Associate Bonus Watch 2010, Associate Salaries, Biglaw, Bonuses, Cheapness, Holy Crap, Money

Cravath Bonuses Are Out: The 2010 Bonus Season Is Under Way!

We’ve had to wait a long time for this announcement. Last year, Cravath kicked off bonus season on November 2nd. This year, bonus news took longer to arrive.

Was it worth the wait? Cravath just announced its bonuses, this afternoon.

So, what are the Cravath year-end bonuses looking like for 2010?

Anemic. They’re essentially the same as last year (with a slight bump up for the most senior associates). Sigh.

Just like last year, Cravath leaked its bonus news to the WSJ Law Blog first. And just like last year, the WSJ Law Blog returned the favor with a very positive write-up:

Cravath has started the associate-bonus ball rolling this year, and the news, all things considered, is good: the firm is matching last year’s bonuses for younger associates and it is giving $5,000 more to its most senior associates.

The news is “good”? The legal economy is doing MUCH BETTER than it was at this time last year. People have been billing more than last year. And if Cravath’s profits per partner are not up for 2010 over 2009, everybody will be shocked.

So, unless you’re talking about partnerships across Biglaw who will be saved from having to share more of the profits with their associates, I’m not sure how this qualifies as “good” news.

Unless you thought Cravath was going to give a $0 bonus. Though, come to think of it, today’s payout is much closer to nothing than it is to what one would expect from a firm that has been through the worst of the recession.

Here’s the full scale, in case you have forgotten:

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

Happy holidays?

UPDATES (3:15 PM): Lat here. A few additional comments:

1. The bonuses will be paid on Friday, December 10 (as noted by the WSJ).

2. Early reaction seems unfavorable. See the comments. See also this comment, from a source at another firm:

Why does CSM get to set the market?

Maybe this will give other firms the chance to show that they’re better than Cravath. Or maybe a choir of angels will descend to Earth and peace will reign for a thousand years.

3. When your firm inevitably follows Cravath announces its bonuses, please let us know, ASAP. You can email or text (646) 820-TIPS.

UPDATES (3:56 PM): Elie here. More food for thought:

We just crunched some numbers. Here are some (very sad) stats about Cravath’s bonus.

All-in, pre-tax compensation for a full first-year in 2007 — i.e., a graduate of the class of 2006 — was $205,000. That’s $160,000 (base) + $35,000 (bonus) + $10,000 (special bonus).

All-in, pre-tax compensation for a full first-year at Cravath in 2010 — i.e., a graduate of the class of 2009 — will be $167,500. That’s $160K (base) + $7.5K (bonus) + You’ll take it and like it (special bonus). That’s almost a 20% pay cut for “full” (i.e., non-stub-year) first-year compensation from 2007 to 2010.

UPDATE (8:30 PM): Feel free to send us the official memo via email.

UPDATE (9:22 PM): Actually, here’s the full Cravath bonus memo, via DealBook:


Year-End Bonuses

November 22, 2010

We are pleased to announce that the year-end bonus amount for each associate class is as follows:

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

Bonuses will be paid on Friday, December 10. Absent special circumstances (approved by the Managing Partners), an associate must still be at the Firm on December 10 to be eligible for the bonus. The Firm does not apply any billable hour or similar criteria in determining eligibility for associate bonuses. As always, while receipt of the bonus for each individual attorney is dependent on suitable performance at that attorney’s experience level, virtually all of our associates will receive the full bonus.

To be eligible for a bonus, an associate must have been employed at the Firm prior to September 1, 2010. Attorneys who are working part-time will receive a pro-rated portion of the applicable class-level bonus. Bonuses for senior attorneys, specialist attorneys, discovery specialist attorneys and foreign associate attorneys will be determined on an individual basis.

We thank you for your hard work and dedication throughout 2010.

E. R. Chesler
R. H. Baron
C. A. Parker
S. A. Barshay

UPDATE (11/23/2010): Follow all the mindless following of Cravath bonus announcement action via Associate Bonus Watch 2010.

Cravath Kicks Off Bonus Season [WSJ Law Blog]

Earlier: Breaking: Cravath Bonuses Are Out (and Down)
Where. Are. THE BONUSES?
Pregaming the 2010 Law Firm Bonus Season

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