A Cautious Cravath Swaine Keeps Bonus Levels . . Level

bonusWhite-shoe Big Law firm Cravath Swaine are to pay associate lawyers the same amount as last year.  What can this mean?  A note of caution?  A degree of saving for tougher times?

The Wall Street Journal reports that the youngest attorneys on the pay-scale  will receive $10,000 and those with the most experience will get $60,000.

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Those awards supplement base salaries that range from $160,000 to around $265,000.

Cravath’s decisions on bonuses matter, because they typically set a benchmark for how other major law firms reward their junior lawyers. The end-of-year bonuses are one litmus test indicating how well—or poorly—the year has gone at big law firms.

Last year, Cravath boosted associate bonuses significantly, reflecting some renewal of confidence in the economy after the tough years following the financial downturn.

Cravath is among the most profitable U.S. law firms. Last year the firm’s average profits per partner were $3.43 million, up more than 10% compared with 2011, according to rankings compiled by The American Lawyer magazine.

The caution indicated by this year’s bonuses at Cravath reflects larger industry trends outlined a few months back by Citi Private Bank, a major law firm lender. For the first half of 2013, revenue growth among 172 law firms that Citi sampled was, on average, only moderate.

While things may pick up some if the economy kicks into higher gear, the market for legal services has undergone a fundamental shift, Gretta Rusanow, senior client adviser at Citi Private Bank’s law firm group, told the Journal earlier this year.

“We think managing partners for the most part understand that we’re working in a very different environment,” Ms. Rusanow said.

A $10,000 bonus for an attorney fresh out of law school is still an improvement compared with 2011, when Cravath doled out $7,500 to new lawyers and $37,500 to its most seasoned associates.

But it is no return to the gold rush days of 2007. The recession upended the legal profession, crimping the flow of high-dollar deals and spurring layoffs and cost-cutting measures at many big law firms.


The Aussie Lawyer on a Mission – Mission Accomplished

Peter gordon lawyer

peter-gordon-lawyerPeter Gordon is an Australian lawyer on a mission.  And now it’s mission accomplished.  The former Slater & Gordon lawyer put off his retirement in order to resolve a major class action claim against Thalidomide-maker Grunenthal and its distributor, Diageo.

It is 50 years since Sydney doctor William McBride alerted medical authorities to the appalling side-effects of the drug marketed by the German company, Grunenthal, whose name was to become synonymous with the drug whose name strikes as sinister.

The class action against Grunenthal has been discontinued, along with the agreement to end another class action against the drug’s distributor, Diageo, which inherited the action from a company takeover, but has accepted a corporate and moral responsibility. Grunenthal never did, to its great discredit.
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The settlement in the Victorian Supreme Court for the more than 100 surviving Australian and New Zealand thalidomiders, as they are known, was for $89 million with another $6.5 million in costs.

The claim first arose half a century ago when Sydney doctor William McBride sounded the warning about the drug’s appalling side effects.  Now, the class action against Grunenthal has been discontinued, along with the agreement to end another class action against  Diageo, which inherited the action from a company takeover.

Grunthenthal, which already has a blackened history with its shadowy Nazi Party links, has never accepted any corporate responsibility for the shocking drug, nor any moral responsibility.

Melbourne lawyer Peter Gordon launched his landmark class-action suit on after he met Lynne Rowe and her parents. This is a long-overdue outcome for innocents whose lives have been blighted by the failures of the Grunenthal company with its former shadowy links to the Nazis.

Mr Gordon describes thalidomide as the “worst pharmaceutical disaster in the history of the world’’ and that its “real dimension’’ has been “vastly underestimated, underreported and underrated”.

This and his compassion for its victims and their families motivated him to take on a company that was arrogant in its treatment of those who are still suffering from its failure in a basic duty of care to investigate the appalling side-effects of the drug it manufactured and saw distributed by other companies under other names.

“Most of the records about what Grunenthal had done had, following a (failed) criminal trial in Germany, been stored away in the Dusseldorf archive.

“They had never been translated.”

But the documents were copied into English for the first time and more and more Australian and New Zealand victims were traced.

More than 100 were eventually involved in the class action, which has reached a settlement with the drug’s distributor Diageo.

Mr Gordon said he would now take a break but would like to use the translated documents to help other English-speaking litigants.

“I think we would like to be a resource for other firms around the world.”

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