I was getting a little worried yesterday about the state of Biglaw bonuses. But a new day brings a new hope. Yesterday, Law360 (subscription req.) reported that Finnegan broke off a huge bonus payment that once again highlights how cheap Cravath and other Biglaw firms following Cravath have been this season.
Don’t get me wrong, Finnegan is a smallish “boutique” firm. And their bonuses are merit based as opposed to lockstep. It’s exactly the kind of place where they can post an eye-popping top number for the highest performing associates, while the rank and file aren’t doing all that well.
But even if Finnegan’s bonuses aren’t quite as magnificent as the firm would like you to believe, they still look impressive when compared to the low numbers Cravath and other lockstep followers have been dishing out. Eventually, you have to think that some of Cravath’s top talent will leave and try their hand someplace where their talents and hard work will be rewarded with cash….
The Finnegan bonuses are merit based, but they are generous at the top end. The Law360 article emphasizes that the top bonus number is $84,400. A lot of tipsters have emailed in, demanding reports on the latest firm to “put Cravath to shame.”
But let’s not start licking Finnegan’s popsicles just yet. When you dig deeper into the numbers, it’s not all milk and honey. From the report:
First-year associate bonuses ranged from $4,150 to $33,200, with an average of $15,917; second-year bonuses ranged from $4,100 to $45,000, with an average of $26,966; third-year bonuses ranged from $4,830 to $48,750, with an average of $26,775; and fourth-year bonuses ranged from $3,280 to $48,300, with an average of $30,790, according to an internal memo issued in January.
Fifth-year associates at Finnegan received bonuses between $7,190 and $57,500, with an average of $36,334; sixth-year bonuses ranged from $10,000 to $62,500, with an average of $32,744; seventh-years received anywhere from $28,890 to $66,250, averaging $49,991; and eighth-year bonuses ranged from $19,160 to $84,400, with an average of $58,866, according to the firm.
Those are just the averages from associates who did receive a bonus. Law360 says bonuses went out to 78% of the firm’s associates, which means 22% of Finnegan associates were SOL, and are probably wishing that they worked for a lockstep firm.
In a normal year, nobody would really care that some fifth year at Finnegan made $57,500 in bonuses. But in a normal year, Biglaw associates at lockstep firms would feel like their firms were treating them fairly when it came to bonus payments. This year, people are writing stuff like this:
Finnegan’s bonuses put it at the top of the heap in terms of maximum amounts doled out. Cravath Swaine & Moore LLP kicked off the year-end bonus race in November, when it announced it would be handing out bonuses up to $37,500 to its most senior associates, seventh-years from the class of 2004.
Technically, that’s true. But there are a lot of caveats. Caveats that can be easy to overlook when the overall impression of the CSM bonus market is that the payouts are cheap.
Finnegan Busts Benchmark With Year-End Bonuses Up To $84K [Law360] (subscription req)