January 31, 2011 4:38 PM
Cravath, Following the Market this Time, Issues Special Spring Bonus
Posted by Julie Triedman
In late November, Cravath, Swaine & Moore was the first of the Wall Street firms to announce year-end bonuses, setting the financial benchmark that much of the rest of the market followed. On Monday afternoon, the firm became the fourth Am Law 100 firm to announce a special spring bonus for all of its associates.
The bonus will be paid out on April 29, according to a memo sent to associates Monday afternoon and obtained by The Am Law Daily.
Special bonuses for associates at Sullivan & Cromwell, Simpson Thacher & Bartlett, and Cleary Gottlieb Steen & Hamilton have been announced over the past ten days, also ranging from $2,500 to $20,000. But Cravath's special bonuses to midlevel associates are significantly higher than the amounts being paid out by the other firms. Cravath's payments to fourth-years are $15,000--$5,000 higher than the extra payments to fifth-years at the other three firms announcing spring bonuses.
Fifth-, sixth-, and seventh-year associates at Cravath will receive payments of $20,000--compared to the $12,500, $15,000, and $17,500, respectively, that S&C, Simpson, and Cleary are giving. Virtually all Cravath associates will receive the full bonus; payments to part-time lawyers will be pro rated.
The bonuses announced Monday afternoon are in addition to the year-end bonuses announced by Cravath in November. Those bonuses, which ranged from $7,500 for the class of 2009 to $35,000 for the class of 2003, were paid on December 10, as we reported at that time.
Cravath did not immediately respond to a request for comment. But a source at the firm tells us that Cravath felt it should at least match the market on these additional payments. As to why the scale is higher than the previous special bonus scale set by Sullivan, this source says, "in light of how quickly midlevel associates start running their own deals and cases at Cravath, the firm felt that the fourth-year and more senior associates deserved more."
Unlike the other firms issuing the spring bonuses, Cravath has a strict up-or-out policy after seven years, and there are very few eighth-year associates; they will receive bonuses on an individual basis.
Whether the rest will follow remains to be seen. New York firms that have not announced special bonuses include Davis Polk & Wardwell; Paul, Weiss, Rifkind, Wharton & Garrison; Shearman & Sterling; and Skadden, Arps, Slate, Meagher & Flom, among the most prominent.Make a comment