And I respond here (transcript) and here (podcast).
[Me:[ One of the things that started to happen before the Great Recession was, for example, I saw this most clearly in the rise of starting salaries to a $160,000 in New York and major markets-the elite firms, I think, were driving a stake in the ground saying, “We’re gonna make it tougher for wannabe firms to follow.”
Stephanie Francis Ward: And they succeeded.
Bruce MacEwen: Yeah, “We’re going to $160,000 because we can. And if you wanna suck it up and follow us, be my guest.” We might see something similar in bonuses in this environment.
Stephanie Francis Ward: Do you think these bonuses-are they the best way to reward associates, and do you think that bonus systems create better workers?
Bruce MacEwen: No, and no.
Stephanie Francis Ward: Why not?
Bruce MacEwen: You know, I may be old fashioned, but I’m a capitalist at heart, and I believe in meritocracies, and a lock-step compensation system, I don’t care if it’s ninety percent salary and ten percent bonus or fifty percent salary and fifty percent bonus, as long as it’s lock step for everybody, and there really is no merit involved, it’s not a way to motivate employees or to really generate people who want to get training and want to get better and better at what they do. It doesn’t matter within the bounds of competence and legality presumably, it doesn’t matter how you perform.
and
Stephanie Francis Ward: When you talk about that idea with clients, can you share with me what their reaction tends to be?
Bruce MacEwen: Clients find it preposterous the way we compensate associates. They simply do not understand how a compensation system can be divorced from performance factors. And by performance factors, I should hasten to add, I don’t mean billable hours. You can-I think you can have-well, I know because I’ve seen these people in action, I’ve worked with them-you can have somebody who bills 1,800 hours a year who’s really an excellent lawyer and somebody who bills 2,200 who’s just putting in the time and punching the clock, as it were.
Stephanie Francis Ward: Okay. So I want to make sure I understand you correctly. I know there has been a lot of talk about changing things with the firms, about how to compensate associates, not from client calls, but you’re saying that it’s mostly talk and that nothing has actually become action for the most part?
Bruce MacEwen: The only way we’ll know that it’s more than talk is when a firm begins to depart from the lock-step market. That’s the only thing, in my opinion, that will say there’s actually change afoot.
and
Stephanie Francis Ward: Well, have you had a chance to speak with many of the associates about what they think about bonuses and what do you think they would prefer? Do they like these lock-step bonuses, or maybe they’d prefer something else as well?
Bruce MacEwen: You know, law students and associates are-well, they’re lawyers in the making, and they are extremely risk adverse. I find this odd, just on a personal level, because I’m not. But it’s true. And you’re kidding yourself if you think it’s otherwise. So I think they prefer, in a way, the certainty of lock step. You would think-I mean, I certainly grew up thinking that anything that was a race to the top I was going to do fine, thank you. But that’s not the way the majority of students and associates think-that I’ve spoken to-think. They would rather make sure that they’ve got the bird in the h
and, if you will.
Stephanie Francis Ward: I would think ones who are entrepreneurial in nature would prefer it the other way, but I don’t know how long those types are going to stick around the big firms, for the most part.
Bruce MacEwen: That, you’ve put your finger on it. If you do have an entrepreneurial bent, I think you will find that there aren’t too many people like you in big law, and you’ll either lose your entrepreneurial bent or you’ll leave. And frankly, we need a lot of entrepreneurs in the country right now, so I’m hoping most of those people leave.
