Lat here. As Elie just predicted, Sullivan & Cromwell has shown up to Bigfoot the partnership of Cravath — sort of. It has announced a year-end bonus scale that is very similar to, but slightly better than, the Cravath bonus scale.
And, more importantly, it has promised spring bonuses. The ATL headquarters is around Soho, but we could hear the gnashing of partners’ teeth in both midtown and downtown Manhattan.
Let’s get into the specifics….
Multiple sources report that the S&C scale is the same as the Cravath scale, but with one notable exception: members of the class of 2003 (and more senior) get $42,500. So here’s how the S&C scale looks:
Class of 2010 — $7,500
Class of 2009 — $10,000
Class of 2008 — $15,000
Class of 2007 — $20,000
Class of 2006 — $25,000
Class of 2005 — $30,000
Class of 2004 — $37,500
Class of 2003 (and up) — $42,500
Most importantly for market setting, and for the big picture of Biglaw compensation, the S&C memo stated that yes, there will be spring bonuses in 2012. So this (probably? hopefully?) means that peer firms to Sullivan will pay up more money in a few months — assuming the economy remains on sound footing, of course.
And now, over to my colleague, Elie Mystal, for color commentary.
UPDATE (6 PM): Elie here. And NOW we have a bonus season. S&C is so smart. It’s not announcing *what* its spring bonus is going to be, just announcing that there will be one.
Your move, Cravath.
The S&C move really puts Cravath in a bind. By having a top figure on regular bonuses that is slightly better than Cravath’s, S&C has put CSM in second place in terms of bonuses (among “main line” Biglaw firms, i.e., setting aside the Boies Schillers and Wachtells of the world). And that’s before we get to the spring bonuses that S&C hints at, which Cravath was silent on.
This is probably a reaction to last year, when S&C announced spring bonuses first, and then Cravath came over the top with even larger spring bonuses. S&C is trying to force Cravath to show its hand first. Cravath can engage in a staring contest with S&C if it wants to. But while they wait, top associates at Cravath are being underpaid — not just compared to their Wachtell and Boies friends, but also against their S&C colleagues.
(Some say that Cravath’s partnership track is so short that it doesn’t have many super-senior lawyers who aren’t partners. But Cravath does have non-partner lawyers who are from the class of 2003 and more senior, even if their titles may differ from “associate” — e.g., “practice area attorney.” And some of these practice-area attorneys own million-dollar apartments.)
If you are a top firm for compensation and are looking for some lateral talent from Cravath, now would be a good time to make a phone call.
Sit tight everybody. Joe Shenker just did everybody a solid. Now we’re about to see what the 2011 Biglaw bonuses will really look like.
UPDATE (6:08 PM): Here’s the exact language about spring bonuses from the S&C memo: “As in past years, the Firm currently expects to pay a bonus in the Spring.”
UPDATE (6:10 PM): From an S&C tipster: “The S&C bonus also includes the right of prima nocta on the wedding night of any Cravath associate.”
UPDATE (6:15 PM): Lat here. We have more detail and historical background, from Julie Triedman of Am Law Daily:
The memo sent out by firm chairman Joseph Shenker said bonus checks will be issued on December 23. The memo also said that the firm currently anticipates paying a special supplemental bonus in the spring—a departure from what other firms have said about whether associates could expect such extra payments so far this season.
According to the memo, the expectation that S&C will pay spring bonuses is based on the firm’s overall financial performance and the general activity levels of its associates. As with the year-end bonuses, the spring payments will not be pegged to individual performance or hours.
Sullivan was the first firm to announce a spring supplemental bonus to senior associates in the fall of 2007. It has paid bonuses in the spring every year since, with the exception of 2010. In late January 2011, for example, the firm announced supplemental bonuses ranging from $2,500 for first-year associates to $20,000 for the members of the most senior classes. But in 2009, during the recession, the supplemental bonuses were much lower, according to one report.
Ah yes — S&C’s January 2011 supplemental bonus announcement. Wasn’t that a great day?