Associate Bonus Watch: Skadden 'Beats' Simpson, Kinda

For certain senior associates, Skadden will be paying more than the market -- how much more?

Bonuses are out at Skadden Arps — and they aren’t just a perfect match of the Simpson Thacher scale. There’s a twist.

When the Simpson scale came out on Friday, one of our sources observed: “Note that the bump is most significant for midlevel and senior associates. The junior people still are getting way below market in 2006. Simpson is saying midlevel and senior associates deserve more — and they do.”

It seems that Skadden also subscribes to that view. Skadden appears to have matched the Simpson scale, except at the very top: certain senior associates at Skadden will receive more than the market-level bonus of $100,000.

As longtime followers of bonus coverage know, Skadden does not issue a universal bonus memo listing every associate class and their bonus. Instead, a memo from executive partner Eric Friedman goes out to each class that states the applicable bonus for that particular class. We’ve heard of Simpson matches for the classes of 2013, 2012, 2011, and 2010, which suggests matching up and down the scale. But for associates from the class of 2007 and more senior classes, the Friedman memo contains this language:

In response to requests from associates that we update our compensation model for senior associates, this year there will be differentiated bonuses for associates in classes 2007 and senior. To more accurately reflect individual contributions to the Firm and our clients, distinctions will be based upon individual excellence, including quality of work, intensity of effort, depth of experience and Firm citizenship. While most of our associates in classes 2007 and senior will receive a bonus of $100,000, individual bonus amounts (which may be higher or lower) will be determined in the next two weeks applying the above criteria. Some associates in those classes will receive a bonus of $110,000 in recognition of extraordinary performance and intensity of effort. Payment will only be made to associates employed by the Firm on December 19th.

Note that parenthetical: individual bonuses “may be higher or lower.” Is Skadden, traditionally viewed as a lockstep firm regarding associate compensation, moving to a more individualized model?

Maybe, maybe not. One SASMF source of ours wouldn’t read much into this:

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[I]n the past year or two, the firm leadership said that they weren’t going to go down the road of a performance-based comp model. [G]iven that the difference between average and max is just $10k (still a nice chunk of change, but fairly low, percentage-wise), it’s probably more of a signaling mechanism than anything else. If I had to read the tea leaves, $110k means that you have a shot at promotion; $100k is “you’re doing ok, but keep your expectations in check”; and below $100k is “start dialing recruiters.”

But no need to make a move before December 19, when the Skadden bonuses will be paid. Congratulations, Skadden associates, on the nice bonuses — especially the senior associates getting the extra $10K. It might not be a huge amount of money, but it speaks volumes about your performance at the firm.

Flip to the next page to read the full Skadden memo for its most senior associates.

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