Fact: Spring bonuses have been announced at Cravath, Sullivan & Cromwell, Simpson Thacher, and Cleary Gottlieb.
Fact: It’s February 7th.
Fact: Skadden, Davis Polk, Weil, and Debevoise should be ashamed of themselves.
Honestly, I don’t know what the top-tier firms that haven’t announced spring bonuses think they’re doing. Do they hope that no one is watching? Everybody is watching.
You want proof? Last week, at a “state of the firm” meeting, Cadwalader announced that it is considering spring bonuses. If Cadwalader goes with spring bonuses, it puts a whole host of other firms in play for the big payout…
If Cadwalader jumps into the spring bonus pool, we’re going to have to start asking questions about Paul Weiss, Willkie Farr, White & Case (don’t laugh), and other well-known New York City firms. Right now, the DPWs of the world are looking less elite than S&C and the other firms that have already announced spring bonuses. If CWT steps up to the spring bonus plate, they’ll make those other firms look downright cheap.
But Cadwalader is still considering its options. A tipster reports on what Cadwalader associates have been told:
[Last] Thursday, Cadwalader held its quarterly firm meeting. This is where all attorneys are invited to hear Chris White, the chairman of our firm, discuss the sort of “state of the firm” type thing and answer questions, which can be asked at the meeting or submitted anonymously beforehand. Someone asked (anonymously beforehand of course) whether the firm would be matching the spring bonuses of Cravath, Sullivan, Cleary and Simpson. He replied that there is a management committee meeting in 2 1/2 weeks and that the spring bonus question is already on the agenda for that meeting.
Then he said the firm would decide based on two factors, the fact that revenue remains flat and the need for the firm to remain competitive and pay at the top of the market.
At least Cadwalader is thinking about it.
And really, all the top firms should consider the optics of making a spring bonus move. Biglaw morale is in the toilet — 2008/2009 did that. Everybody, from the managing partner to the managing partner’s secretary, is feeling the pinch of the recession in one way or another. And it’s okay to pay people crappy bonuses so long as everybody else is doing it.
But when you are paying people below-market bonuses, that’s when people get angry. Look at what’s happening to Howrey (which, as you’ll recall, took first-year pay down to $100K back in 2009). The storm clouds are gathering there because partners perceive that they have better financial prospects elsewhere. Associates are the same way. If associates at Debevoise perceive they have better financial prospects at Cleary (or Cahill, or Cadwalader), they’ll jump ship. They’ll tell their friends to jump ship. They’ll tell people at their alma mater to avoid the place.
The best people will leave, and everybody else in the middle will be horribly disgruntled. All because the partnership didn’t pay out a spring bonus that ultimately isn’t even that expensive (when compared to the millions in profits per partner enjoyed at top firms).
The fact that Cadwalader (a firm that doesn’t have a reputation of being particularly generous with associates when partner profits are on the line) is even thinking about paying spring bonuses should tell the Davis Polks of the world that they have to step up to the plate.
There’s not really a choice any more. Spring bonuses are what the top firms are doing, so the only real question is whether or not you work at a top firm.