As we get back to our regularly scheduled programming, it’s pretty obvious that bonus season has gotten a little bit ragged. This is what happens when the overdog, Cravath, fails to set bonuses at reasonable levels: firms get confused and try to do things to make it look like they’re clearing the ridiculously low bar Cravath has set. There are so many firms now with some kind of performance or hours mark that will allow at least one of their associates to say, “I made more this year than if I was working at Cravath.”
And that’s just the firms that have announced already. Other firms seem to be waiting to make their “year-end” bonus announcement because they don’t want to have to go back and dole out more money once somebody gets around to announcing spring bonuses. While it might be fun for Cravath and Sullivan & Cromwell to play chicken over who will announce spring bonuses first, there are a whole bunch of firms that are just sitting around waiting to find out how much they are going to have to pay.
And there are a bunch of associates who are starting to wonder if they’ll be getting any kind of bonus at all.
So who did we miss? Who still owes you a bonus announcement?
It makes sense that spring bonuses take a little time. The firms need to collect and count all their money. Give it to all the partners, have the Eyes Wide Shut partner party, and then decide if they want to give any more back to the associates. The benefit of spring bonuses is that it allows firms to make bonus payments based on what they’ve actually collected, not on what they’ve charged.
But the expectation of spring bonuses means a firm like Cravath can set the year-end bonus at an entirely arbitrary number. Look, the overall bonus might be just the same as last year. It’s entirely possible that partner profits will continue to go up, while associate compensation remains stagnant.
But nobody really thinks the overall bonus is going to be half of what it was last year, which is where things stand now thanks to Cravath’s low bonus without any mention of a spring payment. Nobody really thinks Biglaw bonuses are going to be worse in 2011 than they were in 2010.
Which means we still have a lot of firms that are just waiting to see what happens. They know this Cravath number is BS, but they don’t want to move until they know where CSM is going to end up. Remember that last year there were firms that followed S&C for spring bonuses — before Cravath came over the top of S&C — that ended up looking like cheapskates.
So who is still waiting? Which firms are holding up associates’ money as they wait for Cravath to figure out a final answer to the 2011 bonus season? Let us know, by text (646-820-8477) or by email.