Associate Bonus Watch: Cravath Announces!

So did Cravath, the usual first mover on associate bonuses, beat the Simpson Thacher scale?

When Simpson Thacher announced generous bonuses last Friday, the news came as something of a shock. The usual first mover on bonuses is Cravath, since time immemorial (or at least 2008, when Skadden stepped out first — and then saw everyone pay less).

In announcing bonuses first, was Simpson getting a little uppity in going out ahead of the traditional top dog? Was STB perhaps shamed by Elie Mystal’s post from last year, in which he chastised Simpson for going from being a leader — remember that STB was the firm that took starting salaries to $160K — to being a follower?

Anyway, regardless of Simpson’s motivations, I can now type a sentence I don’t often type: Cravath has matched Simpson (as opposed to the other way around). As Staci Zaretsky just quipped to me in Gchat, “Cravath matching another firm’s bonus scale feels so… dirty.”

But it doesn’t come as a shock to people. In the opinion poll that we posted when Simpson announced, 53 percent predicted that Cravath would match Simpson, just 11 percent expected Cravath to come over the top, and 36 percent suggested that Cravath might come in below Simpson. As one commenter said, “I don’t know if Cravath will match…. I can’t imagine they’re too pleased right now to see Simpson paying third-years $40k — but ideally it will at least put pressure on them to bump up their bonus scale so they don’t look like complete misers.”

How do the Cravathians themselves feel? Here is one CSM tipster’s take: “Not to look a gift horse in the mouth, but there was a hope that Cravath would stake out a place (again) as a compensation leader.”

With Cravath following Simpson, the bonus market for the big New York lockstep firms is probably pretty set now, with only Sullivan & Cromwell as a possible savior (or spoiler, depending on your point of view). C’mon, Uncle Joe, Biglaw associates need your help!

As usual, flip to the next page for the Cravath memo (which looks pretty standard in terms of wording; bonuses will be paid on Friday, December 19).

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