Bay Street firms have always calculated bonuses by looking at one thing: how many hours an associate billed that year. But that era is over. A handful of firms now use a range of factors to decide if a lawyer is bonus-worthy. And Gowling Lafleur Henderson LLP is the latest firm to overhaul its bonus system. Starting this year, associates at the firm will, among other things, have to mentor students, deliver top-notch legal work and win over clients. We asked managing partner Peter Lukasiewicz to explain Gowlings’ new bonus equation.
Why did Gowlings decide that bonuses should reward more than billable hours?
Hours are only one indicator of effort. We realized we needed to expand our horizons and to let associates know we’re also going to look at the quality of those hours and their non-billable work.
How much do billable hours matter under the new structure?
Hours are still important. Every associate will have to bill a certain number of hours to be eligible for a bonus. That benchmark is 1,500 hours for first-years and 1,750 for all other associates.*
Everything other than hours — quality of work, effectiveness as a mentor — is subjective. Doesn’t that make controversy more likely?
There is no doubt that our new policy has a greater degree of qualitative assessment. But we think we’ve provided clear guidelines. When we meet with our associates, we’ll explain the reason behind their level of compensation.
Will you continue to give out the same amount in bonuses?
Like any organization, we budget every element of our business, including bonuses. But we don’t say, “Twelve months ago, we budgeted this amount of money, so we’re going to divide it all up.” It’s a bottom-up process. We look at the performance of the associates and the firm, decide what we think the appropriate amount is, and see what it adds up to.
*Since the publication of this article, Peter Lukasiewicz has clarified that, in fact, an associate at Gowlings is not required to meet the firm’s billable-hour target in order to be eligible for a bonus.
An associate that excels in a range of other areas could still receive a bonus, even if the lawyer does not meet the billable-hour quota for the year.
This story is from our Spring 2015 issue.
Photo by Margaret Mulligan