Orrick Herrington & Sutcliffe Keeps Associate-friendly Payment Policies

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Orrick Herrington & Sutcliffe seems to have found that elusive balance in compensation policy that fulfills the demands of productivity, man-hours billed, and transparency, all at the same time. Many seemed skeptical when in February Orrick announced its bonus policy for associates claiming to fix compensations based on the following criteria:

1. Work quality;
2. Productivity, including hours and efficiency;
3. Contribution to the practice group; and
4. Contribution to the Firm

It’s clear that Orrick Herrington has been able to juggle the equations and come out with fair compensation packages for associates, without sacrificing an iota of transparency. That by itself is no minor feat.

  

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Orrick Herrington & Sutcliffe 2011 Merit Bonus Distribution Table for All US Associates

	Associate	Managing Associate	Senior Associate
Range	#                     %	#                   %	#                 %
Less than $5,000	7                     7%	3                   3%	1                 1%
$5,000 – $14,999	53                  53%	12               14%	4                 6%
$15,000 – $24,999	40                  40%	22               25%	5                 7%
$25,000 – $34,999		38               43%	1                 1%
$35,000 – $44,999		13               15%	27             39%
$45,000 – $54,999			23             33%
$55,000 and above			9               13%
GRAND TOTAL	100              100%	88             100%	70           100%

According to the firm, barring those who joined after June 30, 2011, eighty percent of all US associates received a merit bonus, and the score is consistent with the percent of associates who received merit bonuses in 2010.

To further the balance of incentives vs. required criteria, Orrick created a “Time Lag Incentive Program” on the following lines to include time entry based performance:

• An incentive of $5000 for associates who released time on a daily basis, met other performance criteria, and had an annual average time lag of 1.09 or less
• An incentive of $3500 for associates who entered and released time on alternate days and had a time lag between 1.1 and 2.49
• Respectively 5% and 7.5% merit bonus reduction for associates who had an average time lag between 3.5 and 9.9, and those who had an average time lag of 10 days and more

On all counts, Orrick continues to lead the market when it comes to fair compensation and bonus packages of associates among the big law firms.