Biglaw

Paul Weiss Won't Be Offering Fall Bonuses, And Associates Are ANGRY

Is this the end of fall COVID appreciation bonuses?

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Seven days ago, Cravath entered the fall bonus scene empty-handed, announcing that associates would not receive an extra cent from the firm until the fourth quarter. Since that time, not a single firm has issued bonus payments to associates; instead, firms have only mimicked Cravath in saying that no bonuses will be issued prior to their customary timing. It now looks like Cravath may have crushed associates’ hopes and dreams for additional compensation this fall, because yet another Biglaw firm has stepped out to say bonuses won’t be coming.

In the wee hours of the morning, under cover of darkness, Paul Weiss announced that the firm would not be offering special bonuses this fall. Instead, chairman Brad Karp offered the usual old chestnuts about associates’ dedication and the firm’s values during these trying times (even naming two colleagues who had recently passed away). Here’s an excerpt from the memo Karp sent at 1:43 a.m. (available on the next page):

Over the past couple of weeks, some of our peer firms have announced special “pandemic” bonuses, while others have announced that they would not pay such bonuses.  We have considered whether to distribute such bonuses, in advance of our regular year-end bonuses.  After consulting with the Associates Committee and our partners and after hearing from several of our clients, I have concluded that announcing such a bonus now would not be appropriate.  So many of our clients and others across our community are experiencing unprecedented economic trauma, including the shuttering of their businesses and the loss of hundreds of thousands of jobs, as a direct result of this pandemic.  Providing a special cash reward in direct response to the pandemic does not feel right at this time.  That said, please be assured that we will recognize your extraordinary contributions in December and we pledge to retain our position as a market leader in compensation, taking into account any special bonuses paid by our peer firms.

Paul Weiss is a firm that came in at #20 in the most recent Am Law 100 rankings, with $1,387,694,000 in gross revenue in 2019. On top of that, Paul Weiss came in third place in terms of profits per equity partner, with an eye-popping $4,699,000. Associates certainly kept these facts in mind because as could have been expected, they are less than thrilled with the firm skipping out on fall bonuses.

Here are just a few of their reactions:

  • “Paul, Weiss won’t pay special bonuses. And invokes the names of a deceased partner and associate, and clients’ views for not paying them. But also spent the past six months talking about this is a banner year with billables up 10%.”
  • “Using the death of two members of the firm to soften the blow is an all time low.”
  • “Ew. He invokes the names of two deceased members of the firm as some sort of creepy guilt trip. Also, apparently billables have been up over 10% this year and he’s been bragging about that in the media. Seems like a move motivated by greed more than anything else.”
  • “And what do clients think of your $5,000,000 in PPP?”
  • “No fall bonus for Paul Weiss associates. Pretty interesting to see the chairman claim to be a market leader in comp while . . . not being a market leader in comp. I’m glad they’re considerate of the clients’ feelings as well, curious to see how the partners adjust their take home pay in order to be appropriate in this tough time.”
  • “The partners can go to hell. So can our useless associates committee.”
  • “Brad ‘s email also says that he is trying to do what is ‘right’ and ‘courageous’ by not giving fall bonuses. Associates are absolutely livid. Other partners had told associates that fall bonuses were coming for weeks so this news particularly stings.”

UPDATE (12:45 p.m.): Some associates at the firm were shocked by their colleagues’ anger. Here’s what they had to say:

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  • “Paul Weiss sent overnight email. Hit all the right tones and was perfectly balanced. They’ll distribute COVID bonus at the time of year end, not now. But not sure you could be upset with this email.”
  • “I’m not sure why fellow associates are so ‘angry,’ Brad clearly stated in his email: ‘we pledge to retain our position as a market leader in compensation, taking into account any special bonuses paid by our peer firms.’ That reads to me that the firm will ‘make us whole’ (i.e., bonus amounts will be the fall bonus + the market year end bonus) at year end. For a firm that hasn’t taken a step wrong during COVID, the racial justice crisis sweeping the nation or our political uncertainty, this seems like an over-reaction by some of my colleagues (or at least the ones you quoted). Do people not recall the beginning of the pandemic where we were fretting about layoffs or salary cuts and Brad pledged the firm would act in a manner that they could look back on and be proud? And how he clearly stated, multiple times, that the partners were committed to no layoffs, salary cuts or anything that would cause economic hardship? Because I remember all those things.”

At least the firm will be taking the fall bonuses into account when it’s time for year-end bonuses. Plus, it looks like staff will be receiving special year-end bonuses as well for all of their hard work during the pandemic.

So, what do you think? Is this yet another sign to other firms not to match? We think it could be. Feel free to sound off by email, by text message (646-820-8477), or by tweet (@ATLblog). A fun or insightful response — we’ll keep you anonymous — could find its way into an update to this story.

(Flip to the next page to read the Paul Weiss memo in full.)

Please help us help you when it comes to bonus news at other firms. As soon as your firm’s bonus memo comes out, please email it to us (subject line: “[Firm Name] Bonus”) or text us (646-820-8477). Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file.

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Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

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