Associate Salaries, Bonuses, Salary Cuts, Salary Freeze

MoFo Back to 160k! And Good Bonus News.

American Apparel MoFo.jpgIs Biglaw getting over the gloom of the recession? Back in October, Morrison & Foerster was feeling pessimistic about attorney salaries. It decided to cut salaries for first-year associates from $160,000 to $145,000. Only associates in pricey New York and Asia — MoFo has offices in Beijing, Hong Kong, Shanghai and Tokyo, all expensive cities — were spared the cut.

The firm said at the time:

Note, however, that the market for first year salaries among national firms is undetermined at this time. Given that, we will continue to assess starting salaries, in light of market trends, and may elect to adjust as required based on larger market developments.

Well, MoFo has assessed, and MoFo has decided to beef up its salaries. Associates got news this week that first year salaries are back up to $160k. And the raise is retroactive to January 1st. From the firm email that went out on Tuesday, available in full after the jump:

Although a great deal of uncertainty continues regarding how the economy will perform in 2010, we, like our most successful competitors, remain in demand. We are planning conservatively for 2010. However, if 2009 is a predictor, 2010 will provide opportunity despite its challenges.

MoFo is known for being a little quirky. In keeping with its individualistic streak, it’s decided to buck the Cravath scale for its 2009 bonuses. Bonuses range as high as $65,000, but only if you clocked the requisite number of hours.

Additional good news: Pro bono hours count…


According to the firm-wide email, bonuses for associates in non-NYC offices range from $7,500 to $65,000 and are discretionary based on “three factors: performance, Efficient Legal Service Hours, and seniority.” Here are the ranges:

Non-New York U.S. Structure
2009 Bonuses by Salary Class
Salary Class Bonus (range per class)
2008 $7,500 -$35,000
2007 $7,500 – $40,000
2006 $7,500 – $45,000
2005 $10,000 – $55,000
2004 $10,000 – $55,000
2003 $10,000 – $65,000
2002 $10,000 – $65,000

MoFo associates we’ve heard from are pleased, even though senior associates may end up with smaller bonuses than they would get on the lockstep Cravath scale (a guaranteed $25k or $30k).

According to Sara Randazzo at the Daily Journal, the hours benchmark was 1950, and it includes pro bono work:

Chair Keith Wetmore said the bonus range does not include a few dozen associates who received higher bonuses for billing more than 2,300 hours. The standard for most associates to be bonus-eligible was 1,950 hours, including pro bono work.

Meanwhile, the firm is setting up a two-tier track for 2010 salaries, with a more lucrative track for those who hit minimum hours:

1st 2009 $160,000 $160,000
2nd 2008 $170,000 $165,000
3rd 2007 $185,000 $170,000
4th 2006 $210,000 $185,000
5th 2005 $230,000 $210,000
6th 2004 $250,000 $230,000
7th 2003 $265,000 $250,000
8th 2002 $280,000 $265,000
9th 2001 $290,000 $280,000

MoFoers, enjoy the moola.
MORRISON & FOERSTER FIRMWIDE EMAIL
From: Wetmore, Keith C.
Sent: Tuesday, February 16, 2010 9:01 AM
Subject: 2009 Associate Bonuses/2010 Associate Compensation (U.S. Comp Structure)
To: All Associates and Of Counsel on the U.S. Compensation Structure
Following up on my January memo to you announcing that the firm had exceeded its net income budget, I want now to confirm the bonuses to be paid with respect to 2009, and to announce 2010 base compensation and 2010 bonus structure for all associates on the U.S. compensation structure.
All bonus amounts will be paid in the February 26 payroll; base salary increases will be retroactive to January 1 and will also be paid in the February 26 payroll. In the interest of being concise I have not included eligibility requirements and other important details applicable to bonuses and base compensation that can be found in the Compensation and Evaluation Brochure.
Although a great deal of uncertainty continues regarding how the economy will perform in 2010, we, like our most successful competitors, remain in demand. We are planning conservatively for 2010. However, if 2009 is a predictor, 2010 will provide opportunity despite its challenges. I thank each of you at every level of seniority for your contributions and excellent work on behalf of our clients.
2009 Bonuses
The New York discretionary bonus amounts were previously announced, and the New York 2009 step increase for each class will be paid as a contribution bonus to eligible associates as previously announced. Bonus amounts for associates in U.S. offices other than New York, and for associates based in international offices and paid in accordance with the non-New York U.S. structure, were informed by taking into account the step increases paid in 2009 by some, but not all firms, and the bonuses already announced for 2009 in various markets. Individual bonus amounts reflect three factors: performance, Efficient Legal Service Hours, and seniority, and will be paid in the following ranges:
Non-New York U.S. Structure 2009 Bonuses by Salary Class
Salary Class Bonus (range per class)
2008 $7,500 -$35,000
2007 $7,500 – $40,000
2006 $7,500 – $45,000
2005 $10,000 – $55,000
2004 $10,000 – $55,000
2003 $10,000 – $65,000
2002 $10,000 – $65,000
Bonus amounts vary by class year and were increased for those associates who met 2100 or 2300 Efficient Legal Service Hours (1900 and 2300 hours for patent associates) in 2009. In addition, bonus amounts at the various hours levels were increased for those associates who were evaluated as performing at an Enhanced or High level by their Evaluation Committee during the fall annual evaluation process. Approximately 10% of evaluated non-New York associates were given a High designation and a further approximately 25% were given an Enhanced designation. Lateral associates who joined the firm after June 1, 2009 and other associates not included in the 2009 annual evaluation process were not eligible for Enhanced or High designations. An additional amount was paid (in some cases in excess of amounts shown in the chart above), on a discretionary basis, to certain associates significantly in excess of 2300 Efficient Legal Service Hours.
Associates outside of New York who are receiving bonuses will be notified today or tomorrow of their bonus amounts and, as applicable, Enhanced or High designations. Of Counsel bonuses are individualized, and eligible Of Counsel will be notified of their bonus amount today or tomorrow.
2010 U.S. Structure Base Compensation and Bonuses
Starting salaries for the Class of 2009 will be increased to $160,000 effective as of January 1, 2010, to be consistent with developments in the market.
Salaries for associates who progressed with their class based on their 2009 evaluation, and met the annual minimum Efficient Legal Service Hours expectation for 2009, will increase two steps. Associates who progressed with their class but did not meet the minimum Efficient Legal Service Hours expectation for 2009 will receive a single step increase, and be eligible for the additional step increase as a contribution bonus payable in 2011, assuming progression with one’s class and meeting the Efficient Legal Services Hours expectation in 2010. Lateral associates who joined the firm after June 1, 2009 will receive step increases solely on the basis of 2009 hours, prorated as appropriate. Associates in salary class 2008 and earlier who joined the firm on or after September 1, 2009 will receive two step increases.
2010 Associate Base Compensation
(U.S. Offices, U.S. Practice Attorneys)
2010 Calendar Year 2010 Salary Class 2010 Base Compensation for Associates Who Progressed with Class At least minimum for 2009 Below minimum for 2009
1st 2009 $160,000 $160,000
2nd 2008 $170,000 $165,000
3rd 2007 $185,000 $170,000
4th 2006 $210,000 $185,000
5th 2005 $230,000 $210,000
6th 2004 $250,000 $230,000
7th 2003 $265,000 $250,000
8th 2002 $280,000 $265,000
9th 2001 $290,000 $280,000
With respect to 2010 bonuses, if the firm achieves its net income budget approved by the partners for 2010, the 2010 discretionary annual bonus in New York will be determined at year end or in early 2011, taking into consideration comparable annual bonuses in the New York market, and outside New York, we anticipate paying bonuses based on a combination of performance, as determined through the associate evaluation process, and hours.
Of Counsel compensation is individualized and 2010 arrangements generally will be finalized by March 15, 2010.
QUESTIONS
If you have any questions about the 2009 bonuses or 2010 base compensation, please direct them to your Associate Representative who will add them to agenda for the next Associate Representative call with members of firm management, scheduled for February 24. We will prepare and distribute a Q&A following that meeting. Contact Cheryl Moser, Managing Director of Practice Administration, if you have a question about your individual bonus or base compensation.
Earlier: Nationwide Salary Cut Watch: MoFo Cuts in California, Spares NYC
Nationwide Bonus Watch: MoFo Giveth, Then Taketh Away

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