A year ago tomorrow (Wednesday), Cravath kicked off the 2007 bonus season by announcing bonuses which ranged from $35K to $60K and “special” bonuses that ranged between $10K and $50K.
Don’t expect Cravath to come out of the gate early this year. We asked Cravath whether they would be bonus leaders this year, but they declined to comment, citing their longstanding policy of not talking about associate compensation issues.
But remember how surprisingly early last year’s bonus announcement was for Cravath. In 2007 they announced on October 29th, but in 2006 they didn’t announce until December 11th. In ’06, Milbank came out with the first bonus announcement, but they waited until December 8th to announce.
From what we are hearing, bonus announcements could come even later in 2008 than they did in 2006. Sources are telling us that their firms are trying to wait until the last possible minute to announce bonuses. Managing partners are still trying to lock down their fee collections, which are lagging given the economic difficulties.
In addition, some firms are still trying to figure out which clients will exist going forward.
With all the uncertainty, late bonus announcements seem likely.
More bonus speculation after the jump.
Whenever the bonuses are announced, most people we are talking to agree that the overall numbers will be somewhat down from last year. A common thought is that top law firms will adopt the same basic bonus package as last year, but drop the “special” bonus compensation. This will cost associates between $10K and $50K depending on your year.
But there is a countervailing theory that is being “pushed” by some senior associates and other legal industry watchers that we’ve spoken with. The suggestion is that top firms should use this bonus season to further separate themselves from the next tier. There is a chance that the “Pied Piper” nature of bonus matching ends this year.
However, a cursory scroll through our bonus coverage from last year shows that firms weren’t exactly in lockstep with Cravath last year. Cravath set the market for the top of the New York market. But many firms deviated last year.
Many people think we will see even more deviation this year.
And then there’s Orrick, Herrington & Sutcliffe. Orrick announced their 2008 bonus structure way back in June. They announced a standard bonus that ranges from $25K to $50K. They also announced a discretionary bonus, “up to” $20K for juniors, $35K for seniors.
Does anybody think those numbers are going to hold up?
Let the bonus speculation begin.
As always, we welcome bonus news and memos via email (subject line: “Associate Bonus Watch”).