Each year my law firm distributes performance bonuses to associates. Unlike in New York (including at my firm’s New York office), where all associates at top-tier law firms receive the same bonus in a lock-step structure, the bonuses in DC are not automatic and are meant to reward overall contributions to the firm, taking into consideration both the quantity and quality of billable work, as well as participation in pro bono work, client development, firm committee work, willingness to volunteer for assignments, involvement with recruiting, and other factors. Normally only about half of the eligible associates in any given year receive a bonus, and of those who do, the amount of the bonus can vary enormously.
Unfortunately, the bonus process is opaque in its application. Given the variety of factors that we’re told are taken into consideration, and the fact that no further explanation is provided when bonuses are awarded, it’s hard to know how to modify your behavior to maximize your chances of a good bonus. Plus, bonus awards in any given year can seem arbitrary and contradictory. For example, I did not receive a bonus after my first year, but I received a modest one after my second year, despite the fact that I couldn’t see any meaningful difference in the quality or quantity of my contribution during the respective years. This makes it difficult to interpret what message (if any) is being sent by the firm with a bonus (or lack of bonus). Ironically, the result is that the bonus has little incentive power for me — since it isn’t clear to me which activities (other than billable hours) are valued by the firm, I’m less inclined to do anything other than billable work. I do enough of the non-billable work to maintain credibility as a “firm citizen” and “team player,” but otherwise, if it’s not billable, I don’t do it. I don’t work for free.
The firm apparently has no complaints about this strategy. I logged an enormous number of billable hours last year (more than anyone else I’ve talked to at the firm), and my bonus, which I just received, was commensurate in size. At roughly 25% of my base salary for last year, it was one of the biggest in the firm (the only associates who got bigger bonuses were considerably more senior than me, and my secretary, who has all sorts of inside scoops, says that I’m the only one at my seniority level who got this amount). So management can say what they want about the value of firm citizenship and professional pride — it is clear to me that what the firm values is people who make the firm money. I suspected as much; nice to have this confirmation.
The weird thing is that the size of the bonus seems almost irrelevant. In part, that’s due to the fact that bonuses are taxed at a much higher rate than ordinary income — because of those taxes, I pocketed less than half of the face value of the bonus (talk about a let down!), so the face value ends up feeling hollow. But even apart from the taxes, the amount of the bonus seems irrelevant from more of a psychological perspective. I mean, it would have been highly relevant had I not gotten anything or if it had been too small. But the fact that I got the highest bonus I could get feels more like a meeting of expectations rather than anything special. Kind of like getting an “A” in school — as far as I was concerned, the teacher didn’t deserve a pat on the back for giving me an A when I knew I had given A quality work. Likewise, the firm doesn’t deserve particularly warm feelings for acknowledging with a monetary award that I worked like a fiend last year — because that’s what I expect them to do if they want to keep me working here.
As nice as it is to have some additional funds in the bank (watch out student loans!), at the end of the day it doesn’t change the fact that during the past year I worked essentially all the time, to the exclusion of nearly all other non-work activities. For a good portion of the year, I stopped singing, running, seeing my friends. Was the trade-off worth it? I think the answer so far is yes (because I’m still here), but only because I’ve gotten much more out of work than just a paycheck and a bonus. In working as much as I did, I learned a lot about my profession and myself, I had the satisfaction of doing something interesting and challenging, and I built good relationships with my colleagues and my clients. Those are benefits that can’t be bought with money (recognizing, as well, that there were costs that cannot be compensated with money).
[P.S. Writing about money in a quasi-public forum like this blog might strike some people as vulgar or insensitive. I recognize that I am very well compensated and that this bonus alone is more than some people (many of whom work just as hard as I do) make in an entire year. My goal in writing this post is not to complain or to be cavalier or ungrateful for the financial blessings I’ve received. As with anything I write here, my objective is only to share what I’m thinking about and experiencing with family members and friends who I want to be part of my life but who otherwise wouldn’t be because of geography and over-booked schedules.]