Associate Bonus Watch 2010, Biglaw, Bonuses, Money

Associate Bonus Watch: MoFo Admits New York Is Still Too Early To Call

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On Sunday, Morrison & Foerster sent around its associate bonus memo. For non-New York associates, the news is that the numbers are loosely based on the old Cravath scale, with some compression for mid-level associates. The actual bonus amount paid to any particular associate is determined based on performance factors. But in a nice show of transparency, MoFo also reported the bonus range and average bonus payment for each class year.

The numbers don’t look too bad, especially adjusting for the cost of living outside of New York City.

Inside New York City, MoFo is taking a wait-and-see approach. As we mentioned yesterday when talking about Weil, the stand-off between Cravath and Sullivan & Cromwell over spring bonuses has paralyzed the New York bonus market. For all we know, S&C is preparing to top Cravath in old-school “bonus wars” fashion.

Wisely, MoFo has decided not to get caught up in all of that drama; it’s just going to wait until New York sorts itself out. Let’s look at the memo…

Here are the key parts from the Morrison & Foerster bonus memo, sent to all associates by chairman Keith Wetmore (whom I may have a man-crush on):

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Following up on my December 31 voicemail 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 2010 and to announce 2011 base compensation for all associates on the U.S. compensation structure. All 2010 associate bonuses and base salary increases will be paid with the February 15 payroll; base salary increases will be retroactive to January 1. We will be distributing individual bonus memos on February 9 and 10 to associates outside of New York.

2010 was an outstanding year in many respects, with clients calling upon us for their most complex legal needs; and, like many of our clients, we are emerging from this recession with increasing demand for our services in virtually all of our markets. I thank each of you at every level of seniority for your dedication and your excellent work on behalf of our clients.

2010 Bonuses – Non-New York

Evaluation Bonuses will be paid to eligible associates in Salary Class years 2008 and more senior on the U.S. compensation structure outside New York. Individual Evaluation Bonus amounts reflect three factors: performance as determined through the evaluation process, Efficient Legal Service Hours, and seniority, and will be paid in the following ranges:

  • Class: [Bonus Range], Average
  • 2008: $7,500 – $45,000, $16,842
  • 2007: $10,000 – $55,000, $23,865
  • 2006: $10,000 – $55,000, $22,579
  • 2005: $15,000 – $60,000, $32,698
  • 2004: $15,000 – $60,000, $32,597
  • 2003: $20,000 – $65,000, $44,556
  • 2002: $20,000 – $65,000, $41,636

The Salary Class of 2009 is not included in the Evaluation Bonus program, but eligible members of that class will be paid a First Year Bonus ranging from $7,500 to $15,000 (with the average First Year Bonus being $12,487) based on Efficient Legal Services Hours.

A special bonus ranging from $10,000 to $20,000 will be paid to associates with Efficient Legal Service Hours in excess of 2500; these bonuses are not reflected in the chart above.

And here’s the key information about New York:

2010 Bonuses – New York

In New York we will be paying the New York Bonus to all eligible associates as previously announced. We are aware of at least four firms in New York that have announced an additional bonus and will continue to monitor the market.

We seem to might be back to the days where associates in New York will get more compensation than associates elsewhere. Probably not enough to account for the cost of living, but still, it must feel good when some acknowledgment is given for the financially ruinous premium people pay to live in Manhattan (and you know, other boroughs we can smell from Manhattan and stuff).

Feel free to monitor Above the Law for your latest bonus market information. And if you think we’re missing anybody, send us an email at tips@abovethelaw.com or text us at (646) 820-TIPS.

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Earlier: Prior ATL coverage of associate bonuses

MORRISON & FOERSTER — MEMORANDUM — ASSOCIATE BONUSES AND COMPENSATION

From: Wetmore, Keith C.
Sent: Sunday, February 06, 2011
To: LIST/Non-Partner Atty/ALL
Cc: LIST/Partner/ALL; Directors of Admin and Office Admin/All; Attorney Development Group; Moser, Cheryl L.
Subject: 2010 Associate Bonuses/2011 Associate Compensation (U.S. Comp Structure)

To All Associates and Counsel on the U.S. Compensation Structure:

Following up on my December 31 voicemail 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 2010 and to announce 2011 base compensation for all associates on the U.S. compensation structure. All 2010 associate bonuses and base salary increases will be paid with the February 15 payroll; base salary increases will be retroactive to January 1. We will be distributing individual bonus memos on February 9 and 10 to associates outside of New York.

2010 was an outstanding year in many respects, with clients calling upon us for their most complex legal needs; and, like many of our clients, we are emerging from this recession with increasing demand for our services in virtually all of our markets. I thank each of you at every level of seniority for your dedication and your excellent work on behalf of our clients.

2010 Bonuses – Non-New York

Evaluation Bonuses will be paid to eligible associates in Salary Class years 2008 and more senior on the U.S. compensation structure outside New York. Individual Evaluation Bonus amounts reflect three factors: performance as determined through the evaluation process, Efficient Legal Service Hours, and seniority, and will be paid in the following ranges:

Evaluation Bonuses will be paid to eligible associates in Salary Class years 2008 and more senior on the U.S. compensation structure outside New York. Individual Evaluation Bonus amounts reflect three factors: performance as determined through the evaluation process, Efficient Legal Service Hours, and seniority, and will be paid in the following ranges:

The Salary Class of 2009 is not included in the Evaluation Bonus program, but eligible members of that class will be paid a First Year Bonus ranging from $7,500 to $15,000 (with the average First Year Bonus being $12,487) based on Efficient Legal Services Hours.

A special bonus ranging from $10,000 to $20,000 will be paid to associates with Efficient Legal Service Hours in excess of 2500; these bonuses are not reflected in the chart above.

2010 Bonuses – New York

In New York we will be paying the New York Bonus to all eligible associates as previously announced. We are aware of at least four firms in New York that have announced an additional bonus and will continue to monitor the market.

2010 Bonuses – Contribution Bonus

In addition, as previously announced, associates who received a single step increase in base compensation in 2010, and who met their Efficient Legal Services Hours expectation in 2010, will be paid a contribution bonus in 2011 in the amount of the deferred additional step increase.

2011 Associate Base Compensation

2011 associate base compensation for those on the U.S. compensation structure will be paid according to a single base pay scale, by Salary Class year, as shown below.

Of Counsel

Of Counsel compensation is individualized; 2011 arrangements will be finalized between now and April 30. 2010 bonuses for Counsel will be paid with the February 15 payroll.

Questions

After receipt of your individual memo, please contact Cheryl Moser, Managing Director of Practice Administration, if you have a question about your individual bonus or base compensation. If you have general questions about the 2010 bonuses or 2011 base compensation structure, please direct them to your Associate Representative in anticipation of meetings with the Associate Reps which we will hold on February 23 (at both 9:30 a.m. and 4:30 p.m. Pacific), or to your Attorney Development Manager.

Keith C. Wetmore | Chair
Morrison & Foerster LLP | www.mofo.com

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