Apparently Sullivan & Cromwell is no longer the only Biglaw shop paying a $50,000 clerkship bonus. According to multiple sources, Simpson Thacher & Bartlett — which in January kicked off the latest round of base salary increases for associates — has followed suit.
If S&C were the only member of the $50K club, competitor firms could afford not to follow suit. We agree with what this tipster had to say (prior to the Simpson Thacher match):
“What I gather from this general reluctance on the part of NY firms to match S&C’s $50K clerkship bonus is that there’s an emerging view within the legal market that S&C’s decision to ‘surge’ their bonus rate is, in some sense, an anticipation that they’re going to have a tough recruiting season this fall.”
“This clerkship bonus craze has nothing to do with clerks — and anyone who thinks otherwise is mistaken. What firms do care about is a bunch of newbie 2Ls (who are a month or so away from wrapping up 1L year right now), with nothing more than a pedestrian understanding on how Firm A differs from Firm B, going to S&C’s website and seeing that they offer $50K and then going to, say, Davis Polk’s and seeing that they offer less than a third of that.”
“My hunch is that if one more top firm matches S&C, then the rest will soon follow. The big question is who moves first — and when.”
We concur in this analysis. Now that Simpson has joined Sullivan & Cromwell, resisting the clerkship bonus trend will prove more difficult (at least for other top ten New York firms). Expect places like Cravath, Davis Polk, and Cleary Gottlieb to fall into line.
Have you heard of anyone else matching? Please email us (subject line: “Clerkship Bonus”). Thanks. Earlier: Skaddenfreude: A Clerkship Bonus Special Report
On the heels of Sullivan & Cromwell’s announcement of its new $50,000 clerkship bonus, we will endeavor to find out what other large law firms are doing on this front.
If you know your law firm’s current clerkship bonus policy, please email us (subject line: “Clerkship Bonus”). We will serve as a clearinghouse for clerkship bonus information. We will collect your tips, organize them, resolve conflicts where they exist, and perhaps do some fact-checking where necessary.
(Our preference is for you to email this information to us, rather than to post it in the comments. Email allows us to pose follow-up questions of sources, which we can’t do with someone who posts a comment anonymously. As always, we do not reveal the names of sources, unless they request attribution. Thanks.)
Word on thestreet is that Sullivan & Cromwell is now paying a $50,000 clerkship bonus. In addition to Greedy Clerks, the news has surfaced in comments on this blog, and we’ve also heard about it via email. So the tip seems fairly reliable to us.
We first learned the news from a tipster with two prior clerkships, which raised the possibility that the $50K bonus reflected more than one clerkship. But it now appears that it’s actually a flat $50,000 bonus for anyone with a prior clerkship (i.e., a second clerkship doesn’t give you a second clerkship bonus (unless it’s a Supreme Court clerkship)).
Considering that a significant number of S&C associates come to the firm after having clerked, this rather large clerkship bonus is almost like a second pay raise (on the heels of the recent Simpson Thacher-induced salary bump). It appears to be second only to Kellogg Huber’s $100,000 clerkship bonus, and certainly the largest such bonus in New York.
So who cares about a few nastypartners? Sullivan & Cromwell is telling former clerks: “There’s $50,000. Bend over and pick it up — I’m sure you like that.” And many clerks will probably respond, “You bet we do! Fifty grand is pretty much equal to a law clerk’s annual salary.”
Feel free to discuss this development, or other clerkship bonus news and rumors, in this open thread. S & C Raises Clerkship Bonuses! [Infirmation / Greedy Clerks]
Or, perhaps more importantly, their $200,000 signing bonuses? That’s the question Dahlia Lithwick takes on in her recent Jurisprudence column for Slate.
The sums in question are even larger than Lithwick notes. She writes:
That will be [a] $200,000 [bonus] on top of a starting salary of $145,000 to $160,000. Which adds up to an awful lot of Pottery Barn sectional furniture for someone who is, on average, 26 years old and just two years out of school. As Chief Justice John Roberts pointed out recently, that $360,000 beats the heck out of the $212,100 he’s taking home for, well, chief justice-ing the entire nation.
Actually, the starting salaries are even higher, since pretty much all firms give Supreme Court clerks seniority credit for their two years of clerking. So a clerk who went straight through to a feeder judge, the SCOTUS, and a private law firm would be paid like a third-year associate: $170,000 in Washington, or $185,000 in New York (or in the D.C. office of a New York firm).
Lithwick interviews Walter Dellinger and Carter Phillips, who offer various justifications for the outsized bonuses as an economic matter. We have our doubts — and are quoted as a dissenting opinion:
On his legal gossip blog, Abovethelaw.com, David Lat tracks lawyer salaries with the glee most of us reserve for American Idol. And according to him, the hefty law clerk bonus stopped making any real economic sense several decimal points ago. Lat notes that these new associates just don’t bill extraordinary hours; that boutique appellate practice isn’t that lucrative; and a good many former clerks have academic aspirations. “They’re billing 1,800 hours, not 2,500, and a lot of them are probably already working on their job talks,” he says, referring to their sales pitches for the academic market.
The real allure of the Supreme Court clerk, says Lat, is that they are trophy purchases, “something for a firm to crow about in their recruiting materials.” Ouch. If Lat is correct about this, the boutique firms are buying former Supreme Court clerks when they might be better off investing in something more enduring, like new leather sofas for their lobbies.
We stand by these remarks, but maybe we’d remove the “Ouch.” These bonuses don’t make pure economic sense (in our opinion); but neither do many other things that law firms spend gobs of money on. If a firm wants to drop $200,000 on a SCOTUS clerk, or on an Alexander Calder for the lobby, that’s their prerogative.
We’re quoted later in Lithwick’s piece:
[S]ome firms, notes Lat, have decided to stop pursing the Supreme Court clerks and spend their recruiting dollars on what he characterizes as the near misses. “For every one of the 36 smartest law kids,” he says, “there is another equally smart law kid who just had a bad interview [for a Court clerkship].” And if law firms make the economic decision to give bonuses to them, “they get all the benefits of a knock-off Prada purse: They perform the same function, they look great, and you know they’ll do a great job.”
We’d single out Kellogg Huber of D.C. as one such firm. Some of you have expressed curiosity about who pays the biggest clerkship bonuses. We believe it’s Kellogg Huber. This tiny, super-elite Washington litigation boutique is rumored to pay clerkship bonuses of $100,000 to federal appeals court clerks — and for that kind of money, combined with the firm’s small size, it can afford to be picky. The non-SCOTUS clerks at the firm tend to be those who came thisclose to landing a job at One First Street (e.g., feeder-judge clerks who interviewed unsuccessfully for Supreme Court gigs). Update: Do you have an opinion on whether Supreme Court clerkship bonuses are too high, too low, or just right? You can express it by voting in our poll. To vote, click here. What to make of those astronomical Supreme Court signing bonuses? [Slate]
Law firm bonus season ended some time ago. Most Biglaw shops paid out bonuses to their associates weeks ago.
But a few firms are still in the process of announcing and distributing the dough. For example, we hear that the Chicago office of Mayer Brown Rowe & Maw might not announce until next month.
Hughes Hubbard & Reed just announced its bonuses yesterday. They appear to be a bit below market (although the firm employs a “tiering” system that’s different from the bonus structure at most other places).
For those of you interested in non-New York compensation information, the Hughes Hubbard memo addresses L.A. and D.C. bonuses as well. Check it out, after the jump.
Before the holidays, we asked the Biglaw associates among you to tell us how you feel about your bonuses. (We’d use “boni,” since it sounds cooler, but we don’t think it’s a real word.)
We conducted a reader poll. The results, which we realize aren’t terribly exciting, are reproduced at right.
The most popular response, although not by an overwhelming margin, was “Neither Satisfied nor Dissatisfied.” The rest of the responses formed a bell-shaped curve around that general sentiment of “Eh” (but with slightly more votes on the dissatisfied rather than satisfied side).
What does this all mean? We think it shows that as far as the Greedy Partners are concerned, associate bonuses were “just right.” If they had been “too generous” — from the perspective of partners, that is — there would have been more satisfied responses, from pleasantly surprised associates. And if they had been “too stingy,” in a way threatening to firm morale, there would have been more dissatisfied responses.
Instead, associate sentiment in response to this year’s bonus levels fell right in the middle. This suggests that associate expectations were perfectly met — neither missed nor exceeded. So, as far as the firms are concerned, the 2006 bonuses weren’t so big as to eat into profits per partner, but just enough to keep the associate proletariat toiling away.
Are year-end bonuses the opium of the Biglaw masses? Earlier: Associate Bonus Watch: How Does That Bonus Make You FEEL?
Most major law firms have paid out, or are about to pay out, their 2006 associate bonuses. And we all know what that means: a massive exodus from Biglaw of frustrated midlevel associates (with new flat-screen TVs).
From an unexpected source for law firm news, the New York Post, comes this excellent article:
The city’s largest, most prestigious law firms are suffering from serious brain drain.
Young, Gen-X lawyers in their third to fifth year in the business are walking away from their $200,000-a-year positions in record numbers — at times without another job in view.
The reason? They are unhappy with their Blackberry lifestyle — being tethered to the job 24/7 and having to rush back to the office at a moment’s notice when e-mail orders pop up on the ubiquitous PDA.
Here are some of the consequences:
The big-firm brain drain is also giving partners a major case of agita — forcing them to do the yeoman grunt work usually assigned to associates. In addition, the firms are being forced to scramble to fill the mid-level talent void. Some are even doing the previously unheard of — hiring from second-tier law schools.
Oh no — ring the alarm! As the Book of Revelation teaches, when Fortune 500 document dumps are being reviewed by Cardozo rather than Columbia grads, the end is near. Lawyers, Fun & Money: Brain Drain Hits Major Law Firms [New York Post]
P.S. If you’re an outgoing Biglaw associate wondering what to do next, check out this exciting job opportunity.
P.P.S. We’ll close our associate bonus poll shortly. If you haven’t already voted and would like to do so, click here.
Law firm bonus season is over, at least in terms of announcements (even though some firms won’t dole out the cash until next year). We’d like to use this quiet week to do some final follow-up and housekeeping on the bonus front.
Please email us, at tips AT abovethelaw DOT com, with any of the following:
(1) any significant New York bonus announcements that we missed;
(2) any bonus announcement memo that we’re missing — e.g., the Proskauer memo (if there was one) — because we like to archive these for posterity; and
(3) any non-New York bonus news you’d like to pass along (since we realize we’ve been neglecting legal markets outside NYC).
You can see what we have and haven’t covered by clicking here, and scrolling down through our past bonus coverage. Or you can search the entire site for the name of the firm in question.
Also, if you haven’t done so already, please take our Biglaw bonus poll. We’ll keep the voting open until at least January 2. Re: Low Bonus? No Bonus? Anyone hear of this? [Infirmation / Greedy NY]
The week before a major holiday is usually pretty slow. And the Friday before the holiday weekend is usually dead — the perfect time for Mike Nifong to announce he’s dropping the rape charges against the Duke lacrosse team defendants.
Other highlights from the past week in legal news and ATL:
* Get to know this year’s Alito clerks!
* And help us get to know the current Breyer clerks.
* Dean Harold Koh’s Christmas gift to Yale Law School conservatives: newfound warmth and friendliness.
* Speaking of Yale Law School, YLS grad Yul Kwon just won Survivor. Congrats, Yul!
* Stuff you knew already: Supreme Court clerks are cooler than you. Lawyers have mediocre sex lives. Pro se litigants are insane.
* Last week dragged in a few more law firm bonus announcements, but nothing exciting. To skim the coverage, click here, then scroll down through the headlines.
* On the subject of bonuses, Biglaw associates: Please take our 2006 bonus poll (first announced here):
The British firm’s New York office announced market bonuses — except for the class of 2006, who got slightly above-market bonuses of $11,000 (or $35,000 prorated).
Biglaw associates: If you haven’t already done so, please take our bonus poll. Thanks! Earlier: Prior ATL coverage of bonuses (scroll down)
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months (Robert Kinney and Evan Jowers will be in Hong Kong again March 15 to 23), and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
Are you challenged by the costs and logistics of maintaining your office, distracting you from the practice of law?
Many small firms are successfully moving part—or even all—of their practice to a virtual setting. This even includes multi-jurisdictional practice spanning several states and practice areas, although solo and small partnerships are still the largest adopters of virtual law.
Can you do the same? The new article Mobile in Practice, Virtual by Design from author Jared Correia, Esq., explores how mobile technology bring real-life benefits to a small law firm. Read this new article—the next in Thomson Reuters’ Independent Thinking series for small firms—to explore how a mobile practice:
Everyone is talking about the importance of Social Media in Corporate America. But it is relatively safe to say that most law firms and lawyers are slightly behind the social curve. Most lawyers, at minimum, use LinkedIn, for networking. Some even use Twitter for pushing out short, pithy content, while many have Blogs, where they write their little hearts out. The adage “it is better to give than to receive” is not always true though in the world of Social. In the Social World – it is best to listen, give back and engage.
Social Media is a communications tool that can deeply educate you about the needs and wants of your clients and prospects when used in conjunction social media monitoring and sharing tools.
Take this quick quiz and see if you know how to use Social to help you engage more with your clients or to better service the ones you have.