Associate Bonus Watch 2008, Salary Freeze

Associate Bonus Watch: Goodwin Procter Adopts Cravath Scale ... And A Salary Freeze

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Goodwin Procter just came out with their 2008 bonus news. Like other peer firms in Boston, Goodwin is going with a Cravath scale, though the firm does have a 1,850 hours requirement:

For 2008, we maintained our bonus eligibility threshold of 1,850 hours, though many of our peer firms set significantly higher thresholds for bonus eligibility this year. Attorneys who met the 1,850 threshold, which could be achieved through billable and pro bono work, were considered for bonuses, taking into account the factors noted above.

One very interesting note is that stub-first years will be receiving no bonus at all:

Target bonuses by class are listed below. Individual bonus awards may be above or below the targets based on the mix of relevant factors and will be prorated as appropriate for leaves. Because of their short tenure, attorneys in the class of 2008 who started in October were not included in the bonus program this year.

Onto the salary freeze after the jump.


When we reported that Ropes & Gray would not be freezing salaries, many Goodwin associates expressed hope that the salary freeze phenomenon wouldn’t make it off the MassPike.

Alas:

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Though Goodwin Procter weathered 2008 better than many of our peer firms based on accounts to date, the firm is not immune to the effects of the current global economic environment. We expect that the economy will continue to pose a challenge both to us and to our clients through 2009. While we believe that we are as well positioned as any firm to respond to these challenges, we also know that we must make prudent financial decisions to effect that outcome.

Accordingly, we have made the decision not to increase base salaries for 2009. Effective January 1, associates moving to the next class year will continue to receive the same base compensation they received in 2008.

Read the full memo below.

GOODWIN PROCTER — MEMO — 2008 BONUS & 2009 SALARY

On behalf of the partners, we would like to thank you for your contributions to the firm over the past year. As a firm, we were able to accomplish an enormous amount in 2008, notwithstanding the global market and economic turbulence. This was due in no small part to your efforts.

The following details the 2008 bonus determinations and sets forth our plans for establishing 2009 base salaries.

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Calendar Year 2008 Bonus

For calendar year 2008, we continued our practice of awarding bonuses based on a variety of factors – the quality of an attorney’s work, the amount of time spent on billable, pro bono and other approved credit work, and the nature of an attorney’s firm investment time and commitment to professional development.

For 2008, we maintained our bonus eligibility threshold of 1,850 hours, though many of our peer firms set significantly higher thresholds for bonus eligibility this year. Attorneys who met the 1,850 threshold, which could be achieved through billable and pro bono work, were considered for bonuses, taking into account the factors noted above.

Target bonuses by class are listed below. Individual bonus awards may be above or below the targets based on the mix of relevant factors and will be prorated as appropriate for leaves. Because of their short tenure, attorneys in the class of 2008 who started in October were not included in the bonus program this year.

2007 $17,500

2006 $20,000

2005 $22,500

2004 $25,000

2003 $27,500

2002+ $30,000

Bonuses for professional track attorneys were determined on an individual basis, rather than on the basis of the targets listed above. We will communicate to each associate and professional track attorney individually by January 25, 2009, regarding specific bonus determinations.

2009 Salaries

Though Goodwin Procter weathered 2008 better than many of our peer firms based on accounts to date, the firm is not immune to the effects of the current global economic environment. We expect that the economy will continue to pose a challenge both to us and to our clients through 2009. While we believe that we are as well positioned as any firm to respond to these challenges, we also know that we must make prudent financial decisions to effect that outcome.

Accordingly, we have made the decision not to increase base salaries for 2009. Effective January 1, associates moving to the next class year will continue to receive the same base compensation they received in 2008.

Although we suspect this may not be a surprise to many of you given the realities of the current market, we understand that it may be disappointing. However, we trust that you will understand that our actions on this matter are in the best interests of serving our clients, who are themselves under enormous financial pressure, and positioning the firm for the long-term.

While the breadth and depth of this economic recession are unprecedented in most of our careers, we can be confident of one thing – that it will eventually end and we will be telling war stories about it to the next generation of lawyers. So, I encourage you all to stay positive and to stay close to our clients who need our good judgment and committed services today more than ever.

Please do not hesitate to call me, or your Department or Practice leaders, with any questions or comments.

Earlier: Nationwide Layoff Watch: I’m Shipping Up To Boston

Prior ATL coverage of associate bonuses

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