Akin Gump sent its bonus memo around the New York office yesterday. No real surprises. Akin is giving the "New York Market Bonus" to associates in good standing.

One bit of excitement is that "associates and counsel who performed in a truly exceptional manner in terms of both quality and productivity" may get "discretionary merit bonuses." So if you're an Akin NY associate who billed over 2400 hours this year, it may not have been done in vain.

The memo includes the increasingly common warning about a possible salary freeze come 2009. See the full memo, after the jump.

Mayer Brown has wished its NYC associates a merry Christmas Eve with bonuses matching the New York market (a.k.a. the Cravath/half-Skadden model).

Our tipster tells us there is no official word as to pay raises for 2009.

This announcement comes a month after Mayer announced layoffs of 33 attorneys, as well as administrative staff. Our tipster says rumors are making the rounds at Mayer of further layoffs in 2009.

Merry Christmas?

Full bonus memo after the jump.

Dear Jones Day threadjackers:

Here is your post about the Jones Day bonus. Now please put the lotion in the basket and give me back my dog.

Okay. Yesterday, Jones Day sent around its individual compensation letters. Traditionally, Jones Day makes bonus decisions on a case-by-case basis. This year is no different, but a tipster reports that the firm has generally decided to follow the Cravath scale.

Jones Day doesn't have a billable hours requirement. But because of the individual nature of the firm's decisions, some associates could be receiving more than people at Cravath, while some could get far less.

We also understand that Jones Day does everything it can to keep associates from knowing what the guy down the hall is taking home. A tipster reports:

All comp is confidential here. So no one knows what anyone else gets, unless you spill the beans, which is strongly discouraged. You just get your personal comp letter with your numbers.

Firm spokespeople could not be reached for comment about their bonus structure.

Our tipsters weigh in after the jump.

Individualized memos have been issued to Skadden Arps associates to inform them of their 2008 bonuses and 2009 base salaries. The Skadden base salaries reflect the customary annual pay raises -- sorry, Lathamites.

Because Skadden's announced bonuses this year are so much higher than the Cravath-established market level, folks at other firms have wondered: Are the Skadden bonuses for real?

The short answer: yes. To quote the famous Seinfeld episode, "they're real -- and they're spectacular."

We've surveyed Skadden associates from a variety of class years, from 2008 through 2001. The scale we've pieced together looks like this (i.e., like last year's year-end or regular bonus schedule, but without the "special" bonus amounts):

Class of 2008 -- $35,000 (prorated)
Class of 2007 -- $35,000
Class of 2006 -- $40,000
Class of 2005 -- $45,000
Class of 2004 -- $50,000
Class of 2003 -- $55,000
Class of 2002 -- $60,000
Class of 2001 -- $65,000

The bonus schedule is, of course, subject to the 1600-hour minimum. That's not an onerous burden, and pro bono hours count towards the minimum, in unlimited amounts. If you fall short of the 1600-hour minimum, you may still be eligible for a 50 percent bonus -- aka a "half-Skadden" bonus.

After the rest of the New York market settled around the Cravath bonus levels, some wondered: Do the Skadden partners feel like chumps?

Find out, after the jump.

Update (3:30 PM): Please note that this post has been revised in various respects since its original publication. The situation is fluid and we are investigating further. Thanks.

It's moving day. Time for the elite firms to separate themselves from everybody else.

Multiple tipsters inform us that O'Melveny & Myers associates, in California and in Washington, DC, received voicemails today confirming that first year associate bonuses would be... $27,500. The bonus scale for OMM, in CA and DC, is believed to look like this:

2007 - 27,500
2006 - 30,000
2005 - 32,500
2004 - 35,000
2003 - 37,500
2002 - 40,000
2001 and 2000 - 45,000

A tipster adds, "Everyone is also eligible for additional bonus amounts on top of that based on hours and performance."

We understand that OMM traditionally makes these announcements over voicemail. Bonuses will be paid on December 31st, with an official memo following in January. Oh, and just for good measure, class appropriate pay raises will proceed as planned. Eat your heart out, Latham.

Update (3:30 PM): It appears that these California and D.C. bonus levels are subject to a minimum hours requirement of 1950. In addition, it seems that O'Melveny's New York office is on the Cravath scale.

Update (3:45 PM): Associate editor Kashmir Hill just spoke by phone with an O'Melveny spokesperson. The spokesperson confirmed that OMM's California and DC offices are paying bonuses to associates that are higher than OMM in New York.

"For some time, we have set bonus levels at a competitive rate for local markets," she said. And as ATL readers know, this year the local market in New York is weak in terms of bonuses. The OMM rep pointed out that last year New York bonuses were higher than non-NYC bonuses.

In addition, the spokesperson added, the California and DC bonus scales are subject to a minimum hours requirement of 1950. Bonuses in New York are not subject to such a minimum (although "hours and merit are taken into account," according to OMM).

More after the jump.

Debevoise & Plimpton has been very busy and very profitable. They recently sent around a positive internal email about the firm's business during the downturn. And we know that the Siemens case has treated them well.

But in 2008, public protestations of solid business mean nothing when it comes to associate compensation. Debevoise announced that they were paying half of what Skadden is offering:

2008: $17,500 (pro-rated)
2007: $17,500

2006: $20,000

2005: $22,500

2004: $25,000

2003: $27,500

2002: $30,000

2001 (and senior): $32,500

The numbers -- while annoying -- are not really that surprising. Schulte Roth, housed in the same building, earlier today announced the same scale (although subject to an hours requirement). Even our Debevoise sources anticipated that, with Siemens winding down, the firm would be more forward-looking with this round of bonuses.

What is surprising is the timing of this bonus announcement. The email went out from managing partner Rick Evans at 6:54 p.m. WTF ("Sacré bleu" in Debevoise-speak)? Was management hoping to dodge the news cycle with an after-hours announcement? Somebody should let them know that the internets are on 24/7.

Our hearts go out to the Debevoise associates that were still working when this announcement crashed into their inboxes. Professionalism is its own reward. All Skadden associates are getting this Christmas is twice the money.

Read the full memo after the jump.

With the holidays two weeks away, many are starting to think about the frantic search for gifts for loved ones... and loved support staff. A Consumer Reports survey indicates that 76% of Americans will cut back on gift giving this year. Surprise, surprise. But what does it mean for planning your gift for your secretary and/or paralegal?

Writes one ATL reader:

I'm a NYC 4th year and for three years have given my secretary $100 per year I've been at my firm (plus a small -- $25 -- physical gift as well). If I follow that pattern, I'd give her $400 cash in a few weeks.

My secretary is great and I would like to show my appreciation. But this year, with my job hardly safe and my bonus likely to be at Half-Skadden levels (if I even survive long enough to get a bonus), does the $100 per year rule still apply in NYC?

I think we need a full post on this. It's not 2007 anymore.

$400 seems high, even for New York. We thought $150-200 was the going rate.

For the uninitiated, it's customary for associates at large law firms to give a cash gift to their administrative assistants, often along with a card or small gift. Not everyone opts for cold, hard cash-- some do AmEx or Visa gift cards. (If you do choose to go with bills, please make sure they are not of the soiled, dog-eared variety.)

One secretary wrote to us this year to voice opposition to the inter-office gift giving (and she's not the only one):

How should a legal secretary ask her lawyers to not give her gifts? I don't think Christmas has any place at work, and, though I respect and appreciate my lawyers, I don't want them giving me gifts. I find it awkward and embarrassing on many different levels. I've been at my current job 5 years and tried at first simply not reciprocating. But they never got the message. I'm dreading this year's ordeal like the plague. They make a little ceremony of calling me into an office as if I were in trouble. Please ask your readers what I might say that would stop the gifts without offending my guys. Thanks!

So, here's an open thread to discuss your gift-giving plans in the current economic environment. Are you scaling back this year due to a diminished bonus? What's the scale in your town? Does your paralegal get to sit on Santa's lap as well? And if your secretary wants no part in the 12 days of Christmas, how should she let you know?

If the second-most profitable law firm in the nation cuts bonuses by 73%, what do you expect regional firms to do?

Today, the management committee at Epstein Becker & Green made a decision that we will probably be copied at regional firms throughout the country. From the EBG internal memo:

The cautiousness of the Firm's clients regarding their cash position has continued to affect EBG's cash collections through November. We, like all law firms in 2008, are experiencing a slower pace of payments to the Firm from our clients than in prior years. While we are confident that these monies will be collected over time and we are well positioned for 2009, cash available at year end is, as a consequence, more limited than it has been in years when the economy was stronger.

Reflecting this reality, and on our history of conservative but responsible fiscal management that dictates prudence in retaining our cash reserves and not incurring additional debt for non-capital expenses -- thereby protecting the Firm's position as we enter 2009 -- the Compensation Committee has determined that no bonuses will be paid at year end 2008. While we do not make this decision lightly, at a time when many law firms and businesses are engaged in large-scale lay-offs or worse, this decision is, we believe, a moderate response to what are unprecedented circumstances facing our industry.

Remember that a problem many firms are facing right now is that while attorneys keep billing, some clients have stopped paying.

EBG is the first firm that we're aware of that is offering the "special bonus" of zero. But they won't be the last. Don't forget to send us your tips on other mid-sized and regional firms as they make difficult bonus decisions this year.

Read the unabridged statement that EBG attorneys received today, after the jump.

Another law firm informed associates that their hard work was worth half of what it was a year ago. Davis Polk & Wardwell is the latest firm to announce Half-Skadden bonuses.

The official DPW bonus structure is as follows:

Class of 2008: $17,500 (prorated)

Class of 2007: $17,500

Class of 2006: $20,000

Class of 2005: $22,500

Class of 2004: $25,000

Class of 2003: $27,500

Class of 2002: $30,000

Class of 2001 and senior $32,500

So much for elite law firms paying their associates at the top of the market. Instead, Cravath has succeeded in opening the door to the "thank you sir, may I have another" theory of associate retention and company morale.

It could be worse. These guys are are still getting a bigger bonus than law students who interviewed with Skadden this year. Yay seniority!

What is particularly annoying about the DPW memo is that they act like they are meeting the market with these bonuses, as if Skadden doesn't even exist.

We are pleased to announce that associates in good standing will receive a bonus payment as outlined below. ...

We thank all our associates for their diligent and skillful efforts as we support our clients in this challenging economic environment.

"Pleased to announce." Not "horribly embarrassed that we are slavishly short-changing our associates because Daddy-Cravath said it was okay."

Read the full memo after the jump.

Thacher Proffitt & Wood has been struggling for some time. A memo sent by managing partner Paul Tvetenstrand to TPW staff the Wednesday before Thanksgiving provides the latest evidence of the firm's faltering state:

From: Paul D. Tvetenstrand

To: Non-legal staff

As you are aware. The past year has posed many challenges for the firm given the downturn in the economic climate which has affected our clients and ultimately the firm. Unfortunately given this continuing downturn the firm will not be able to pay any bonuses or year end service awards this year. We truly appreciate the contributions each of you has made in these trying times and we wish we were able to recognize each of you as you deserve.

Paul

I'm not at all sure why TPW tried to bury this information within the Thanksgiving news cycle. Did they think TPW staffers were not going to notice? Maybe they were thinking of maintaining their industry reputation, but most people who have been paying attention already know that TPW is in serious trouble.

More TPW back story after the jump.

"Not God Bless America, God-damn America."

We are now able to report that Simpson Thacher & Bartlett has matched bonuses with Half-Skadden:

On behalf of the partners of the Firm, I would like to announce that year-end bonuses for associates in good standing will be as follows:

Class of 2008: $17,500 (pro-rated)

Class of 2007: $17,500

Class of 2006: $20,000

Class of 2005: $22,500

Class of 2004: $25,000

Class of 2003: $27,500

Class of 2002: $30,000

Class of 2001: $32,500

Class of 2000: $32,500

Cravath has doomed us all.

After the jump, more analysis and the full STB memo.

In the two weeks since our ATL / Lateral Link survey on bonuses, we've talked about when bonuses were and will (or won't) be paid, how your billable hours look this year, and what you expect bonuses to be for 2008.

Or, at least, what you expected them to be before the Skadden and half-Skadden bonus announcements late last week.

But we haven't yet reported on your answer to the following question: "If getting a lower bonus this year meant that your firm could completely avoid layoffs, what's the minimum bonus that you would consider fair?"

Some initial comments were a bit dismissive of the question, and were more than happy to dismiss a few associates, too:

Don't care about layoffs, and so wouldn't sacrifice a nickel in bonus to avoid them. Layoffs, if any at my firm, won't reach my class (2004). If they do, they won't reach my practice area (litigation). If they do, they won't reach me.

lay off the lazy a-holes. I billed 3000 this year.

Would prefer higher bonus with layoffs

But as a severe rash of layoffs followed, hearts began to soften, much like the market for structured finance associates:

  * Almost one fourth of practicing respondents would accept a bonus of zero this year to avoid layoffs.

  * More than half would accept a bonus of $20K or less.

  * Only about 5% still insist on bonuses of at least $75K.

Results: What were your hours and bonus in 2007, and what do you expect for 2008?

See breakdowns of morale by seniority, market and practice, as well as a Cravath vs. Skadden comparison, after the jump.

We expected this. Skadden has announced that they will discontinue the "special" bonuses from last year. Instead, they'll be giving out the 2006/2007 standard package. From the memo, sent out by executive partner Bob Sheehan:

[W]e will pay the year-end discretionary bonus at the same levels by class seniority which associates received in 2007 and 2006. However, we do not think it is appropriate to repeat the "special" supplemental bonus that was instituted last year. That bonus reflected a strong and growing economy that contributed to a record level of profitability.

The Firm has historically paid its associates at the "top of the market" in their respective local markets. While we do not know what other firms will do this year with regard to paying a supplemental bonus, we believe that our bonuses this year should be limited to the year-end discretionary bonus. What we will do in the future years, will, of course, depend on business conditions at the time and competitive compensation.

You will receive a memo early in December discussing your individual bonus. We appreciate the efforts you have all put in this year. You have contributed enormously to the success that we have achieved.

That should pretty much set the market.

The 2007 bonuses weren't bad. And Skadden isn't laying people off. It'll be pretty hard to complain if this is where the market ends up.

And, not for nothing, it shows good form by Skadden for telling people what to expect before the holiday season starts. That winter vacation to the Dominican Republic can now proceed full speed ahead.

Read the full memo after the jump.

We've received over a thousand responses to last Monday's ATL / Lateral Link survey on bonuses, and so far we've talked about when bonuses were and will (or won't) be paid and how your billable hours look this year.

Today, we get down to the hardest numbers of all: what do you think you'll actually get paid?

2007 was a very good year for bonuses, with over 90% of respondents (not counting stub years) reporting a bonus even though only 70% made 2000 hours.

Roughly half of you reported bonuses of at least $45,000. About 15% of you made $70,000 or more, and 7% of you claim to have broken six figures.

This year, well . . . not quite so much.

Details after the jump, so nervous T-10 1L can take a moment to prepare himself.

We've tentatively started the Associate Bonus Watch for 2008, with news of Orrick's and McDermott's bonus plans, and the not-really-news that Morgan Lewis will not make bonus decisions until after the holidays.

With the dismal economy and the widespread law firm layoffs, we speculated last month that regular bonuses may be less than last year, and "special" bonuses would likely disappear. The New York Law Journal agrees with us, and suggests two other reasons for it:

The scale of the expense and the almost compulsory nature of the market are widely resented by partners. But they also realize bonuses play a huge role in associate morale, recruitment and retention. Most managing partners who spoke to the Law Journal about bonuses cited potential problems with associates in requesting anonymity. But this year they all also mentioned another interest group keeping a watchful eye on bonuses: clients.

So, reason one: If they give you a bonus, you might tell someone, um, like Above The Law. And reason two: pressure from clients to control costs. Anonymous firm leaders say they fear the effect a big bonus announcement would have on their fee negotiations with belt-tightening clients, especially those in the financial sector.

Orrick chairman Ralph Baxter notes that while Orrick will still pay bonuses, "performance factors, including billable hours, will reduce the number of associates at the firm" who actually get a bonus.

The article suggests that the dismal economy could provide the opportunity that some firms have been looking to escape the bonus bidding war, and eliminate associate bonuses all together. We know you're worried. In a recent Lateral Link survey by Justin Bernold, one out of every thirteen respondents was unsure when, or if, bonuses would be paid. But as The New York Law Journal notes:

Of course, much will depend on what Cravath and Sullivan & Cromwell do.

As always, we welcome bonus news and memos via email (subject line: "Associate Bonus Watch").

Firms Rethink the Value Of Associate Bonuses [New York Law Journal]

Earlier: Associate Bonus Watch: McDermott Will & Emery is Sticking to the Plan ... For Now
Associate Bonus Watch: Orrick Stands Behind Bonus Structure
Associate Bonus Watch: Morgan Lewis Pushes Back Bonus Decisions
Open Thread: Associate Bonus Speculation

We've received over 900 responses so far to Monday's ATL / Lateral Link survey on bonuses, which is still open here.

Although ATL had predicted that bonus announcements may come later this year, McDermott Will & Emery actually announced the "December Bonus Advance" portion of their bonus plan mere hours after our survey went live, quickly proving a portion of us wrong, and rendering a portion of their associates reassured.

Overall, most respondents expect that their firms will pay bonuses on roughly the same schedule as they did for 2007:

Results: When Did, Or Will, Your Firm Pay Bonuses?

The results above only include responses from people who were at firms last year, are still at firms now, and can actually remember that sweet, sweet day when their bonuses were paid for 2007. While the overwhelming majority of these respondents received a bonus last year, and expect at least the timing of bonuses to remain the same for 2008, a meaningful number are definitely concerned: roughly one in thirteen of these respondents either aren't sure about when their firms will be paying bonuses or, worse yet, don't think their firms will pay bonuses at all for 2008.

Find out which firms paid when last year, and see some preliminary results on whether your peers would trade their bonuses for better job security, after the jump.

Last week, our ATL / Lateral Link survey focused on when raises happen at your firms. But we've also been wondering about another prong of compensation: bonuses.

In 2007, Cravath kicked off bonus season early, on October 29th, but it's much more common for firms to announce in December. Indeed, this year the first major announcement of October came from Morgan Lewis, who announced that they won't be announcing bonus until January. (That said, though, Orrick announced their 2008 bonus structure back in June.)

But timing isn't everything. There's also the quantum of solace cash. On that front, comments in last month's associate bonus open thread suggest some pretty diminished expectations. As one reader put it:

This year's bonus in biglaw: you're not fired. Let's hope most of us can get it.

But a second reader posits that firms can leave last year's bonus structures in place . . . because billable hours are actually low enough to avoid a cash crunch:

If firms keep the same bonus structure, they will still be spending *way* less on bonuses this year. That's because so few people will make their hours. Most associates are way down compared to last year, and November and December are only going to be worse in terms of finding work to do. It wouldn't surprise me if many firms will save 50% or more without making any adjustments to the bonus structure. That's what gives me some hope that bonuses will remain the same. Of course, firms would be happy to use the remaining 50% of bonus money on other things. But they won't want to chase away the few associates who are actually competent enough to make their hours.

Now, if I can just find a way to stay busy through November and December. . .

Sort of a "glass half full, so you don't really have to tip" approach.

Do you agree? Are your billables really so low that you won't get any bonus this year?

For that matter, would you actually give up your bonus this year if it would reduce the risk of layoffs?

Let's find out.

Update: This survey is now closed. You can see results here, here, here, and here.

--
Justin Bernold is a Director at Lateral Link, the sponsor of this Associate Life Survey.

When we kicked off our associate bonus speculation, we mentioned that Orrick, Herrington & Sutcliffe had already locked themselves into a 2008 bonus structure. We wondered if Orrick might rethink their bonuses in light of the current state of the economy. Morgan Lewis has already announced that they will not be making bonus decisions until 2009, when they hope to have a better read on the economy.

Today, Orrick assured us that the firm would not look to change their bonus plan. A firm spokesperson put the issue succinctly:

We are committed to using the previously announced bonus schedule.

This year's bonuses are secured, but Orrick is still considering a much longer term change: ending the lockstep structure of associate salary.

Orrick chairman Ralph Baxter has spoken about this issue before. In an article for the American Lawyer this summer, Baxter pointed out the value of the current, lockstep system. But he also said:

Given the changing nature of the law practice, the changing expectations of clients, the changing outlook of Generation Y, law firms would be remiss if they did not re-examine the associate model.

We understand that Baxter has been cautiously talking to people and gauging interest in this idea.

But it is not this day. More after the jump.

Given the list of associate "perks" firms could be cutting back on during these tough economic times, the latest news from Fried Frank seems very reasonable. Associates at Fried Frank were told today:

Dear All,

In light of continued turmoil in the financial markets and the wider economy, and the effect it is having on so many we know, we think it is not appropriate to host Firm holiday parties this year.

The Firm has a strong platform and business with which to succeed in this very demanding business environment and continues to be involved in many interesting and challenging matters for our clients. Instead of the parties, the Firm will be making charitable contributions to certain organizations who rely on donations during the holiday season to accomplish their purpose during this time of year and which are feeling the effects of the slowdown in the economy.

Thanks very much.

Valerie Jacob and Justin Spendlove

Despite the success of last year's bash at Cipriani on Wall Street, this would seem to help associates in two ways. It saves the firm money -- without firing anybody. That is an unqualified good.

But also: who enjoys the firm holiday party anyway? It's just an opportunity for associates to get too drunk and do something colossally stupid that will no doubt end up on Above the Law. (Please don't cancel the holiday party Mr. Fried and Mr. Frank!)

Seriously though, saving a bit of cash is a good thing for associates. And not for nothing, but giving some extra money to charities during what is sure to be a terrible season for charitable donations is really a great thing to do. During times of economic recession people tend to give less, precisely at times when charities need more.

But it might not be all Salvation Santas at Fried Frank this winter. More after the jump.

Bloomberg News is reporting that the train wreck formerly known as Lehman Brothers filed an application to pay Weil Gotshal attorneys a whole boatload of cash:

The investment bank asked for court approval to pay $650 to $950 an hour for partners and counsel, $355 to $595 for associates and $155 to $295 for paraprofessionals.

A year ago, the WSJ Law Blog did a report on the Thousand-Dollar Bar. There were only six lawyers on that list. So while $950 an hour isn't astronomical, it's clear that Lehman is getting the most expensive bankruptcy money can buy.

At the upper end, $595 per associate hour is pretty good money as well.

Whenever we mention that Weil could be a bonus leader this season a smart commenter always disagrees:

Weil will never be a bonus leader because there is concern at the firm that it would seem unsightly by the firm's bankruptcy clients to lead the market with bonuses

Good point. Still, there is a lot of money floating around Weil these days. Are you sure that they won't trickle cash rewards down on associates?

We'll wait and see.

Weil May Get $950 an Hour for Lehman Bankruptcy Work (Update1) [Bloomberg]
The Law Blog Thousand-Dollar Bar [WSJ Law Blog]

Earlier: Weil Gotshal Produces The Mother Of All "We're Awesome" Emails