GOODWIN PROCTER — MEMORANDUM — 2016 BONUS PROGRAM AND 2017 COMPENSATION
On behalf of the firm and its partners, I would like to thank each of you for your hard work and commitment to the firm over the past year.
This memo outlines the 2016 bonus determinations, 2017 base salaries, and bonus eligibility considerations for 2017.
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2016 Bonus
For calendar year 2016, we continued our practice of awarding bonuses based on a combination of factors – legal excellence; the amount of time spent on billable work, pro bono matters, 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.
Associates in good standing who met the 1,950-hour threshold during our fiscal year ending September 30, 2016 are eligible to receive bonuses. Because bonuses are based on performance during our fiscal year ending September 30, 2016, recently hired associates (including the Class of 2016) are not eligible to receive bonuses.
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 2016.
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The 2016 U.S. associate bonuses are determined by reference to the bonus scale set forth below and the ratings. 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 Below Frameworks rating is lower for the more senior classes than it is for the more junior classes.
3. Those with a Distinctive rating 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 highest end of the Successfully Achieves Frameworks metric, by often exceeding many of the Frameworks for this rating (roughly 12% of the “Successfully Achieves Frameworks” 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 Successfully Achieves Frameworks 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 Below Frameworks rating will receive less than the full class amount, except at the highest hours ranges.
This year, over 68% of associates are receiving bonuses. Of those receiving bonuses, 40% will receive an amount greater than the amount listed for their class, 36% will receive their class amount, and 24% will receive less than their class amount.
| Class | Bonus |
| 2015 | $15,000 |
| 2014 | $25,000 |
| 2013 | $50,000 |
| 2012 | $65,000 |
| 2011 | $80,000 |
| 2010 | $90,000 |
| 2009 | $100,000 |
| 2008+ | $100,000 |
Bonus determinations will be delivered by interoffice mail to each associate on January 24, 2017. Bonuses will be paid by direct deposit on January 25.
2017 U.S. Associate Base Compensation Levels
Our base salary scale for U.S.-based associates increased in July 2016, and these new salary levels will remain the same in 2017. We will recognize and reward our salaried associates for their contributions through the class year bumps to the applicable base salary listed below. The class year bumps will be effective January 1, 2017, and base salary adjustments will be reflected in the January 25 monthly paycheck.
| Class | Calendar 2017 Salary |
| 2016 | $180,000 |
| 2015 | $190,000 |
| 2014 | $210,000 |
| 2013 | $235,000 |
| 2012 | $260,000 |
| 2011 | $280,000 |
| 2010 + | $300,000 |
Base salary adjustments will be set forth in memoranda delivered by interoffice mail to each associate on January 24, 2017.
Bonus Eligibility for 2017
As has been the case in the past, for bonus eligibility and awards in 2017, it is our expectation that associates bill at least 1,950 hours during the fiscal year to:
· Billable hours
· Pro bono hours
· Legal services on behalf of the firm
· Shadow training under the firm’s shadow training policy (not annualized)
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 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. Pro bono hours will be treated the same as billable hours.
The firm also expects attorneys to collaborate through investment (or “91”) time matters, including marketing activities, knowledge management, Business Unit and Legal Practice Area initiatives, diversity initiatives, training and participation on firm committees. Collaboration and active participation in our community are core values of our firm. In 2017, ARC will continue to focus on the quality, not the quantity, of these efforts.
Meeting
We recognize that you may have questions about the 2016 bonus program and/or the 2017 base salaries and bonus eligibility. As a forum to answer your questions, we have scheduled a meeting for associates at 3:00 p.m. ET/12 noon PT on Monday, January 23. 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 5 pm. ET/2 pm PT on Friday, January 20. 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 efforts and contributions to the firm.
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David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. He previously worked as a federal prosecutor in Newark, New Jersey; a litigation associate at Wachtell, Lipton, Rosen & Katz; and a law clerk to Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at [email protected].