A recent article by Amy Kolz of The American Lawyer reports on this year's "spring bonus" system for associates. This past January, a firm-wide email went out at Sullivan & Cromwell announcing spring bonuses to be given based upon an associate's class year, as a result of the firm's improved associate activity and profits per partner in 2010.
When other firms learned of the spring bonus plan, many jumped on board and paid their associates a spring bonus, too.
Does law firm management need an overhaul? Is "management" even an appropriate term, when associates are given little guidance, their compensation structure is based solely upon the year they graduated from law school or what other big law firms are paying their associates?
According to the article, law firm managers think newly minted lawyers and young associates cannot tell the difference between firms, so they need to keep in step with other firms in terms of 'top compensation' in order to attract the best candidates or retain associates.
But what about training, job satisfaction, interesting work? And what does placing emphasis on bonuses and 'top compensation' do for the future of the practice?
I'm not against firms sharing the windfall of a good year with associates and staff, and I think it sets a good precedent and can help build loyalty, particularly where those bonuses are unexpected, although I think in many instances providing a bonus based purely on the year an associate graduated from law school can be problematic.
In my consulting practice, partners and law firm leaders and managers often complain about the lack of motivation and drive of their young associates. They complain that associates are more focused on compensation and benefits than on learning the practice and doing a good job for clients. But what are these firm leaders doing to develop, train and support their associates? Is it any wonder that associates cannot tell the difference between firms when they play 'follow the leader' in this way?
When firms place their emphasis on billable hours and reward only in dollars, it isn't hard to understand why associates become disenchanted and put in less effort on the job. If firms want associates to see differences and to value being a part of their practice, they have to make some effort to distinguish the experience of working there without relying solely on compensation.
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