There’s a fair amount of happy news at Bingham McCutchen right now. The firm is enjoying record profits and bringing in new talent. It once again made Fortune magazine’s list of best companies to work for (along with three other law firms).
And here’s some additional good news. Last year, Bingham experimented with a somewhat complex “merit-lockstep” hybrid approach to associate compensation. This year, Bingham is moving back to a simpler system.
Let’s take a look at what they’re doing….
As set forth in the memo from partner Anthony Carbone, with respect to base salary, Bingham is “returning to a single-scale base compensation program, effective January 1, 2011.” In terms of bonuses, the firm is using a scale based on the Cravath 2010 bonus scale — but with “special bonuses” on top of the base bonuses, designed to “recognize extraordinary efforts of some of our lawyers.”
We reached out to Tony Carbone, who spoke with us on the phone yesterday about Bingham’s retooled compensation plan.
“We designed this system in response to feedback from last year’s model,” said Carbone. “So far this year’s feedback has been generally very good. People are pleased by the greater certainty regarding their base compensation and bonus.”
“This system gives people some certainty, and it also gives people an opportunity to do better,” he added. “It’s a good system: if you’re performing well and have very strong hours, you’ll get compensated well.”
It seems like a sensible system. But one Bingham tipster, after noting the firm’s record profits, pointed out that the memo “made no mention of spring bonuses — even though bonuses are being paid March 16.”
We did inquire about this in our call yesterday. In response to our question about the spring 2011 bonuses being paid by Cravath and certain other firms, Carbone pointed out that the special bonuses reflect Bingham’s effort to reward top performers above the fixed bonus amount.
(So it’s not clear if Bingham plans to pay spring bonuses on top of what’s outlined in the memo. If it doesn’t, it won’t be alone, at least based on current market info. As we noted yesterday, the silence on spring bonuses is deafening.)
Here’s the Bingham memo. If you have a bonus memo that we haven’t covered yet, please send it our way; we’ve heard about fresh bonus announcements at a number of firms, but we need memos. Thanks.
BINGHAM MCCUTCHEN — MEMORANDUM — BASE COMPENSATION AND BONUSES
On behalf of the firm, I am pleased to share with you the 2010 bonus program and 2011 base salaries. The firm’s financial performance was strong in 2010, due in large part to the hard work and contributions of our counsel, associates and staff attorneys.
We developed the compensation program outlined below based on a variety of factors, including the firm’s financial performance, the feedback we received from our lawyers regarding last year’s program and the market trends for compensation.
For the 2010 billable year, bonus eligibility is again based on an hours threshold of 1950 billable hours, including up to 50 hours of pro bono time/2100 core hours. (For our lawyers working on designated pro bono matters, the 1700 billable/2100 core hours requirement applies.) In addition to hours worked, the quality of each lawyer’s work is of critical importance.
In an effort to recognize extraordinary efforts of some of our lawyers, a special bonus will be awarded by the practice area leaders on a case-by-case basis, in addition to the bonus amounts set forth below.
As in prior years, bonuses will be pro-rated in accordance with any partial-year hires, part-time arrangements and leaves of absence. Bonuses for staff attorneys will be determined on an individual basis and not in accordance with the schedule below.
Bonus amounts will be communicated during evaluation meetings, which will commence on Tuesday, February 8 and continue throughout the month. Bonuses will be paid to U.S. lawyers on March 16, 2011, and to lawyers in our London, Hong Kong and Frankfurt offices during the normally scheduled March payroll.
Class I – $7,500
Class II – $10,000
Class III – $15,000
Class IV – $20,000
Class V – $25,000
Class VI – $30,000
Counsel – $35,000
2011 Base Compensation
The firm will be returning to a single-scale base compensation program, effective January 1, 2011. In moving to a consistent base compensation model, we want to maintain our strong market position and reaffirm our one-firm approach, while recognizing the development of our associates and counsel. As always, whether an individual lawyer is promoted in class, or receives a base salary increase, is based upon quality of performance, strong hours and continued development of skills.
Class I – $160,000
Class II – $170,000
Class III – $185,000
Class IV – $210,000
Class V – $230,000
Class VI – $250,000
Counsel I – $265,000
Counsel II – $280,000
Counsel III – $290,000 / $300,000
Compensation for staff attorneys will be determined on an individual basis. Base salary adjustments, if applicable, will be communicated during evaluation meetings. Increases will be paid to our U.S. lawyers on March 16, 2011, and to lawyers in our London, Hong Kong and Frankfurt offices during the normally scheduled March payroll, retroactive to January 1, 2011.
We are pleased to be able to recognize and reward our lawyers with a strong compensation program. It reflects our continued investment in each of you, and appreciation for all of your efforts that contribute to our shared success. Following the completion of all of the individual evaluation meetings, we will conduct meetings in the local offices to answer any questions you may have. In the interim, if you have any questions, please do not hesitate to call me, Lynn Carroll or your Attorney Development Manager.
The Am Law 100: Revenue and Profits Hit Record Highs at Bingham [Am Law Daily]
Bingham Adds Saunders to White Collar Team [Bingham McCutchen (press release)]
Earlier: Annual ‘Best Companies to Work For’ List Includes Four Law Firms
Inside the Bingham McCutchen Bonus
Bingham McCutchen: Lockstep Base Pay, Merit Bonuses — It’s a Hybrid Plan That Seems to be Working