The law firm of Goodwin Procter is in the news these days. Some of the firm’s top trial lawyers are defending Mathew Martoma — formerly of SAC Capital and Harvard Law School, where he famously falsified a transcript — in one of the biggest and most exciting insider-trading cases in history.
(Fun fact: one of the members of Martoma’s trial team, Roberto Braceras, is the son-in-law of Judge José A. Cabranes. So if the Martoma case ever winds up before the Second Circuit, Judge Cabranes may have to recuse.)
Martoma earned millions while at SAC Capital, and some of that money will be making its way into the coffers of Goodwin Procter. And some of that money will then get paid out as associate bonuses, which the firm recently announced….
The firm’s bonus memorandum, reprinted in full on the next page, went out last Friday from partner Scott Webster, chair of Goodwin’s attorney review committee. After thanking Goodwin lawyers for their hard work — and taking note of “the industry-wide flat demand for legal services and today’s somewhat unpredictable business environment” — the memo explains the bonus policy:
Associates in good standing who met the 1,950 hour threshold and professional track attorneys in good standing who met their hours requirements during our fiscal year ending September 30, 2013 through annualized billable work, pro bono work and legal advice to the firm, and for first year associates shadow training time, are eligible to receive bonuses. Since bonuses are based on performance during our fiscal year ending September 30, 2013, recently hired attorneys (including associates in the Class of 2013) are not eligible to receive bonuses.
This is consistent with last year’s policy, but note this positive change:
In addition, as [chairman] Regina [Pisa] and [managing partner] Rob [Insolia] announced on December 11, 2013, we will count all pro bono hours the same as billable hours for bonus purposes. The firm has decided to apply this policy retroactively for fiscal year 2013, in recognition of the firm’s continued commitment to pro bono.
Kudos to Goodwin for reaffirming — and, in fact, strengthening — its commitment to public interest work. See also the firm’s public interest fellowships for law students (and note the application deadline of March 14 — the date of ATL’s big Attorney@Blog conference, by the way).
The memo goes on to note the individualized nature of Goodwin Procter’s bonuses:
The firm’s compensation philosophy for all attorneys is to reward both hard work and high-quality work. In order to accomplish this, the percentage of the class bonus amount listed below that each associate will receive is determined based on the associate’s rating generated by ARC and his or her hours. The same weight is given to each component for each associate class to ensure consistency and fairness in bonus awards across the firm. Since bonuses reflect both hours worked and quality of performance, some highly-rated attorneys will receive bonuses below the class bonus because they worked fewer hours than many of their peers. Likewise, many attorneys will receive more than the class bonus in recognition of outstanding contributions and hard work.
The “class bonus amount listed below” refers to the market aka Cravath scale, which the memo reprints. As for how many associates will do better or worse than the market rate:
This year, 33% of associates receiving a bonus will receive an amount that is greater than the amount listed below for their class, 35% will receive their class amount, and 32% will receive less than their class amount. The average bonus is 102% of the class amount.
The bonus memo then announces the 2014 base salary scale. No surprises here; it’s the same $160K to $280K scale that has prevailed in Biglaw since the Simpson Thacher-led pay raise (announced on January 22, 2007 — seven years ago yesterday). Can associates at least get a cost of living adjustment?
But let’s not dwell on the negative; on the whole, the Goodwin Procter news is good. Flip to the next page to read the firm’s commendably clear and detailed bonus memo.