Bonus season is in full swing, and it appears that most Biglaw firms are falling in line behind Cravath. The chances of a firm besting the Cravath scale in any meaningful way grow slimmer everyday.
But according to one tipster, there is still hope for associates, and it’s coming from an unlikely place. A tipster believes that Cahill Gordon intends to double the Cravath bonus. But not all at once. Cahill doesn’t want to look like it’s breaking the market.
Now it might sound weird for Cahill to be willing to pay more but not wanting to get credit for it — but let’s check out what this tipster has to say…
We usually don’t run bonus info with one tip. In fact, we are sitting on a couple of other bonus announcements in need of corroboration. If your firm announced over the last few days and hasn’t been covered yet in Associate Bonus Watch 2010, please send an email to email@example.com, or text to 646-820-TIPS; you won’t be the first.
But this Cahill tip is particularly interesting:
[There was a] meeting with partners yesterday and [associates] were told that they would be given a “multiple” of the Cravath bonus. Partners said the associates would be paid one bonus in December and another in January (assuming to make it look like they’re just matching the market).
Not sure what the “multiple” is, but guessing it’s double given how cheap they are.
Remember, most firms budgeted for the associate bonus before Cravath announced, and who knows how many firms actually expected Cravath to be as cheap as it was. Some partners reacted with joy and surprise when the Cravath numbers came out. Right now, if partners budgeted extra money for the bonus, they can choose to pocket it or they can give it back to their employees.
We expect the vast majority of partners will pocket the money. But if they decided to give it back to the associates, why would they try to hide it? That’s the thing that doesn’t make sense about this tip. What’s the danger of rocking the bonus market if you are rocking up? Either firms will follow you (and you get to call yourselves a compensation leader), or firms will ignore you (and you’ll get to point out to new recruits and laterals that you pay more than the other guys).
Either way, what’s the downside? Why would Cahill act like Cravath managing partner Evan Chesler is standing behind it with a gun at its back while Cahill tries to answer the door?
In any event, I sure hope Cahill doubles the Cravath bonus. I have to think that if they do, they’ll want everybody to know it.
Cahill readers, please keep us posted. Thanks.
Earlier: Associate Bonus Watch 2010