When you read about a multibillion-dollar, highly contested corporate takeover, there’s a decent chance that Wachtell Lipton is involved. The firm, which routinely tops the American Lawyer’s profits per partner rankings and Vault’s prestige rankings, is known for its expertise in mergers and acquisitions.
Charter Communications’ unsolicited $61 billion bid for Time Warner Cable? Yup, Wachtell is on the scene, representing Charter (with help from Kirkland & Ellis). If a deal goes through, count on an eight-figure fee for Wachtell.
And some of that lucre will trickle down to associates. Wachtell Lipton is known for gigantic bonuses, which can match (or even occasionally exceed) an associate’s base salary. And it pays out bonuses in lockstep fashion, without regard to hours (unlike, say, Boies Schiller, another firm famous for its generous bonuses).
How were Wachtell bonuses in 2013? Inquiring minds want to know. Alas, we don’t have the 2013 info (yet) — but here’s what we’ve heard about 2011 and 2012….
Better late than never, right? Looking back through our archives, it seems that the last time we covered Wachtell bonuses was back in April 2011, discussing the 2010 year-end bonuses. So we have not yet covered the 2011, 2012, or 2013 bonus cycles.
Contrary to some speculation, our failure to cover WLRK bonuses is not due to any conspiracy between me and my former firm. It’s just that, as we’ve previously explained, the firm is very good at keeping its associates quiet (about both good and bad news). The reason there’s no letter grade for Wachtell in our ATL Career Center profile is because not enough WLRK associates have taken our insider survey.
Now, on to the subject of Wachtell bonuses in 2011 and 2012. We have heard — not from friends or contacts still at the firm, who declined comment, but one degree removed — that these bonuses were roughly 100 percent of base salary. And note that Wachtell base salaries are slightly above-market; first-year associates start at $165,000 instead of the usual $160,000. So this means that non-stub first-years at Wachtell took home more than $300,000 in 2011 and 2012. (Stub-year first-years get prorated bonuses.)
It would make sense for Wachtell to pay 100 percent bonuses in 2011 and 2012. According to the American Lawyer, the firm enjoyed profits per partner of $4.46 million in 2011 and $4.975 million in 2012. When PPP reaches or exceeds $4.5 million, it seems reasonable to expect 100 percent bonuses at Wachtell, especially given the firm’s low leverage (roughly two associates per partner — and note that all Wachtell partners are equity partners).
Please note the caveat that this information about 2011 and 2012 bonuses did not come directly from people currently at the firm. As a result, we do not have the same degree of confidence in it that we usually have regarding our bonus coverage. If you have anything to add (or correct) about it — or if you have information about Wachtell’s 2013 bonuses, which we haven’t heard anything about, even indirectly — please email us or text us (646-820-8477). Thanks.
 Wachtell doesn’t fret too much about how much its associates are billing — in fact, it doesn’t even have an official billable-hours requirement — because of two factors. First, there’s so much work to go around that WLRK associates put in famously long hours. Second, the firm doesn’t charge its clients by the hour — hours are a factor in the total bill, but not the determining factor — so Wachtell’s not worried about hours from a revenue standpoint either.
If you’re interested in my thoughts on working at Wachtell Lipton, where I was a litigation associate from 2000 to 2003, you can check them out here (last few paragraphs).
Time Warner Cable Rejects Charter’s $61 Billion Takeover Bid [Bloomberg]
Wachtell Bonuses 2012/2013? [Top Law Schools]