The Firms

December 9, 2010 5:22 PM

Associate Bonus Focus Turns from Cravath to Cahill

Posted by Brian Baxter

Cravath, Swaine & Moore set the 2010 associate bonus scale two weeks ago. Skadden, Arps, Slate, Meagher & Flom matched a day later and Milbank, Tweed, Hadley & McCloy stuck with the scale shortly before Thanksgiving.

Now Cahill Gordon & Reindel appears set to surpass that scale by breaking ranks with other New York firms, two sources familiar with the situation told sibling publication the New York Law Journal.

The NYLJ reports that Cahill partners told the firm's 184 associates on Wednesday that they can expect an initial bonus ranging from $10,000 to $25,000 and that in January the firm will pay an additional year-end bonus that will likely match the rates set by Cravath and other firms. (Above the Law had news of the new Cahill bonus scale late Wednesday.)

The latest bonus round is in addition to the midyear bonuses ranging from $2,500 for first-years to $10,000 for senior associates that Cahill Gordon distributed this past summer. The NYLJ notes that the multiple payouts put Cahill Gordon above market, an unlikely position for a firm that dropped out of the Am Law 100 a year ago.

But Cahill Gordon's relatively small size for a major firm--it has 270 lawyers in London, New York, and Washington, D.C.--allowed it to weather the financial downturn as other larger competitors sought to prop up struggling outposts in once soaring markets like Charlotte and Dubai.

According to the latest Am Law 100 financial data, Cahill Gordon saw gross revenue rise 9 percent in 2009 to $269.5 million, while profits per partner jumped nearly 20 percent to $2.5 million.

The NYLJ reports that Cahill Gordon's good fortunes have continued in 2010, with the market for high-yield bonds, a firm staple, remaining extremely solid. (A Cahill Gordon partner told The Am Law Daily last year that a bond offering for General Motors to restructure $27 billion in debt was the "most complicated thing" he had ever worked on.)

In October, Cahill Gordon advised JPMorgan Chase's global alternative asset unit Highbridge Capital Management on the acquisition of a 55 percent stake in Brazilian hedge fund Gávea Investimentos. The firm also recently began advising CB Holding, owner of the Charlie Brown's Steakhouse chain, in its Chapter 11 case.

A firm spokeswoman declined the NYLJ's request for comment on the bonus bonanza.

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