[UPDATE: Moments after posting this story, we received an update. Follow the whole story but know that the moral of the story is that the firm reversed course after associates voiced concerns.]
It seems as though firms are committed to using the final week of 2022 to announce disappointing bonus news. After Shearman’s bonus match came attached with a new and previously unannounced hours requirement, another firm has put out a “match” that only applies to associates who exceed the long-standing hours benchmark.
The good news is that Foley Hoag is matching the market scale… for some people. As a reminder, here’s the market bonus scale that we’re talking about.
2022 $15,000 (prorated based on start date)
Counsel will be getting $125K.
BUT… this only applies to associates and Counsel in good standing who exceed 2000 billable hours this year. That’s a brand new requirement and a requirement that the firm is imposing retroactively. Per a tipster:
Most notable is Foley Hoag has had an 1850 billable target for years and that’s what is told to law students during recruiting. Even throughout this year, the firm acknowledged it was a generally slow year and that the billable target continues to be 1850.
However, as noted in the email memo, the new billable target is 2000 hours, which was announced on Dec 27 and applies retroactively.
For those who met the target that Foley Hoag asked associates to meet until this week, but didn’t meet the unannounced 2000 target, the firm is only issuing 70 percent bonuses. The memo does not do the math — probably because it doesn’t want to put these numbers in writing to be easily pasted into a future document that might alert prospective associates that the compensation figure comes with a heavy caveat — but we’ll do the math for them.
2022 $10,500 (prorated)
Counsel would get $87,500 in this scenario.
While this is better than stripping associates of bonuses altogether based on a last second ploy to foist the partnership’s pain of a bad year on the employees least responsible for the shortfall, it’s still a rotten way to end the year for associates who made their own business decisions this year based on the expectation that billing 1850 would put them in the firm’s good graces. More importantly, it pulls the rug out from under associates who stayed with the firm during a slow year thinking that they’d be getting that much needed student loan repayment balloon check.
So partial congrats, I guess?
The memo is reproduced on the next page.
UPDATE: But THEN, two days after issuing this bonus memo, the firm changed course. In a memo sent out today, the firm notes:
After issuing our memo describing the 2022 bonus policy earlier this week, a number of associates spoke to firm management about a memo issued in connection with the 2021 bonus policy that they believed applied to future years, including 2022. We are persuaded that this is a viable reading of the 2021 memo, and we think it is important to satisfy the good faith expectations of our exceptional associates and counsel, without whom the firm could not have achieved the successes of the past year. Therefore, for 2022, we will be following the 2021 policy by paying the “Cravath” scale to associates and counsel in good standing starting at 1850 billable hours, and by paying 70% of Cravath scale to associates and counsel in good standing with between 1700 and 1849.9 billable hours (and will pay Cravath scale to the class of 2021 regardless of billable hours). Bonuses below 1700 billable hours remain discretionary. Revised memos and additional payments will be issued shortly to impacted associates and counsel. We will revisit this issue for 2023, as it has always been the firm’s intention to address bonuses on a year-to-year basis. We apologize for the confusion, and once again thank everyone for their hard work this year.
Congratulations everyone and good for the firm for making it right!
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
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