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« Starting Law Firm Associate Salaries Rising Towards $200,000 | Main | Hold Law Firm Partners Accountable for Attorney Retention and Attrition »

Some Boies Schiller Associates May Have Hit the Jackpot

Last November, Boies Schiller announced that Visa Inc. had agreed to pay its client, American Express Co., as much as $2.25 billion to settle an antitrust suit. The firm had earlier announced that it was being compensated partially on contingency. Thus, on a $2.5 billion settlement, the firm's payoff is likely to be huge: a 5 percent fee, for example, would bring in $125 million.

As reported on Law.com, what is interesting about Boies Schiller is that it offers associates who work on contingency cases the opportunity to get a percentage of the future contingency fee if and when it's recovered in exchange for accepting a lower year-end bonus. With the American Express case, associates were offered a choice each year at bonus time. They could take the conservative route and have their annual bonus include the hours they devoted to this case. That way they'd be assured of getting some credit for those hours. The downside was that those hours would not be counted toward the contingency fee. The alternative option allowed associates to roll their hours on the case over to the next year. If and when the case paid off, they would receive a share of the contingency fee proportionate to those hours.

According to Boies, between a quarter and a half of the associates assigned to the American Express case chose to roll the dice and count their hours towards a share in the potential contingency fee. Some of those associates could now be looking at bonuses from the case of $1 million.

There are the kinds of innovative compensation arrangements that we think more law firms should be experimenting with.

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