After getting attorney feedback, Goldberg Segalla revamps installment-payment bonus program
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Goldberg Segalla has said it has made “significant changes” to a planned bonus program that required bonuses to be paid in installments and docked associates for billable hour credit when clients didn’t pay up.
Goldberg Segalla told Above the Law that it made changes “aimed at simplifying and streamlining the program and responding to feedback about the program from the firm’s attorney community.”
Above the Law heard from a Goldberg Segalla spokesperson after the blog published a memo labeled “Annual Bonus Program and Criteria - 2020.” The now-obsolete bonus memo—which the firm said is nearly a year old—had explained why one component of the bonus program was based on “realized hours” rather than billable hours.
“Because we are a best practices firm, our goal is to reward quality work that our clients determine to be worthy of payment,” the memo said.
The document had also warned associates that prior bonuses have “no bearing whatsoever on your bonus in any subsequent year, and should never be considered a floor, or a standard, nor create an expectation.”
The realized hours part of the program is now gone, as is another component based on “professional hygiene.” That component had included an evaluation of “team spiritedness,” timely time entry, adherence to client budgets, and compliance with other administrative criteria.
The now-scrapped memo also said four of the five bonus distributions would be paid in 2021, with adjustments for write-offs and holdbacks for unpaid client bills. The adjustments and holdbacks are eliminated, and the payout structure is shortened, Aidan Ryan, a spokesperson for Goldberg Segalla, told Above the Law.
Ryan told the ABA Journal that the firm announced the bonus changes last week. An important part of the program consists of process improvements that improve transparency.
Now, associates will meet with their practice group leaders at the beginning of the year, where expectations about total compensation will be set.
“Bonuses aren’t dropping like a surprise at the end of the year” under the new system, he says.
The revised program is still not a lockstep system based on associate class, he says. Although billable hours are one of the components, the program recognizes that attorneys contribute to the firm in different ways, he says.
Ryan says the firm’s leadership decided to reevaluate the bonus program in February and began holding town halls and other forums to get attorney feedback.
“Leadership recognized, essentially, ‘We can do this better,’ and then sought out input from the community,” Ryan told the ABA Journal in an email.
Chris Belter, chief operating officer at Goldberg Segalla, spoke with Law360 about the changes. He said the revised program will consider experience, expertise, leadership, contributions to organizations outside the firm, service provided to clients, and the quality of work.
Bonuses will now be distributed in December and April, Belter said.
Although the bonus structure has changed, the bonuses won’t be announced until mid-December. Belter expects they won’t be any lower because of the COVID-19 pandemic.
Baker McKenzie was the first law firm to announce year-end bonuses this year. The law firm promised to pay bonuses matching last year’s scale of $15,000 to $100,000. If other law firms pay more, Baker McKenzie said, it would match them.
“Since Baker McKenzie made the first year-end bonus announcement last week,” Above the Law wrote, “BigLaw has been pretty quiet on the bonus front. Let’s hope whichever firm acts next will do so with the nice, big lockstep numbers we’ve come to expect from the elite in BigLaw.”
Updated Nov. 23 at 9:45 a.m. to include additional information from Ryan.