From the vantage point of a lowly associate, counsel and income partners seem like they occupy a different compensation universe — and to some extent, that’s true! — but with senior associates bagging 100K+ bonuses, take a moment this Biglaw bonus season to remember all the counsel out there watching senior associates blow by them in comp right before the annual finish line.
This isn’t true of all counsel of course. Some firms reward special counsel with the top bonus tier, or provide some kind of off-grid individualized bonus commensurate with experience level. But many more are left out of the big bonus game entirely.
We write some version of this story every year, but it deserves to remain top of mind. Especially when you consider that at some firms this disparity takes on an additional problematic dimension as women and minority attorneys are often shunted into these roles to pad “partner” ranks for pitching clients but without sharing the equity pot of gold.
It may shock some associates out there who recognize the experience that talented counsel bring to the table, but counsel compensation ultimately comes down to the firm’s philosophy about bonuses. If bonuses are intended to reward attorneys for their value to the firm, counsel deserve massive payouts on a lot of levels. On straight up firm profitability, these are lawyers getting billed out at near partner-level rates while being paid as super-senior associates. That’s the best deal for a firm’s bottom line second only to the super-cheap first and second years billed out well beyond what their experience would dictate. Beyond the profitability, there’s also tremendous substantive value. There’s absolutely some 40 Act specialist out there who is downright essential to every deal but won’t make partner because clients don’t hire firms based on that expertise. For firms that approach bonuses with the “reward” model — whether they pay individualized or take a lockstep approach to spread the reward across the firm — counsel are going to be fine.
But to a lot of firms, bonuses are just a variable piece of maintaining market compensation. It’s less a reward than a necessity for firms committed to keeping pace with their peers in the never-ending battle for associate talent. At the point that an attorney has left the grid, the calculus changes. The attorney faces a difficult battle making partner at a peer firm. Taking a step down for another charge at the ring is an option, but probably entails a short-term comp cut and golden handcuffs are real. The bottom line is that in most cases the firm knows that they’ve got that senior attorney for the long-haul.
Not that it’s a terrible limbo to be in. Counsel are generally compensated better than associates with the exception of the most senior classes with bonuses putting them over the top. But not always. Tipsters tell us that some firms even pay counsel below senior associate base salaries. Others pay counsel in the low $400Ks. Anarchy reigns in the world of counsel.
The point is, take a second to consider the plight of the attorneys you work with who have a decade or more of experience and have to watch cub attorneys make nearly as much as they do because market pressures trump merit. And, while you’re at it, take a moment to honestly assess your own career as an associate. Are you really on track to become a partner at your current firm? If not, would you be comfortable building your career there as counsel?
Anyway, happy holidays and appreciate your counsel!
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.