Davis Polk Racks Up Another Year of Hefty Bonuses

For the second year in a row, Davis Polk & Wardwell LLP has broken its precedent with bonuses to most of its associates at the end of 2017. Davis Polk, a white-shoe New York City law firm, raised associate bonuses across the board in 2016 after the firm’s partner profits hit record highs. That pattern continued this year as partner profits were once again up significantly, along with the bonuses awarded to partners and associates alike.

Breaking down the bonuses

# The latest year-end bonuses at Davis Polk totaled $3.6 million, with the average associate getting an award of just over $7,000 and more than half receiving a bonus of over $10,000. One partner got a whopping $400,000

# Partners’ 2016 earnings will be boosted by three other bonuses in addition to the year-end one: The Chairman’s Award ($35,000), a special Partner Appreciation Award ($25,000), and another nonrecurring one-time cash award totaling up to $150,000.

# Over 100 lawyers contributed more than 600 hours of pro bono work to fight poverty and social injustice throughout the last 12 months.

The billable hour culture

In the olden days, a lawyer would be compensated with salary, commissions, and perks. Nowadays it’s all about billable hours. And if your firm is anything like Davis Polk (home to the highest reported law school debt in America),

you’ll be expected to work until you’ve racked up 60-plus hours per week. Not surprisingly, these expectations often lead to higher rates for those hourly workhorses than their salaried counterparts at the same firm. Bonus culture has also shifted accordingly–rather than one or two golden eggs gifted annually by senior partners for doing an exceptional job (e.g., drafting a complicated merger agreement),

lower-tier associates now receive an annual golden goose payout as well for hitting time thresholds for each hour billed.

A word on alternative business models

While Davis Polk is up there with the highest bonuses, it still might not be good enough for some people. Here are a few reasons why you may want to consider going into business for yourself:

-Flexibility -There is no set pay rate in a law firm, and they often do not offer bonuses. Being self-employed, you are your boss so you can make your schedule, charge what you want, and choose your hours.

-Enjoyment -Some people might enjoy being an entrepreneur more than being employed by someone else. In the world of entrepreneurship, nobody tells you what to do all day long; it’s up to you! Plus that sense of ownership can feel great.

Toward more inclusive firms

Davis Polk’s bonus scale is not indicative of how firms work. Consulting jobs and law firm jobs are two different entities with entirely different risks and benefits. For one, consulting jobs pay on an annual basis, whereas law firms are lump sum. But the way that a firm should compensate its staff is by the job duties.

Law firms and consulting firms alike are always looking for new talent, especially with a more diverse workforce. There’s never been a better time to enter either industry because there’s plenty of opportunity out there.

But even though law firm jobs can pay up to six figures in bonuses and have considerably less stress than consulting jobs, it isn’t fair that everybody gets paid based on their seniority. The way Davis Polk determines its bonus scale is completely wrong since every lawyer there should be getting paid what they’re worth — regardless of their length of service.

How firms can attract talent by doing good in their communities

A key way to attract talent is by highlighting what your firm is doing in the community. To achieve this, firms can do a variety of things including donating time or resources to a cause that aligns with its values. For example, at Davis Polk people are encouraged to use their skills to volunteer for a cause that they are passionate about in their free time.

Sometimes companies will even match employee donations of up to $5000. Creating initiatives like these makes employees feel valued and motivated and help build social capital within the company. This goodwill also helps firms build their brands while also providing tangible value to society-even if it’s just one small aspect of their business-and boosts morale.

Furthermore, fostering a culture that helps employees feel more involved and motivated with their work is important for retaining top talent. In addition to volunteering at events in their free time, Davis Polk also offers unique incentive-based benefits like bonuses for above and beyond employee performance.

For example, when an employee reached retirement age, he wasn’t expected to stop working; instead, he was offered an opportunity to continue working at Davis Polk on a part-time basis as an Emeritus Lawyer. This is not just a great gesture for retirees but also helps keep these former employees happy and invested in firm life while still being able to enjoy retirement—something most can only dream about!

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