Associate Bonus Watch 2008

Associate Bonus Watch: Clifford Chance Already Laid People Off, Half-Skadden Bonuses Were Sure to Follow

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Legal Week is reporting that Clifford Chance has done the predictable thing and slashed associate bonuses to half of what they were in 2006:

The US arm of the magic circle firm will award bonuses ranging from a pro-rated $17,500 (£12,000) for first-year associates to $32,500 (£22,000) for eighth-year associates – a significant decrease on last year, when the firm awarded bonuses ranging from $35,000 (£24,000) to $65,000 (£44,500).

In October, we reported on Clifford Chance’s layoffs of 20 litigation associates. But at the time we noted that the financial health of the firm had been strong in 2007:

Interestingly enough, Clifford Chance recently snagged the #1 spot on the American Lawyer’s list of top-grossing global law firms (ranked by 2007 revenue). Will its proactive response to economic turmoil help CC keep the top spot for 2008? Or are the cuts a sign of deeper troubles at the firm?

Because Half-Skadden low balled the market on associate bonuses, we can’t tell if today’s announcement is indicative of “deeper troubles,” or if Clifford Chance is just being a prudent bonus follower? Certainly, Clifford Chance wasn’t going to leave bonuses at Skadden levels so soon after firing attorneys. That would have just seemed irresponsible.

So far, the Cravath bonuses have set the floor. We’ll see if any firm wants to take it to the basement.

CC announces bonus cutbacks for US associates [Legal Week]

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Earlier: Nationwide Layoff Watch: Clifford Chance (Redux)

Prior ATL coverage of associate bonuses.

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