Today we’ll take a look at bonuses over at Baker Botts. Is it true that everything is bigger in Texas?
- Associate Bonus Watch 2011, Associate Salaries, Biglaw, Bonuses, Killing Lockstep, Money, Partner Issues
Congratulations to Bingham McCutchen, which recently earned a spot on Fortune’s best companies to work for — for the eighth year in a row. And congratulations to Bingham’s nine new partners. It’s a very international group: these seven men and two women work out of London (3), New York (3), Hong Kong (1), Boston (1), and Hartford (1).
And congratulations to high-billing associates at Bingham. They were rewarded with “extraordinary” bonuses, as set forth in the firm’s bonus memo….
- American Bar Association / ABA, Antonin Scalia, Biglaw, Clerkships, Money, Quote of the Day, SCOTUS, Supreme Court, Supreme Court Clerks
Society cannot afford to have such a huge proportion of its best minds going into the law.
(Justice Scalia comments on Biglaw’s flawed compensation system, after the jump.)
Today everyone’s talking tech, thanks to Facebook’s upcoming IPO. In light of how Silicon Valley is dominating the news cycle, it seems fitting to discuss the recent bonus and salary news from Wilson Sonsini — one of SV’s top firms, and counsel over the years to many startup companies turned tech giants.
So what kind of bonuses did WSGR just announce? Let’s find out….
Tomorrow, associates at Goodwin Procter will receive individualized news of their bonuses. You may recall that last month, when ATL’s new director of research, Brian Dalton, compiled a list of Biglaw’s ten most generous firms — i.e., the ten firms that pay the best bonuses, when measured against their profits per partner — Goodwin did good, winning fourth place. (The firm fares well in rankings; last month, it made Crain’s list of best places to work in New York.)
Will this year’s bonuses preserve Goodwin’s good standing? Let’s find out. Although the individual amounts are being communicated tomorrow, the firm has outlined its overall approach in a memo….
- Akin Gump, Associate Bonus Watch 2011, Associate Salaries, Bonuses, Dewey & LeBoeuf, Ho-Love, Money, Partner Profits
This morning’s news that Boies Schiller is making a mockery of the Cravath bonus scale simply reinforces the prevailing view (pace David Lat) around here that the 2011 Cravath bonus scale is fundamentally unfair.
Agreeing on this point is former Kirkland & Ellis partner Steven Harper (whose apparent pro-associate stance may make him a sort of Biglaw apostate). As Harper points out, “equity partner profit trees have resumed their growth to the sky. As the economy struggled, Cravath’s average partner profits increased to $2.7 million in 2009 and to $3.17 million in 2010 … That’s not ‘treading water.’ It’s returning to 2007 profit levels — the height of ‘amazing’ boom years that most observers had declared gone forever. Watch for 2011 profits to be even higher.”
And yet associate bonuses remain stagnant at 2009 levels. Furthermore, as ATL commenter “The Cravath Cut” is so fond of noting, when viewed as a percentage of profits, bonuses appear especially measly, at least from the associate p.o.v. (The current $7,500 market rate for first-years is just 0.23% of Cravath’s profits per partner. Back in 2007, first-year bonuses equalled 1.36%.) Despite these numbers, if history has taught us anything, it is that
you can kill anyone Biglaw’s rank and file will follow Cravath’s lead.
Cravath is among the most profitable firms in the world. We thought it would be interesting to see what the implications of matching Cravath are for those firms with much lower profit margins. Which firms’ partners willingly take the biggest hit by keeping up? Are these firms arguably more “generous”? After the jump, check out those firms that pay the largest percentage of PPP in bonuses.
It took a little longer than most of you expected, but Cravath, Swaine & Moore just announced its 2011 associate bonuses (not long after announcing its new partners). Barring something very unforeseen, these bonuses are what many Biglaw firms, in New York and across the land, will pay out this year to their people. Historically Cravath has set the market with respect to year-end associate bonuses at major law firms.
The Cravath bonuses are what you might expect. They are in line with recent years, nothing crazy high or ridiculously low. Both Occupy Wall Street types and law firm associates can put away the pitchforks.
Let’s take a look at the official memorandum, and engage in some analysis….
There’s an interesting post up on Constitutional Daily by The Philadelphia Lawyer. It’s a repack from a 2007 article arguing that salaries for first-year associates should go up to $190,000 a year.
And he’s right.
I know, I know — most Americans are still feeling the effects of a terrible economy. Occupy Wall Street is about to take pitchforks to those who are well-off in this country. Yada, yada, we’ll get back to the very sad story of America momentarily.
But you know who has done well over the last five years or so? Law firms. Especially Biglaw firms. Especially partners at Biglaw firms. Just look at the Am Law reports on profits per partner and revenue per lawyer. Firms are making money, more than they were in 2007.
Yet the associate salary scale hasn’t seen a raise for almost five years. And bonuses are down compared to 2007. Is it time for firms to start sharing the wealth?
Summer associate programs are largely over (although we still want to hear about fun events and offer rates). Many associates and partners are taking vacation (especially if they have children they want to spend time with before school starts again).
On the litigation side, courts are slow because many judges are away. On the corporate side, some deals have been put on hold due to the gyrating stock market and economic uncertainty. We seem to be turning into Europe, where a good chunk of the population takes vacation for a good chunk of August.
But we still have pockets of law firm news to report, here and there. Today’s dispatch comes from Schiff Hardin, which earlier this month announced an associate pay raise….