But given the problems plaguing both the broader economy and the legal profession, bonuses didn’t go down by as much as many WLRK associates expected. The general reaction at 51 West 52nd Street was one of pleasant surprise: “Less than last year, but better than expected,” according to one source. The bonuses were announced last week, around the time of the Wachtell holiday party.
So how much are your friends and classmates at Wachtell taking home this year? Find out, after the jump.
[H]ere’s how bonuses at WLRK work. First, they’re lockstep, not tied to any billable-hours requirement or performance review. Everyone in the same class receives the same bonus.
Second, Wachtell bonuses are calculated as a percentage of base salary. Sometimes the percentage is the same from class to class; sometimes it’s not. In 2006, for example, there were divergences from year to year.
This year there were divergences as well. We don’t have the exact bonus percentages for all class years, but we’re hearing that they tended to cluster roughly around 50 percent of base salary — higher for some classes, lower for others. [FN1]
UPDATE / CORRECTION: Based on additional information, we’ve revised the percentage down to 50 percent (from the 55 percent mentioned in the original version of this post). We understand that some of the more junior classes received bonuses of a little under 50 percent of base salary.
A bonus percentage of about 50 percent represents a decline from last year’s figure of approximately 70 percent of base salary. But, all things considered, it’s not bad. A typical junior associate at Wachtell received roughly the same total compensation in 2009 as in 2008: the lower bonus percentage for this year was offset by the associate’s higher base salary (since Wachtell hasn’t frozen salaries).
Despite the decrease, associates at WLRK are still making significantly more than most of their colleagues at comparable firms. The firm pays its first-year associates a salary of $165,000, slightly above market. If you add a 45 percent bonus on top of that, you’re looking at “all in” compensation of around $240,000 ($165,000 plus a $75,000 bonus). Not bad for a first-year.
In other Wachtell news, the firm named just two new partners (down from last year’s six). Congratulations to Ben Roth, in corporate, and Josh Feltman, in restructuring and finance (i.e., bankruptcy; fka “creditors’ rights”). Feltman went up early — he’s only a seventh-year, and the usual Wachtell partnership track is eight years — but he’s a bankruptcy lawyer, and bankruptcy is hot these days.
The year now drawing to a close was an interesting one for Wachtell. On the downside, there were some high-profile snafus, summarized over at Lawshucks. (But some of them may not have been true snafus; see here and here.)
On the upside, the firm fared well in its core business of M&A advisory work. Overall deal volume in 2009 took a hit — but of the M&A work that was out there, Wachtell scored a decent share, landing near the top of the league tables. See here (first half of the year) and here (first three quarters).
So, all things considered, the Wachtell bonuses reflect how 2009 treated the firm as a whole: not great, but perfectly fine. And these days, “perfectly fine” is a pretty good place to be.
[FN1] If this 55 percent figure isn’t consistent with what you know, please email us. Please mention the class year that is the basis for your information, since the bonus percentage varies from class to class. Thanks.
Bad Blood Building Between Wachtell and Paul Weiss [Lawshucks]
Skadden, Wachtell Dominate M&A League Tables [Am Law Daily]
M&A League Tables of League Advisors, Q1-Q3 2009 [Merger Market (PDF)]