We’re bored (and so are you). We’re just passing time until another major law firm announces year-end bonuses, in the wake of Monday’s Cravath announcement.
In today’s New York Times, Ellen Rosen has this interesting article on law firm bonuses:
Cravath, Swaine & Moore has raised the salary bar for law firm associates in Manhattan.
The firm has announced that it will award a special one-time bonus for associates in addition to the traditional year-end bonus that the firm, like most others, already pays. All but the newest associates will receive $10,000 to $50,000, depending on seniority, which was first reported by Abovethelaw.com.
Thanks for the shout-out, Ellen!
What about other law firms? Read more, after the jump.
Expect announcements soon from Debevoise and S&C:
Surprisingly, several partners at other firms said they had not yet heard about the increases — either from other partners or their associates, who are not shy about mentioning what other firms pay. But a spokesman at Shearman & Sterling said, “We’re aware of recent developments, but are not prepared to comment.”
Martin F. Evans, Debevoise & Plimpton’s presiding partner, said in an e-mail message that the firm expected “to announce this week fully competitive annual and special bonuses.”….
Sullivan & Cromwell, which began a round of salary wars in 2006 when it increased first year pay to $145,000, is likely to match soon. A law firm partner, Gandolfo V. DiBlasi, said, “We’ve always paid at the top and we intend to this year.” He declined, however, to say whether Sullivan & Cromwell would bifurcate its bonuses like Cravath or increase the total year-end bonus.
Some good final thoughts on Cravath’s unusual approach to bonuses this year:
The structure matters. By awarding a special bonus, Cravath is not tied to the amount for next year. Mr. Chesler said that “it’s an uncertain economy,” and said that unlike a corporation that had retained earnings, law firm partnerships “distribute net income above expenses, and part of that is what we pay our employees.”
The bifurcated bonus structure is a shrewd move on Cravath’s part. It allows CSM to be a market leader on compensation, while at the same time (1) controlling bonus expectations for 2008 and (2) giving competitors a fig leaf for not matching the full, total bonus (as opposed to matching just the year-end bonus). It will be interesting to see whether other Biglaw shops adopt the Cravath approach.
Law Firm Is Giving Its Associates Two Year-End Bonuses [New York Times]