A funny thing happened on the way to Cravath setting the 2009 Biglaw associate bonus. They didn’t. When Cleary matched Cravath’s bonus, 83% of Above the Law readers said that all other large New York firms would follow Cravath. But 83% of our readers were wrong.
Sullivan & Cromwell topped Cravath’s bonus by $5,000 for senior associates (class of 2002). Sure, it’s only $5,000. But that is $5,000 more than senior associates get for staying at Cravath. Call it a $5,000 retention bonus.
Does Cravath — and all the firms that rushed to follow Cravath — need to go back in and up the bonus payout to its senior people?
More discussion after the jump.
Last year Skadden doubled the Cravath bonus. Neither Cravath nor any other firm followed Skadden’s lead. This time around, Skadden evidently learned its lesson and dutifully followed Cravath.
But unlike last year, this year the true top of the New York bonus market has some followers. Since S&C announced bonuses on December 2nd, the other Biglaw firms that have announced have followed S&C’s retention bonus plan, not Cravath’s. That list includes: Paul Weiss, Ropes & Gray, and Fried Frank (if we are missing others, please let us know).
Here, let me put that in the form of a sentence I never thought I’d write. Senior associates at Fried Frank received a bigger bonus than senior associates at Cravath.
Does that make sense to you?
Of course, this situation doesn’t just apply to Cravath. Senior associates at Cleary, Skadden, Debevoise, and Davis Polk can all revel in the fact that they are getting just a little bit less than the senior people at Fried Frank and Ropes & Gray. Does playing follow-the-leader still make sense when the leader leads you to second place?
It seems to me that giving an extra $5,000 to the most senior associates would represent a de minimis cost to the partners at Cravath and its followers. We’re not talking about doubling the bonus payment to hundreds of inexperienced associates. Instead, firms like S&C found a way to put an extra $5K in pockets of its few most senior people. It’s a stocking stuffer.
Why wouldn’t Cravath admit that it slightly low-balled its senior associates and apply a little “market correction?” Can’t Cravath afford it? Didn’t Cravath’s senior people earn it?
Or is it just pride?
For the second year in a row, Cravath is not paying a “top-of-the-market” bonus. How the hell did that happen?
Earlier: Prior ATL coverage of associate bonuses