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Bingham's New Compensation Plan: A License to Take It Easy?
Both Above the Law and the Wall Street Journal Law Blog reported yesterday on the long awaited details of the so-called "hybrid" compensation system announced by BigLaw powerhouse Bingham McCutchen (which apparently lost the crossbar from its "A" in a post-announcement celebration). Elie Mystal's post on ATL reprints the Bingham memo in its entirety, so I don't have to. The firm has established two tracks for base pay, which is the lockstep aspect of the hybrid, one for associates billing 1,900 hours, and another for those who billed between 1,500 and 1,900.
All fine and good. But what of the fact that the difference in salary between an associate who hit the higher number and one who didn't is relatively minor, all things considered? Let's take a "Class IV" associate (presumably referring to a fourth-year) as an example, because the difference in salary is greatest at that level. A fourth-year who billed 1,500 hours gets a base salary of $185,000, whereas one who billed 1,900 starts at $210,000. Doing a little quick math (and triple-checking myself using two different calculators), our 1,500-hour associate comes out with 88 percent of the 1,900-hour associate's salary for doing 79 percent of the "work." "Work" in quotes, because far be it from me to suggest that billable hours is a perfect proxy for amount of actual work done.
Mathematically speaking, this doesn't seem unreasonable. But any BigLaw veteran will tell you that the difference between a 1,900-hour year and a 1,500-hour year -- or, taking a more realistic example, a 2,200-hour year and an 1,800-hour year -- is night and day. Associate commiseration sessions are often peppered with statements to the effect that, "I'd gladly take a pay cut if I could only wear jeans to work work semi-human hours." Traditionally, this wasn't an option. Now, it seems it might be.
The Bingham memo addresses only 2010 compensation, and, of course, the "merit-based" bonus calculation is still sort of a black box, though hours are listed as one factor. When the new system was announced back in October, though, it sounded like it was here to stay. Though the target numbers may change, is it a good idea for BigLaw to sanction a path for those who don't necessarily aspire to being the highest billers in their classes?
Posted by Eric Lipman on February 10, 2010 at 10:21 AM | Permalink
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