As of this writing — Thursday, December 16, at 10:30 AM — Sullivan & Cromwell has not yet announced its bonus scheme. We suspect that several other top firms that have yet to announce bonuses, like Davis Polk, Simpson Thacher, Cleary Gottlieb, and Debevoise, are simply waiting for the white smoke to emerge from 125 Broad Street. [FN1]
So… what’s going on at S&C?
What you’d expect. Word on the street is that the partnership can’t agree on whether Sullivan should match the Cravath bonuses or beat them.
We’ve heard that S&C has had a very good year — which is reflected in their robust new partner class, and will be reflected in the profit per partner numbers that Am Law will release this coming spring. The firm certainly can go over Cravath (which it beat last year in PPP).
And if it had the Susman Godfrey philosophy, it would go over Cravath. Susman, which recently paid bonuses ranging from $45,000 to over $100,000, has a simple approach to determining bonus payouts. As Steven Susman told Vivia Chen of The Careerist:
Our associates work very hard and are very, very good. When we have a good year, their bonuses go up. These bonuses are about 20 percent higher than last year because we had about a 20 percent better year.
But Susman is a litigation boutique, with most of its lawyers in Texas, so it could be dismissed — and, we suspect, is being dismissed, by partners at Cravath and similar firms — as an irrelevant comparison for large, full-service law firms in New York (with lots of leverage and high associate-to-partner ratios).
The most relevant comparison for S&C is certainly Cravath. So the firm doesn’t need to beat Cravath from a market perspective. If S&C matches Cravath, then Davis, Simpson, Cleary and Debevoise will follow suit, and that will be that.
The problem is that S&C associates know that their firm has been having a good year — and have the billable hours and timesheets to prove it. If the firm just matches Cravath, associate morale will plummet.
What do you think Sullivan & Cromwell will do? Feel free to discuss in the comments, email us, or text us (646-820-TIPS). Thanks.
[FN1] Of course, please let us know if one of these firms already announced and we somehow missed it. Sometimes we miss announcements because people incorrectly think that someone else will tip us off.
Mad Mad Money [The Careerist]