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Bingham Unveils Details on ‘Hybrid’ Associate Compensation Plan

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  • Bingham Unveils Details on ‘Hybrid’ Associate Compensation Plan

    There’s more than one way to compensate law-firm associates.

    After a zillion years of doing it the same way, law firms are branching out, mixing up the formula. Some are deciding they’d rather go heavy on the merit-based component. Others are deciding that well, we’ll stick with lockstep for now.

    Still others are going hybrid. Which brings us to Bingham McCutchen.

    The firm back in October revealed it would be going to a model that paid base salaries mostly on a lockstep basis, but made end-of-year bonuses merit-based. Click here for that post, from Above the Law’s Elie Mystal.

    On Tuesday, the firm filled in the details on its plan.

    For starters, the firm is “unfreezing” base salaries for the more productive associates, bringing associates who bill more than 1900 hours back up to pre-freeze levels. For now, the firm will keep salaries at the same level for all those who bill between 1500 and 1900 hours.

    Second, the firm is rolling out two different pay scales based on these billable targets. Associates who bill at least 1900 hours in a year will qualify for the upper pay scale, one largely commensurate with what the leading firms pay. Associates who bill between 1500 and 1900 hours will be paid less.

    The firm’s still hammering out the details on its bonuses, but they’ll be largely pegged to merit. The top bonuses, we hear, will be in line with the Cravath levels announced late last year. In some instances, bonuses might even be higher.

    Reads the memo, authored by partner Anthony Carbone:
    As you know from various discussions and presentations over the course of the last several months, we have moved our compensation program to a merit lockstep approach. This approach provides the flexibility to recognize the strong performance of our attorneys and their contributions to the firm, while ensuring a level of predictability and stability. Additionally, we will be awarding merit bonuses to eligible attorneys for their accomplishments in 2009. Individual bonus amounts will be conveyed during evaluation meetings, which will commence this week. In determining bonus amounts for each attorney, a variety of factors are being considered, including achievement of the hours target, quality of an attorney’s work, as well as pro bono and firm citizenship contributions.

    As for the numbers, they go like this:

    For associates and counsel who have annualized 1900 billable hours or more (inclusive of 50 pro bono hours):

    Class I - $160,000
    Class II - $170,000
    Class III - $185,000
    Class IV - $210,000
    Class V - $230,000
    Class VI - $250,000
    Counsel I (7th year associate) - $265,000
    Counsel II (8th year associate) - $280,000
    Counsel III (9th year associate) - $290,000

    For associates and counsel who have annualized 1500 billable hours or more (inclusive of 50 pro bono hours):

    Class I - $160,000
    Class II - $165,000
    Class III - $170,000
    Class IV - $185,000
    Class V - $210,000
    Class VI - $230,000
    Counsel I - $250,000
    Counsel II - $265,000
    Counsel III - $280,000

    Law Blog Query to Readers of the Day: We’re hearing that increasingly 7th-9th year associates are being referred to as “counsel.” Especially on the west coast. This is not to be confused with the “of counsel” labels traditionally bestowed upon those who graduate from the associate level, but don’t quite make it to partner.

    Is this really happening? Are 7th year associates morphing into “counsel?” And if so, why? To make them feel better about the fact that had they been at a law firm 30 years ago, they’d have already made partner?

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