News on law firm bonus announcements abounds. With Cravath kicking off bonus season on Monday, December 2nd, other firms are quickly jumping on the bandwagon. Each year Cravath is the first firm to announce the amount of annual payouts, and most of its BigLaw peers follow suit. The magic dollar range this year is $10,000 (for the class of 2012, and pro-rated for the class of 2013) to $60,000 (class of 2005).
Word of Cravath’s announcement may have been exciting, relevant and/or frustrating/disappointing if you are a BigLaw attorney who is eligible for a bonus; maybe less interesting for the rest of us who actually see something other than our office computer screen during our waking hours. If you are a law student, you are likely salivating right now. One thing is certain--Boies Schiller attorneys have little to complain about. The firm is repeating its rebellious move from last year, paying associates an average of $85,000. Some associates will take home as much as $300,000 (last year the max was $250,000). Attorneys who have been with the firm for at least one year will take home a minimum of $25,000.
But let’s get back to the not-so-sad reality that most associates are facing this year. Cravath’s bonuses are identical to the amounts paid out at the end of 2012. This is not necessarily good news--if a firm was more profitable in 2013 than in 2012, shouldn’t bonuses go up? Simpson Thacher associates have reported to Above the Law that they are disappointed with Cravath-level bonuses given internal buzz that the firm has been raking in record profits this year. Paul Weiss is also matching Cravath in spite of profit increases, sparking associate grumbles. The flip side is that firms with flat profits will still distribute the same amounts they did last year. Other firms that have announced Cravath-level bonuses include Sullivan & Cromwell, Debevoise, Linklaters, Cleary Gottlieb, Willkie Farr & Gallagher, Clifford Chance, Cadwalader, and Proskauer. Kaye Scholer, Shearman and Sterling, Skadden, Fried Frank, and Ropes & Gray are adhering to the Cravath scale for the most part, with slight alterations--in some cases, adjusting bonuses depending on number of hours.
Given Boies Schiller’s boldness in the bonus department, it is no surprise that the firm ranked #2 for Compensation in Vault’s annual associate survey. Associates were asked to rate their satisfaction with compensation on a scale of 1 to 10, and Boies Schiller’s average rating was 9.551 (Wachtell claimed the #1 spot, with a 9.778 rating this year). One Boies Schiller associate told us, “The formula compensation system rewards top billers with eye-popping bonuses, and even a modest number of hours results in an ‘above-market’ bonus.” Another commented: “Our salaries are, frankly, insane. Including bonuses, I make over 50% more than associates my year at other large national firms. I fully recognize that one of the reasons I work so hard is that I am very generously compensated.”
Here are the other law firms that triumphed in the Compensation category this year:
“You work the same hours you would work at another firm anyway, get huge responsibility early, and get paid materially more than associates at other firms.”
“It just can't be beat. The partners’ willingness to show their appreciation for associates through the compensation structure is a real plus. It makes associates feel great about the hard work they do.”
Irell & Manella (#3):
“Irell pays more than any other firm on the West Coast, period. For years, they have doubled (or near-doubled) Cravath-level bonuses.”
The most generous firm on the west coast, and one of the most generous firms in the country. No comparisons when it comes to money. The partners make a lot and share it.”
Cahill Gordon (#4)
“We get above market bonuses, and I don't think our hours are much higher than the average big firm in New York.”
“Best in the market. Hard to overstate how much this improves work satisfaction. Makes me feel sincerely appreciated.”
Williams & Connolly (#5)
“We are unique in that no bonuses are given out. Rather, salaries are above market. Generally speaking, associates prefer this model. There is no pressure to hit a particular hours target, no competition among associates, and no worrying about bonuses at year's end, which can be distracting. Instead, people can focus on their work.”
“We're spoiled rotten in terms of compensation and perks, even though we don't get any bonuses.”
As these comments illustrate, there are a variety of other factors besides bonus checks that go into satisfaction when it comes to compensation. Hours, company culture, base salary, raises, and benefits are also part of the equation. Above examples aside, in a world of lockstep compensation and Cravath-driven bonuses there isn’t much variation in how much most BigLaw attorneys get paid. Their calculation is inevitably based on whether they feel they are compensated adequately for the work they have done. In other words, is life in BigLaw worth it?
Congratulations to those receiving a well-deserved 2013 bonus. Spend it wisely!
Vault’s Top Law Firms for Compensation
How to Spend Your BigLaw Bonus (FindLaw)
Boies Schiller Again Pays Associates Generous Bonuses (NYT)