First-Years Get Raises... Everyone Else Gets A Warm Glass Of Confusion
FEBRUARY?!? They don't get the money until FEBRUARY?!?
From: Babler, Paula C.
Sent: Friday, November 06, 2015 7:50 AM
To: FIRM – All Associates; FIRM – All Senior Counsel
Cc: FIRM – All Partners; FIRM – All Of Counsels
Subject: Memo from Jay Rothman & Stan Jaspan re FY2017 Associate Compensation
TO:
All Associates & Senior Counsel
FROM:
Jay Rothman & Stan Jaspan
CC:
All Partners & Of Counsel
DATE:
November 6, 2015
RE:
FY2017 Associate Compensation
With the start of the new evaluation year earlier this week, we want to announce some modifications to our associate compensation program for next fiscal year. Our primary goal with respect to associate compensation is to treat our associates fairly and competitively, based on individual performance. We believe these modifications advance that objective.
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Overview
We will continue with a base salary for each associate and senior counsel and year-end bonuses to be paid in January 2017. While salary determinations are focused on longer term development and contribution to the Firm and bonus determinations focus to a greater extent on performance during the evaluation year, the criteria applicable to both are similar, including:
· professional competence and quality of work
· efficiency and value of work
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· work effort, including quantity of work
· expertise development (including growth of new niche practices)
· teamwork/collegiality
· enterprise creation/supervision of client relationships
(including especially enterprise development success)
· emerging responsibility, supervision and delegation
(including training and mentoring of less senior associates)
· quality and quantity of pro bono time
· quality of non-billable investment time
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· client development and credentialing efforts and successes
· other notable contributions that help the Firm better achieve its strategic objectives
Minimum Hours Expectation
After much discussion, the Firm has decided to maintain theminimum expectation of 1850 billable hours (including credited pro bono hours) and 150 investment hours for all non-flex time associates and senior counsel. There is a presumption that those associates and senior counsel who have been with the Firm for more than a year who do not satisfy this minimum expectation, absent a personal or family situation justifying otherwise, will not be eligible for a salary increase or advancement. Salaries for flex time attorneys will continue to be calculated based upon anticipated billable hours as a percentage of 1850.
Year-End Bonuses
The following modifications to the bonus program will apply beginning with the November 1, 2015 through October 31, 2016evaluation year:
· As the 1850-hour threshold is only a minimum expectation, there will be a presumption that, to be eligible for year-end bonus consideration, a non-flex time associate or senior counsel must work at least 1950 billable hours(including credited pro bono hours) and 150 investment hours during the evaluation year.
· While we are aware that some law firms are reverting to an hours-based bonus system, we do not believe such an approach is in the best interest of our clients nor a fair evaluation of the total contribution made by individual associates and senior counsel. However, in the interest of providing some guidance with regard to bonus amounts, we are adopting for next year a presumption that (i) associates and senior counsel who work 2000 billable hours (including credited pro bono hours) will be paid a year-end bonus of not less than 10% of base salary and (ii) associates and senior counsel who work 2200 billable hours (including credited pro bono hours) will be paid a year-end bonus of not less than 20% of base salary.
· The maximum bonus for Tier I associates will remain at 30%, but for Tier II associates and senior counsel the maximum bonus will increase to 40%.
· Finally as to the bonus program, new associates will be required to be with the Firm for a full evaluation year in order to qualify for a year-end bonus, as is currently the case; however, lateral associates in appropriate circumstances will qualify for pro rata bonuses with partial evaluation years.
Base Salary & Salary Schedules
Salary schedules for each office will continue to provide set amounts for each class in Tier I, six salary levels for Tier II associates, and a standard first year senior counsel salary; however, effective February 1, 2016:
· The salary schedules in all offices will be adjusted to eliminate the 1950 deferred compensation feature; and
· Other adjustments will be made to the salary schedules in a number of our offices in order to remain competitive with other major law firms in the market.
The February 1, 2016 salary schedule for each office will be distributed next week to associates and senior counsel in the office. As in the past, associates and senior counsel will be advised of their individual salaries during their January evaluations, along with bonus determinations for the current year and advancement determinations.
As stated earlier, the goal of our associate compensation program is to treat all our associates fairly and competitively, based on individual performance. The changes we are making to the bonus program and salary schedules are intended to help achieve this goal. If you have any questions, please feel free to contact your OMP, Department Chair, office or practice group chair, or either of us. And thanks again to each of you for all that you do for the Firm.
