To All Partners:
The attached memo announcing a year end discretionary bonus will be sent to associates in North America on a class by class basis today. Bonuses will range from $7,500 to $35,000 and will be issued in mid-December. While the same bonus schedule will be applied in all offices, communication to our international offices is being handled on an office by office basis. Counsel bonuses will be announced next week.
The form memo to associates that just went out, plus confirmations of bonus amounts for specific class years, after the jump.
Here’s the form memo. We’ve confirmed that the class of 2008 will get $10,000, the class of 2007 will get $15,000, and the class of 2006 will get $20,000. So this is definitely looking like a Cravath match.
TO: Associates Class of [x]
FROM: Eric Friedman
RE: 2010 Associate Bonuses
We are pleased to announce that we will be paying a discretionary bonus this year. The discretionary bonus is an indication of our appreciation for your hard work and dedication to the Firm and our clients.
Accordingly, associates in the class of [x] will be paid a year end bonus of [x] on December 17, 2010*. As in the past, bonuses will be paid to associates in good standing who have been reasonably busy over the course of the year. Payment will only be made to associates employed by the Firm on December 17th.
Best wishes for the holiday season.
*If applicable, bonus amount will be prorated based on start dates and status changes.
Some early reactions from SASMF tipsters: “Ugh,” “Boo,” and “Skadden just matched Cravath — cheap bastards.”
From a source at a Skadden peer firm, who views this as the end of Biglaw bonus suspense: “Show’s over, folks — nothing to see here.”
UPDATE (2:00 PM): Elie here. I think it’s instructive to compare this bonus memo to the one Skadden sent out two years ago, when they led off with bonuses that turned out to be twice what Cravath (and everyone else) eventually paid.
In 2008, Skadden associates were greeted with this introduction from their firm:
As the year draws to a close and given the current economic environment, we thought it was appropriate to discuss our overall results for the year and our thinking with regard to associate bonuses.
In 2008, the level of the Firm’s business continues to be relatively strong, with our total workload, until very recently, being similar to 2007, our most successful year. However, we have more attorneys to do this work, and therefore, our results aren’t as strong as they were last year.
Today, Skadden associates got a hollow “The discretionary bonus is an indication of our appreciation for your hard work and dedication to the Firm and our clients.” Notice that there is no explanation about why bonuses are so low. Notice that there is no effort to show how this bonus relates to the firm’s success. It’s just, in essence, “Here’s your money. Like it, don’t like, we don’t give a damn.”
Here’s another Skadden message from 2008 that is noticeably absent today:
The Firm has a long term view of the important role associates play in the success of the Firm, and, accordingly, we are not planning associate downsizing. We believe that our associates represent our future and, as a matter of fact, offers to summer associates for employment next Fall were at the same high levels as in past years.
Just two years ago, Skadden told associates that they play a key role in the success of the firm. Today the best they could come up with was “Best wishes for the holiday season.”
I’m just guessing, but I think I know why Skadden omitted any explanatory information or references to how this year’s bonus schedule ties into the larger success of the firm. It would be laughable for Skadden to even pay lip service to these ideals given how little they’re paying out. Skadden can’t explain why the bonuses are low because there’s only one reason: Cravath said it was okay to cheap people. And Skadden can’t claim that the bonuses bear any relation to the profitability of the firm — unless they’re going to claim profits per partner were flat from 2009 to 2010.
Oh, there’s one more thing that Skadden did include in this year’s bonus memo: “We are pleased to announce that we will be paying a discretionary bonus this year.” Yeah, I bet they were very “pleased” when they realized they could get away with paying 2009 compensation despite the improved economic conditions of 2010.
UPDATE (2:12 PM): Lat here. For ease of reference, we’re reprinting below the Cravath 2010 bonus scale, which now appears to be the Skadden 2010 bonus scale as well. Get used to these numbers; you’ll surely be seeing them again and again.
Class of 2009 – $7,500
Class of 2008 — $10,000
Class of 2007 — $15,000
Class of 2006 — $20,000
Class of 2005 — $25,000
Class of 2004 — $30,000
Class of 2003 — $35,000
UPDATE (3:30 PM): Lat again. Remember our recent story about the Skadden partner who accidentally emailed confidential attorney evaluations to an entire department? If anyone would like to forward that email chain to us (minus the evaluations), you know where to reach us.
UPDATE (6:20 PM): A source close to the firm confirmed to the New York Law Journal that Skadden has matched Cravath up and down the entire bonus scale.