New Type of Associate Compensation - Two Salary Scales Based on Hours?

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New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Anonymous User » Mon Jul 19, 2021 4:47 pm

My firm is considering moving to a two-tier associate compensation system similar to Crowell and Moring's recent setup: https://news.bloomberglaw.com/us-law-we ... hire-scale and https://abovethelaw.com/2021/07/crowell-raises/

What do you guys think of this system? I think our system will be like 1700 and 1900 hours for the cutoffs.


EDIT: Poster below was correct that the hours targets are actually 1600 hours and 1900 hours and the reduced pay will be about 20%. Not feeling as great about this as I was before.
Last edited by Anonymous User on Tue Jul 20, 2021 7:34 pm, edited 2 times in total.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by Anonymous User » Mon Jul 19, 2021 5:58 pm

Anonymous User wrote:
Mon Jul 19, 2021 4:47 pm
My firm is considering moving to a two-tier associate compensation system similar to Crowell and Moring's recent setup: https://news.bloomberglaw.com/us-law-we ... hire-scale and https://abovethelaw.com/2021/07/crowell-raises/

What do you guys think of this system? I think our system will be like 1700 and 1900 hours for the cutoffs.
Heck yeah, I'd take last year's salary (i.e. pre-205K raise) with a 1700 billable requirement. I think this is great and will help with associate retention. A lot of firms offer flex or part time programs, but despite efforts to prove otherwise, it still feels like there's a stigma attached to working on a flex schedule as a midlevel/junior associate.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by Anonymous User » Mon Jul 19, 2021 7:14 pm

I think OP and I may be at same firm, but if not, would like input with the following details I got from a senior associate:

For context note that our current billable requirement is 1850 and our firm always matches and is at the top in its secondary markets and is a top firm for midlaw in the market cities.

The new hours requirement in order to get market pay scale (not DPW scale as we are midlaw) is 1900 hours and the second tier is going to be 1600 hours with a 20% LESS pay difference.

No collar or cushion around those numbers so if you are 5 hours short of 1900, you will have a 20% pay cut the next year.

If you are on tier 2 and bill over 1600 (and even if you bill over 1900) you will get a bonus but that is it and the firm clarified it won't be enough to make you whole as if you were on the tier 1 scale.

You don't get to choose it just happens based on hours.

The firm told us that a little more than half of its associates are in that 1600-1900 middle range, so to me this seems like they are essentially NOT giving a raise to half of its associates despite cost of living, peer firms, inflation and so on.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by DukeMountain » Mon Jul 19, 2021 11:24 pm

This looks like a pretty obvious path to cut 75% of their associates pay by 20% while marketing great work life balance.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by Anonymous User » Tue Jul 20, 2021 10:52 am

DukeMountain wrote:
Mon Jul 19, 2021 11:24 pm
This looks like a pretty obvious path to cut 75% of their associates pay by 20% while marketing great work life balance.

Ya this is not a salary raise. It's a way of paying high billers more for billing more.

Good luck with staffing at the end of the year. If you're behind on hours and know you won't hit 1900, then why would you work past 1600? LOL

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Anonymous User » Tue Jul 20, 2021 12:43 pm

weird to me for firms to frame the yearly billables of associates as something driven by choices the associates make, rather than staffing they're forced into

sure, I am wrong if they let someone that has no work and is past their choice threshold categorically turn down further billing, but I feel like that would get anyone fired or explicitly warned after a few months? idk.

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Best » Tue Jul 20, 2021 1:30 pm

Winstead does this. They have three tracks (I think 1600, 1800, and 2000). Allegedly, all can make partner. They give a salary bonus if you reach the next hour cutoff (but I don't think it makes you whole) in addition to the normal annual bonuses. In response to a prior post, you choose your hour cutoff at the start of the cycle. You're still paid that salary if you miss your hourly target.

I have no idea how it works in practice. How do partners treat you if you choose 1600? Can you actually make partner at 1600?

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Anonymous User » Tue Jul 20, 2021 2:29 pm

Wow, 1600 to 1900? Umm 300 hours is a big range to have associates fall into which means the associates at your firm will risk overworking for less pay.

My prediction is that this will create a lot of tension between the 1900 associates and the 1600 associates. If I am placed in 1600 class, you can count on me not doing more than that which means the 1900 associates will be overworked.

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by DukeMountain » Tue Jul 20, 2021 2:39 pm

Anonymous User wrote:
Tue Jul 20, 2021 2:29 pm
Wow, 1600 to 1900? Umm 300 hours is a big range to have associates fall into which means the associates at your firm will risk overworking for less pay.

My prediction is that this will create a lot of tension between the 1900 associates and the 1600 associates. If I am placed in 1600 class, you can count on me not doing more than that which means the 1900 associates will be overworked.
Idk how you wouldn’t spend most of your time turning down work if you only need to hit 133 hrs a mo

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Anonymous User » Tue Jul 20, 2021 5:38 pm

DukeMountain wrote:
Tue Jul 20, 2021 2:39 pm
Anonymous User wrote:
Tue Jul 20, 2021 2:29 pm
Wow, 1600 to 1900? Umm 300 hours is a big range to have associates fall into which means the associates at your firm will risk overworking for less pay.

My prediction is that this will create a lot of tension between the 1900 associates and the 1600 associates. If I am placed in 1600 class, you can count on me not doing more than that which means the 1900 associates will be overworked.
Idk how you wouldn’t spend most of your time turning down work if you only need to hit 133 hrs a mo

This is a lose lose situation because a 20% reduced schedule on 1900 hours is 1520 hours... so associates are getting underpaid even if they hit their 1600 hours. Who is this firm? NAME AND SHAME

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by existentialcrisis » Tue Jul 20, 2021 10:18 pm

I'm incredibly suspicious of things like this, especially in any kind of transactional practice.

You often just don't have enough control over your work flow to say "hey, I'm only doing 1700 hours this year."

It's also possible, especially for a junior, to bill a really miserable 1700 hour year, depending on how the peaks and valleys shake out.

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by nerd1 » Wed Jul 21, 2021 12:33 am

existentialcrisis wrote:
Tue Jul 20, 2021 10:18 pm
I'm incredibly suspicious of things like this, especially in any kind of transactional practice.

You often just don't have enough control over your work flow to say "hey, I'm only doing 1700 hours this year."

It's also possible, especially for a junior, to bill a really miserable 1700 hour year, depending on how the peaks and valleys shake out.
Agreed. In my first year at a V30 in NYC doing transactional work some years ago, I had a crazy busy 1800 hour year because I was quite slow for the first 6 months of that year and then things picked up from July (billed over 350 in that month). I was constantly busy for the rest of that year.

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Anonymous User » Wed Jul 21, 2021 3:48 am

Associates already have enough pressure put on them to meet their billable hours requirement. There's no need for it to potentially cost them tens of thousands of dollars too.

Pretty shitty for a firm to come out with a policy like this when we've all read about or know someone or even experienced firsthand the burnout and mental health breakdowns TLSers are posting about on here weekly.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by Anonymous User » Wed Jul 21, 2021 3:21 pm

Anonymous User wrote:
Mon Jul 19, 2021 7:14 pm
The firm told us that a little more than half of its associates are in that 1600-1900 middle range, so to me this seems like they are essentially NOT giving a raise to half of its associates despite cost of living, peer firms, inflation and so on.
That's exactly what's happening. When biglaw was still recovering from the 2008 crash a few lower-ranked firms adopted similar comp structures, e.g. 160k for 1900+ and 130k for 1600-1900. The practical effect was a salary cut for many associates since things were slow.

Also, yet another data point showing that most associates are not billing 2400+, despite what the partners want you to think. IMO there's little reward for being at a sweatshop when you can go somewhere else and earn a good salary while billing a lot less.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by Anonymous User » Wed Jul 21, 2021 7:24 pm

Anonymous User wrote:
Wed Jul 21, 2021 3:21 pm
Anonymous User wrote:
Mon Jul 19, 2021 7:14 pm
The firm told us that a little more than half of its associates are in that 1600-1900 middle range, so to me this seems like they are essentially NOT giving a raise to half of its associates despite cost of living, peer firms, inflation and so on.
That's exactly what's happening. When biglaw was still recovering from the 2008 crash a few lower-ranked firms adopted similar comp structures, e.g. 160k for 1900+ and 130k for 1600-1900. The practical effect was a salary cut for many associates since things were slow.

Also, yet another data point showing that most associates are not billing 2400+, despite what the partners want you to think. IMO there's little reward for being at a sweatshop when you can go somewhere else and earn a good salary while billing a lot less.

Did those firms do it temporarily or keep it around?

I wonder if people will see right through this for what it really is or if they'll buy the "flexible lifestyle approach" marketing the firm will wrap around this when it hits Above the Law.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by Anonymous User » Wed Jul 21, 2021 9:39 pm

Anonymous User wrote:
Wed Jul 21, 2021 7:24 pm
Anonymous User wrote:
Wed Jul 21, 2021 3:21 pm
Anonymous User wrote:
Mon Jul 19, 2021 7:14 pm
The firm told us that a little more than half of its associates are in that 1600-1900 middle range, so to me this seems like they are essentially NOT giving a raise to half of its associates despite cost of living, peer firms, inflation and so on.
That's exactly what's happening. When biglaw was still recovering from the 2008 crash a few lower-ranked firms adopted similar comp structures, e.g. 160k for 1900+ and 130k for 1600-1900. The practical effect was a salary cut for many associates since things were slow.

Also, yet another data point showing that most associates are not billing 2400+, despite what the partners want you to think. IMO there's little reward for being at a sweatshop when you can go somewhere else and earn a good salary while billing a lot less.

Did those firms do it temporarily or keep it around?

I wonder if people will see right through this for what it really is or if they'll buy the "flexible lifestyle approach" marketing the firm will wrap around this when it hits Above the Law.
My understanding is that most firms moved away from that structure. The associates felt the impact right away when they had their salaries cut involuntarily, and associates from those firms were openly negative about it during OCI, in my experience.

That said, lower-ranked firms already do plenty to suppress associate salaries by paying below-market bonuses (often zero for hitting 2000 hours and below-market for 2100+), by abandoning lockstep raises, and by denying raises to associates who don't meet their hours.

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Anonymous User » Thu Jul 22, 2021 12:28 pm

nerd1 wrote:
Wed Jul 21, 2021 12:33 am
existentialcrisis wrote:
Tue Jul 20, 2021 10:18 pm
I'm incredibly suspicious of things like this, especially in any kind of transactional practice.

You often just don't have enough control over your work flow to say "hey, I'm only doing 1700 hours this year."

It's also possible, especially for a junior, to bill a really miserable 1700 hour year, depending on how the peaks and valleys shake out.
Agreed. In my first year at a V30 in NYC doing transactional work some years ago, I had a crazy busy 1800 hour year because I was quite slow for the first 6 months of that year and then things picked up from July (billed over 350 in that month). I was constantly busy for the rest of that year.

I too have experienced the hell that is a 1800 or 1850 year that had me in the office as much as my 2200+ colleagues. I can't imagine the morale level if I got a pay cut after that year (or not a market step like my peers) and expected to work 1900+ while being paid less.

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Re: Two-Tier Associate Comp. Scale - Thoughts?

Post by Anonymous User » Thu Jul 22, 2021 12:43 pm

Anonymous User wrote:
Mon Jul 19, 2021 7:14 pm
I think OP and I may be at same firm, but if not, would like input with the following details I got from a senior associate:

For context note that our current billable requirement is 1850 and our firm always matches and is at the top in its secondary markets and is a top firm for midlaw in the market cities.

The new hours requirement in order to get market pay scale (not DPW scale as we are midlaw) is 1900 hours and the second tier is going to be 1600 hours with a 20% LESS pay difference.

No collar or cushion around those numbers so if you are 5 hours short of 1900, you will have a 20% pay cut the next year.

If you are on tier 2 and bill over 1600 (and even if you bill over 1900) you will get a bonus but that is it and the firm clarified it won't be enough to make you whole as if you were on the tier 1 scale.

You don't get to choose it just happens based on hours.

The firm told us that a little more than half of its associates are in that 1600-1900 middle range, so to me this seems like they are essentially NOT giving a raise to half of its associates despite cost of living, peer firms, inflation and so on.
Dorsey?

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Re: New Type of Associate Compensation - Two Salary Scales Based on Hours?

Post by Anonymous User » Wed Jul 28, 2021 4:51 am

Bumping post above. Interviewing at Dorsey and wondering if this is just a guess or if you have some inside knowledge?

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