Year-end bonus news continues to roll in from the major law firms, with one notable exception: Sullivan & Cromwell. The silence makes me think S&C is cooking up something. It’s one of the few firms with the wherewithal and the gumption to best Cravath’s already healthy bonuses.
We’re limiting our discussion here, of course, to the big lockstep firms. Outside that world, some firms beat Cravath every year — likes Boies Schiller & Flexner, founded by Cravath’s most famous former partner, David Boies. We’ll have a report on the Boies bonuses later today; if you’re at BSF and care to share your reaction, email us or text us (646-820-8477).
In the meantime, let’s check out the bonus news of Shearman & Sterling. It’s a bit different from the announcements we’ve reported on thus far….
So far the firms we’ve covered in Associate Bonus Watch 2012 have paid the Cravath amounts in lockstep — i.e., based on seniority, without regard to hours or performance. This is what makes for a true Cravath match.
The Shearman announcement, which provides for individualized bonuses, isn’t a “match” in this classic sense. Check out the memo from global managing partner David J. Beveridge, posted on the next page. After reprinting the 2012 Cravath bonus table, which it describes as setting forth “[t]he standard bonus for US Track associates in each class year,” the memo states that “individual bonus amounts will be discretionary, based on performance.” (This distinction was not mentioned by the WSJ Law Blog (sub. req.), which presented the Shearman bonuses as a straightforward Cravath match.)
How many Shearman associates receive “non-standard” bonuses? We don’t know, but one source estimates that 10 percent receive bonuses above the Cravath scale and 10 percent receive bonuses below it. Most associates, though, receive the “standard” bonus, it would appear.
Just to be clear, this is standard practice for Shearman — taking the Cravath scale, treating it as the lodestar, and paying most bonuses at the Cravath level, with a few above and a few below. The firm did this with its 2010 year-end bonuses, for example. You could call it, as we did for the 2011 year-end bonuses, a Cravath match for practical purposes. But for those who follow this stuff obsessively, as we do here at Above the Law, it is not a classic “match.”
Shearman will pay bonuses on January 15, 2013. Paying out in the new year is also standard practice for S&S.
Regardless of the label, the announcement is good news. Congratulations, Shearman & Sterling associates, on your bonuses, “standard” and otherwise.
(We’ve posted the full memo on the next page for anyone who’d like to look.)