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The Firm's associate compensation system is also fundamentally individual and merit-based. While some other firms are apparently now moving to this approach with much self-congratulatory fervor, this has been the Jones Day system for several decades. Other than the beginning salary for new associates just arriving from law school in the United States and similar programs in other jurisdictions, there is no lockstep approach to associate compensation. Thus, the Firm does not have an associate compensation structure or ladder that is uniform across all geographic markets, and even within individual geographies, each lawyer is compensated within a range that reflects both local market conditions and the fact that individual associates perform at different levels. Obviously, the Firm intends that its associates be compensated fairly, based on relevant market conditions and (most importantly) their individual performance and contribution to the Firm. For those associates who produce consistent high-quality work, we intend that they be compensated at or above the upper level of the markets in which we operate.

As this recitation indicates, we focus first and primarily on the quality, not the quantity, of each lawyer’s individual contribution. It is not in our clients' or the Firm's best interest to base any part of associate compensation directly on any hours-based formula; we are not a shirt factory. Indeed, substantive associate evaluations are completed before any hours data is applied to the evaluation, and even then, we simply indicate how that associate compares to other associates in his or her office and practice. After all, raw hours data are not very meaningful as an indication of performance, but relative hours data can be at least an indication of the level of effort and the market demand for an associate’s services. Because of this, associate evaluations and compensation adjustments should be primarily based upon the subjective quality of each person's overall contribution, including professional achievement, commitment to the Firm, judgment, client service, efficiency, leadership, productivity, and other appropriate factors. Jones Day does not believe that elevating billable hours to the primary determinant of associate compensation is consistent with our commitment to clients or each other.

Associate compensation at Jones Day is entirely salary, and does not include a bonus component. There are several reasons for this. First, we believe that associates should be compensated in the same way that partners are compensated – by determining an appropriate share of Firm earnings based on their relative contribution. Second, no matter how often in the past we tried to explain that a bonus payment is merit based, and not hours based, we do not believe that message ever really got through. In part, this is because most other firms that use a bonus component in associate compensation do base the amount of those bonuses, at least in part, on billable hours. We do not want to create the misimpression that associate compensation at Jones Day is determined by the amount of hours billed. We do expect our associates to work as hard as necessary to meet client objectives, and for many associates in many years this will be a heavy workload. But it should be driven by client needs, not the desire to qualify for some arbitrary bonus payment. Finally, if we expect our associates to become our partners, and we certainly hope that many of them will be, we should not be leaving the impression – even if erroneous – that their compensation will be based on anything other than their overall contribution.

We recognize that in many respects – lack of lockstep salaries, our refusal to base any part of compensation directly on billable hours recorded, our insistence on a subjective (not arithmetic) evaluation of the overall contribution of each lawyer individually, our refusal to use bonuses as part of our compensation structure, and our commitment to confidentiality – Jones Day is different from many other law firms with respect to associate compensation. We strongly believe, based on the fact that we have been committed to these principles for decades, that they have been an important part of our success as a firm over that time. They will continue to be an important part of our success going forward.

Whether with partner or associate evaluations, we avoid placing weight on anything that could encourage behavior that is not consistent with the best client service – failing to seek assistance from other lawyers better suited to deal with a specific client problem, for example, or for associates, attempting to reach some arbitrary billable hours level to qualify for a bonus. We do consider the full range of positive contributions – contributions to client generation or expansion, the provisions of excellent client service, the willingness to take on and carry out the necessary administrative work of the Firm; pro bono or other forms of public service that bring credit to the Firm and enhance its reputation; and equally important to any of these other criteria, being a good colleague – which includes responding to requests for assistance from other lawyers, meeting administrative (time recording, billing, collections, etc.) responsibilities, and treating other lawyers and staff as the professional colleagues they are.