Over the summer, Boies Schiller & Flexner made big news when they announced a revamped associate compensation system. Gone, if the associates opted in, was the firm’s traditional bonus formula that includes a revenue share component that affords associates a cut of the matters they work on, which for contingency work can be quite generous indeed, in favor of a market rate system (complete with a 2,000 billable hour requirement).
As part of that change, the firm promised associates raises to the prevailing market rate in June. But then they pushed back the raise date to October 15th. Then again it was moved to the end of October. And now it’s November, and… nothing.
As an insider tells Law.com:
More senior attorneys topped out at $330,000. It’s unclear whether any of Boies Schiller’s offices were already paying associates at that level prior to the raise announced earlier this year. But for associates on lower pay scales in markets such as Florida, the raises announced this summer would have amounted to “tens of thousands” of dollars, one former partner said.
“Boies Schiller had promised to raise associate salaries to Cravath NY scale firm-wide starting in June, then they sent a memo pushing that back to October, then they pushed back October salary payments from 15th of October to end of month, now the associates are really upset because October payments also did not reflect raises,” the former partner said.
This series of payment delays has reportedly sparked concerns at the firm of cash flow issues. Those fears are supercharged by a series of partner departures — more than 40 thus far — from the firm earlier this year. And of course, the firm has said they’re in the midst of a larger transition phase, as the relatively young Biglaw firm anticipates a world where the name partners are no longer practicing, slow moving as that transition may be.
BSF hasn’t commented on the delays, but it will be interesting to watch the compensation machinations at the firm.
Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).