GOODWIN PROCTER — MEMORANDUM — 2015 BONUS PROGRAM AND 2016 COMPENSATION FOR U.S. ASSOCIATES
From: Wheeler, Virginia C On Behalf Of Weiss, William J.
Sent: Friday, January 15, 2016 4:46 PM
To: Weiss, William J.
Cc: DG-ARC; DG-Partners All; DG-Attorney Development Managers; DG-BU Directors ; Silva, Elizabeth T; Gill, Catherine W
Subject: 2015 Bonus Program and 2016 Compensation – US Associates
2015 BONUS PROGRAM AND 2016 COMPENSATION
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On behalf of the firm and its partners, I would like to thank each of you for your contributions to the firm over the past year. The firm had another record year, notwithstanding continuing constraints in the legal market. This was due in no small part to your hard work and commitment for which the partners are grateful.
This memo outlines the 2015 bonus determinations, describes the firm’s plans for 2016 base salaries and provides an overview of bonus eligibility for 2016.
2015 Bonus
For calendar year 2015, we continued our practice of awarding bonuses based on a combination of factors – legal excellence; the amount of time spent on billable, pro bono, legal advice to the firm and shadow training; overall productivity and efficiency; the nature of investment time; and commitment to professional development and diversity initiatives.
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Associates in good standing who met the 1,950-hour threshold during our fiscal year ending September 30, 2015 through annualized billable, pro bono work, legal advice to the firm and shadow training are eligible to receive bonuses. Since bonuses are based on performance during our fiscal year ending September 30, 2015, newly hired associates (including the Class of 2015) are not eligible to receive bonuses.
The 2015 U.S. associate bonuses are determined by reference to the bonus scale listed below. As in past years, individual bonus awards in each class may be above or below these “class” amounts based on an evaluation by ARC of the factors described above. These determinations are made as follows:
1. We use a simple grid, with hour ranges for the columns and merit ratings for the rows. Each box in the grid contains a percentage that is multiplied by the relevant class amount.
2. The same grid is used for all U.S.-based associates and for all class years, although the percentage for those with a Meets Basic Expectations rating is lower for the more senior classes than it is for the more junior classes.
3. Those with a Distinctive rating this year will receive more than the full class amount even at the lowest hour range (which starts at 1,950).
4. Those mid-level and senior associates who were viewed by ARC to be performing at the high end of the Strong metric, by often exceeding many of the expectations for this rating (roughly 20% of Strong ratings for mid- and senior-level associates), and who were at the lowest hour range (which starts at 1,950) will receive the full class amount; those in the second hour range and above will receive more than the class amount.
5. The balance of those associates receiving a Strong rating at the lowest hour range will receive less than the full class amount, but at the second hour range, they will receive the full class amount; in the third hour range and above they will receive more than the class amount.
6. Those associates receiving a Meets Basic Expectations Rating will receive less than the full class amount, except at the highest hours ranges.
This year, over 70% of associates are receiving bonuses. Of those receiving bonuses, 42% will receive an amount greater than the amount listed below for their class, 27% will receive their class amount and 30% will receive less than their class amount.
As has been the case in the past, bonuses will be pro-rated for recent hires, leaves of absence and part-time schedules during calendar year 2015.
| Class | Bonus |
| 2014 | $15,000 |
| 2013 | $25,000 |
| 2012 | $50,000 |
| 2011 | $65,000 |
| 2010 | $80,000 |
| 2009 | $90,000 |
| 2008 | $100,000 |
| 2007+ | $100,000 |
Bonus determinations will be delivered by interoffice mail to each associate on January 22, 2016. Bonuses will be paid by direct deposit on January 25.
2016 U.S. Associate Base Compensation Levels
Our base salary scale for U.S.-based associates will remain the same as 2015. We will recognize and reward our salaried associates for their contributions through the class year bumps in base salary as listed below. The class year bumps will be effective January 1, 2016, and base salary adjustments will be reflected in the January 25 monthly paycheck.
| Class | Calendar 2016 Salary |
| 2015 | $160,000 |
| 2014 | $170,000 |
| 2013 | $185,000 |
| 2012 | $210,000 |
| 2011 | $230,000 |
| 2010 | $250,000 |
| 2009 | $265,000 |
| 2008+ | $280,000 |
Base salary adjustments will be delivered by interoffice mail to each associate on January 22, 2016.
Bonus Eligibility for 2016
As always, quantitative and qualitative components will form the basis for bonus eligibility and awards. The 2016 bonus eligibility threshold for associates will continue to be 1,950 hours during the fiscal year. ARC will consider the following when determining whether an attorney has met the threshold.
· Billable hours
· Pro bono hours
· Legal services on behalf of the firm
· Shadow training under the firm’s shadow training policy
As has been the case in the past, bonuses for associates will continue to be pro-rated for recent hires, leaves of absence and part-time schedules based on the calendar year.
Pro Bono and Investment (“91”) Time
The firm remains committed to the Pro Bono Institute Pledge of dedicating 3% to 5% of its annual billable hours to legal matters on behalf of people in poverty or to advance civil rights and has asked that all of the firm’s lawyers commit a minimum of 50 hours annually to pro bono. Goodwin Procter believes that pro bono service is a shared contribution on the part of the firm and each individual attorney. Pro bono hours will continue to be credited toward the bonus determinations (both eligibility and amount). Pro bono hours will be treated the same as billable hours.
The firm strongly encourages attorneys to expand their professional development through investment or “91” time, which includes involvement in marketing activities, knowledge management, Business Unit and Legal Practice Area initiatives, diversity initiatives, training and firm committees. In 2016, ARC will continue to focus on the quality, not the quantity, of these efforts, although each associate should aim for at least 100 hours as a guideline. All attorneys are expected to invest their time in a way that challenges them professionally and contributes both to the firm and to their own development.
ARC will assess the quality of attorneys’ investment hours on that basis, but as in 2015, investment hours will not count toward the 1,950 bonus eligibility threshold or the quantitative aspect of the bonus.
Meeting
We recognize that you may have questions about the 2015 bonus program and/or the 2016 base salaries and bonus eligibility. We will convene a meeting for associates at 3:45 p.m. ET/12:45 p.m. PT on Wednesday, January 20, to discuss compensation and answer any questions you may have. A calendar invitation will follow shortly.
If you would like to submit questions anonymously in advance of the meetings, please use our online survey by 11 a.m. ET/8 a.m. PT on Wednesday, January 20. We will make every effort to address your questions. In the meantime, please do not hesitate to call me, Heidi Goldstein Shepherd, any ARC member or your Office, Department, BU or Legal Practice leaders, with any questions or comments.
Again, thank you for your hard work and many contributions to the firm.
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