Arnold & Porter, Salary Freeze

Nationwide Salary Thaw: Arnold & Porter

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Ed. note: An earlier version of this post incorrectly stated that the firm has not yet communicated to its associates about salaries. This was correct as of late December, but shortly before the new year, the firm made its announcement. We have amended the post accordingly, and we apologize for the error.
It’s a brand new year. Yay. Will this be the year that the recession ends? We’re hopeful, as are you (based on the results of our reader poll thus far).
Here’s some good news to start off the day. A source at Arnold & Porter reports on the firm’s unfreezing of salaries (as well as lump-sum payments representing deferred comp):

Arnold & Porter just announced we are bumping one class year, plus those in good standing are getting their deferred 2009 compensation. Classes of 2008 and 2009 are both at $160,000 for 2010.

This salary thaw is certainly welcome news — but note that it doesn’t take A&P up to the full New York scale. In 2010, under the NYC scale, class of 2008 associates should be earning $170,000 (not $160,000), class of 2007 associates should be earning $185,000 (not $170,000), etc.
The full memorandum, which was issued on December 30, also confirms upcoming bonus payments:

Consistent with the Firm’s longstanding commitment to be competitive in the marketplace, the Firm will be paying bonuses to eligible associates in respect of their 2009 performance. The bonuses will be based not only on the number of billable, pro bono and business development hours but also with attention to the results of the associate review process, particularly the quality of work and whether an individual has performed at a level commensurate with his or her seniority. Compliance with Firm policies also will be taken into consideration.

What can be expected regarding bonuses at Arnold & Porter? A second tipster explains:

A&P pays no “base” bonus. Bonuses have traditionally been based on hours. Last year, I ended up with more than I would have on the standard New York scale. But some ended up with much less, or none.

Check out the full memo, after the jump.

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ARNOLD & PORTER — MEMORANDUM
To: All Associates
From: Thomas Milch
Richard M. Alexander
Date: December 30, 2009
Re: 2009 and 2010 Associate Compensation
This is to advise you of certain matters relating to 2009 and 2010 associate compensation.
I. Retrospective Adjustment for 2009
You will recall that when we planned for 2009, we were focused on the widespread economic uncertainty at that time and felt there was a need to approach 2009 compensation cautiously. Accordingly, we decided that it would be prudent to freeze salaries for all employees for 2009, including our associates then eligible for step increases. In making this announcement, we indicated that we would monitor the Firm’s financial performance and decide at year-end whether the Firm could make a payment to make up for all or part of the salary increase that had been deferred.
We are pleased to report that based on our current projections, we now expect that the Firm will exceed our net revenue projections for 2009. This is a significant accomplishment during a very challenging year. On behalf of the entire Partnership, we thank you for the work you did this year and the contributions you continue to make to the Firm and its clients.
In light of these results, the Management Committee, with the approval of the Policy Committee, has decided that all associates who were eligible to receive step increases on January 1, 2009 and who meet the criteria set forth herein, will receive a lump-sum payment representing the amount of the step increase that was deferred. To be eligible for this one-time payment, associates must have met our expectations for performance and productivity, as reflected in the individual feedback communicated by the Associates Committee, complied with Firm policies (including timekeeping) and otherwise be in good standing. This lump sum payment will be paid on December 31, 2009 and will be available in Petty Cash in the D.C. office and through the Office Administrators in non-D.C. offices.
II. Compensation Structure for 2010
All U.S. associates in good standing who meet the Firm’s performance expectations will move up one step in base salary from their 2009 base salary, effective as of the first full pay period in 2010. Similar adjustments will be made in the Firm’s U.K. and Brussels offices, within their respective compensation programs.
The 2010 associate base salary scale for the Firm’s U.S. offices will be as follows:
Class of 2009 – $160,000
Class of 2008 – $160,000
Class of 2007 – $170,000
Class of 2006 – $185,000
Class of 2005 – $210,000
Class of 2004 – $230,000
Class of 2003 – $250,000
Class of 2002 -$265,000
Class of 2001 and above – $280,000
We expect 2010 to be another challenging year in the legal profession and we will need to monitor the workload of all of our lawyers carefully to ensure that there is a correlation between contribution and compensation. In this regard, we will be holding meetings with all associates in January to discuss the Firm’s performance expectations, including billable hours goals and participation in pro bono and business development activities.
III. 2009 Bonuses
Consistent with the Firm’s longstanding commitment to be competitive in the marketplace, the Firm will be paying bonuses to eligible associates in respect of their 2009 performance. The bonuses will be based not only on the number of billable, pro bono and business development hours but also with attention to the results of the associate review process, particularly the quality of work and whether an individual has performed at a level commensurate with his or her seniority. Compliance with Firm policies also will be taken into consideration.
We will provide you with further details about the 2009 bonus program after the first of the year. These bonuses will be paid early in 2010 in all offices.
Happy New Year to all.
Earlier: Salary Thaw Structure: A Chart!
Nationwide Pay Freeze Watch: Arnold & Porter & Scarlett O’Hara Decide ‘I’ll Think About it Tomorrow’

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