brought what client in. What if I give a talk on the area of law a practice (where the seminar was set-up by the firm or a group that the PR agency referred us to) and my talk results in a new prospective client? Wouldn't that be directly attributable to my efforts?

Does anyone have any insight into how small firm bonuses are typically calculated?

That's not a "small firm" that's a solo practitioner, which means your bonus, if any, is determined by that managing partner's whims and wishes.

[Anonymous User]

That's not a "small firm" that's a solo practitioner, which means your bonus, if any, is determined by that managing partner's whims and wishes.

Slightly condescending, but thank you for the information.

If the criteria for earning a bonus really doesn't matter, does it make sense to solidify anything in writing (I.e. a client brought on by me will be considered for a bonus but a client brought on through a seminar arranged through the efforts of the managing director is not)?

[anon168]

That's not a "small firm" that's a solo practitioner, which means your bonus, if any, is determined by that managing partner's whims and wishes.

Slightly condescending, but thank you for the information.

If the criteria for earning a bonus really doesn't matter, does it make sense to solidify anything in writing (I.e. a client brought on by me will be considered for a bonus but a client brought on through a seminar arranged through the efforts of the managing director is not)?

What difference would it make if you had it in writing? With or without a contractual obligation of some sort, would you really bring a lawsuit against your employer for dissing you on a bonus that you thought you deserved?

Assuming the answer is "no" then why poison the well and relationship by making an issue out of this? If you don't get a bonus that you think you deserve this year, then start exploring other opportunities.

No need to pour gasoline on a bridge that you're still driving on.

[Olive83]

OP, speaking from personal experience, it can be pretty arbitrary. Generally speaking, if he values you and your firm can afford it, he will give you a bonus that makes you want to stay. I am willing to bet that he can guess what that number is. If you don't think so, don't be afraid to take him to lunch and tell him what that number is, using a "performance check-in" as a guise. If you then don't get the bonus you deserve, it may be time to move on, especially if you have your own clients who may go with you. HTH!