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Criteria for attorney bonuses: individual and company performance, but what about departmental?

InsideCounsel, April 2007 at 59, takes a look at several surveys of in-house compensation. One of the items looks at the criteria for bonus determinations. Data from the survey conducted annually by Hildebrandt International (this blogger’s firm) shows that 90 percent of in-house attorneys were eligible in 2005 for a bonus and that 96 percent of those who were eligible received a bonus.

Nearly every law department assigns a target bonus range to its attorneys (91% do so) and bases the amount of the bonus on several factors. Individual performance counts for 85 percent of the companies; company performance counts for even more law departments (95%), and business unit performance accounts for some part of some bonuses (52%). What surprises me is that the performance of the law department as a whole, such as whether it hit its budget or grasped its goals, is not reported as a determinant of bonus awards.

My view is that of the three determinants of bonus for in-house lawyers that ought to be major a reasonable distribution would be 40 percent company results, 40 percent individual achievement, and 20 percent departmental performance.

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