Just a few hours after Simpson Thacher kicked off the 2014 bonus season with a rather generous bonus scale, another leading law firm has matched.
Paul Weiss, a firm that by all accounts has been having a very good year, just announced bonuses that follow the Simpson scale. This significantly reduces the likelihood of Cravath showing up and taking the market lower, as it did back in 2008.
This tipster’s take is representative of sentiment at Paul Weiss:
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Everyone seems VERY happy, especially the mid-level and senior associates. People are particularly excited that PW is showing itself to be a leader in compensation after many years of record-breaking profits.
From another source:
Not surprised, given all the talk about record profits, booming business, etc., but certainly happy. There was concern that Cravath would come out with 2013-level bonuses and PW would follow suit, so I’m glad that was not the case.
A third tipster was more succinct:
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Freakin’ awesome.
A question: could these big bonuses signify that another pay raise is on the way? As of January, eight years will have passed since the last big increase in base salaries (led by Simpson Thacher, as you may recall).
Or do hefty bonuses perhaps reduce the pressure for a pay raise, on the theory that law firms can do things “Wall Street”-style — i.e., see how the year turns out, and reward people handsomely at year-end? From the partnership’s perspective, why commit yourself to the high fixed costs of large base salaries when you can make your associates share the risk with you through bonuses?
You can flip to the next page to read the memo from Brad Karp. Congratulations to Paul Weiss associates on the nice bonuses.