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Bingham's New Compensation Plan: A License to Take It Easy?

By Eric Lipman

Both Above the Law and the Wall Street Journal Law Blog reported yesterday on the long awaited details of the so-called "hybrid" compensation system announced by BigLaw powerhouse Bingham McCutchen (which apparently lost the crossbar from its "A" in a post-announcement celebration). Elie Mystal's post on ATL reprints the Bingham memo in its entirety, so I don't have to. The firm has established two tracks for base pay, which is the lockstep aspect of the hybrid, one for associates billing 1,900 hours, and another for those who billed between 1,500 and 1,900. All fine and good. But what of the fact that the difference in salary between an associate who hit the higher number and one who didn't is relatively minor, all things considered? Let's take a "Class IV" associate (presumably referring to a fourth-year) as an example, because the difference in salary is greatest at that level. A fourth-year who billed 1,500 hours gets a base salary of $185,000, whereas one who billed 1,900 starts at $210,000. Doing a little quick math (and triple-checking myself using two different calculators), our 1,500-hour associate comes out with 88 percent of the 1,900-hour associate's salary for doing 79 percent of the "work."...

Full post as published by Legal Blog Watch on February 10, 2010 (boomark / email).