A look at Changes to the Big Law salary scale: How are Cravath bonuses set each year?


And which Biglaw firms pay the most?


A look at Changes to the Big Law salary scale: How are Cravath bonuses set each year? 1

The salary of legal professionals at top-paying firms has gone up considerably over the years, as reported in our Biglaw Salary Scale article. The average salary of a lawyer in the US stood at $126,930 in 2020. However, several big law firms are now offering their first-year employees almost double the average national salary.

Among these firms, Cravath, Swaine & Moore LLP is one of the first to announce its year-end bonuses every year, setting the tone for Big Law salaries and the much-revered ‘Cravath Scale.

In this article, we’ll dive into how Cravath sets its bonuses, when the announcement is made, and what the bonus scale looks like.

Setting the Cravath Scale

A look at Changes to the Big Law salary scale: How are Cravath bonuses set each year? 2

The Cravath Scale, the legendary pay scale used by the biggest law firms in the country, has long been a subject of interest and even controversy.

The Cravath biglaw salary scale sets out a standard pay scale for lawyers based on their years of experience, and has been the benchmark for salaries in the legal industry for decades.

For many years, the Cravath Scale has been the subject of debate, with some arguing that it unfairly rewards senior lawyers at the expense of younger associates.

However, despite these criticisms, the scale remains a cornerstone of the legal profession, and its influence can be felt across the industry.

One of the interesting developments that has occurred among several Biglaw firms is the adoption of the Swiss ‘verelin’ structure for payments.

The Big law firms that have adopted the structure include Baker + McKenzie, Dentons, Littler Mendelson, Squire Patton Boggs, DLA Piper and Norton Rose Fulbright.

However the structure is under test with Baker + McKenzie, the first major law firm to adopt it, being accused of legal malpractice through an alleged Russian member of its network.

Which Are The Best Paying Law Firms? And What Will The BigLaw Pay Scale Be in 2023?

When looking at our Biglaw Salary Pay Scale rankings, we have checked the latest ranking information for the big paying Biglaw firms including the top firms, which also make our ‘Most Prestigious Law Firms’ list.

Many want to know what the outlook is for 2023?

Are associate bonuses and pay packages likely to increase, hold steady or decline?

It’s difficult to predict with certainty what will happen to the biglaw pay scale in 2023, as it will depend on various factors including the economy, the legal market, and the demand for legal services.

However, it is likely that law firms will continue to prioritize retaining top legal talent, and will take steps to remain competitive in the market.

The trend in recent years has seen increasing associate pay and bonuses to attract and retain top legal talent, which has been driven in part by not only the competitive nature of the legal market, but also due to a shortage of experienced associates with the necessary skills and experience to handle complex legal work in what has hitherto been a strongly transaction-driven market.

As the legal market becomes more challenging in 2023, law firms may face pressures to reduce costs and become more efficient.

This could lead some firms to reevaluate their associate pay and bonus structures, and potentially make adjustments to align with changing market conditions.

On the other hand, firms may also recognize the importance of retaining top legal talent, and continue to offer competitive pay packages in order to do so.

When we examined some of the top firms from our list of the largest biglaw payscale law firms we can see that there is remarkable consistency for the initial years’ pay.

While bonus payments for associates changes, the overall competitive nature of biglaw pay scale moves means they tend to move in concert with one another – rightly or wrongly.

Milbank was the first to increase associate salaries last year with a new scale ranging $215,000 for first-year associates, up from $205,000, to a total of $385,000 for their senior associates.

Davis Polk matched Milbank’s scale for its junior talent, but increased the salaries for its midlevel and senior talent over Milbank’s scale by 3 per cent.

A year ago the most senior associates at Cravaths saw their pay rise to $415,000, almost $20,000 over the amount paid by Davis Polk & Wardwell but following the scales used by firms like Milbank and Davis Polk for the associates in the first, second and third years.

Which Firms Pay the Most for First Year Associates?

Legal associate salaries can vary widely based on several factors such as location, area of practice, and level of experience. However, some regions and law firms are known for offering higher salaries than others.

In terms of regions, the highest-paying legal jobs are generally found in large cities like New York, San Francisco, Los Angeles, and Chicago. However, the cost of living in these cities can also be high, which can offset the higher salaries to some extent.

As for the top-paying law firms for first-year associates, the following firms are typically considered among the most lucrative:

  1. Cravath, Swaine & Moore LLP – The founders of the ‘Cravath scale’ and constant trend-setters in the associate pay stakes, according to recent reports, Cravath pays its first-year associates a base salary of $200,000 per year.
  2. Wachtell, Lipton, Rosen & Katz -Wachtell Lipton is known for its focus on mergers and acquisitions and its high associate salaries. First-year associates at Wachtell can reportedly earn a base salary of $200,000 or more.
  3. Sullivan & Cromwell LLP – The firm is known for paying high salaries to its associates, with first-year associates reportedly earning a base salary of $200,000 or more.

It’s worth noting that law firms may also offer additional bonuses and perks, such as performance-based bonuses, signing bonuses, and paid time off, which can also contribute to a higher total compensation package.

However, it’s important to remember that compensation packages can vary based on a number of factors, including the size and type of law firm, practice area, and level of experience.

Here is a random selection of some of the Biglaw pay scale firms and what they are offering on latest reports – note how they resemble one another!

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Baker & McKenzie

Year 1: $215,000Year 2: $225,000

Baker McKenzie is one of the world’s leading legal brands. As we reported last year the firm earned $3.1 billion in revenues during its 2021 fiscal year, and revenue rose nearly 8 per cent while profits were up more than 36 per cent.

The firm is well-regarded for its commitment to supporting the professional development of its young lawyers, providing competitive compensation and benefits, and promoting diversity and inclusion in the workplace.

The firm has accepted the Swiss verein structure—where affiliates are completely separate from one another on key issues like profits, pay and taxes—could be undermined when it comes to the critical matter of legal liability.

Gibson Dunn

Year 1: $215,000Year 2: $225,000

Over the years, Gibson Dunn has grown and gained a reputation as “The Rescue Squad” for its commitment to providing service to clients in need of legal assistance. In the 1970s, the firm established offices in London and Paris, and since 2000, it has expanded further into Europe, South America, the Middle East, and Asia.

With 20 offices worldwide and a team of over 1,600 lawyers, Gibson Dunn was named the “Law Firm Of The Year” by Law360 in 2021. The firm has revenue of  $2,160,542,000 and employs over 1400 lawyers.

Kirkland & Ellis

Year 1: $215,000Year 2: $225,000

With its consistent top revenue numbers in the world of Biglaw, Kirkland & Ellis was a near guarantee to match the top compensation figures recently released by Cravath, especially considering the current intense lateral market.

Clifford Chance

Year 1: $215,000Year 2: $225,000

Furthermore, Clifford Chance places great emphasis on mentorship and professional growth. The firm provides practice-specific and general training programs through the Clifford Chance Academy, which includes onsite training opportunities.

The firm also fosters a “non-stop learning environment” that enhances global business skills, such as presentation, business development, client communication, and management skills. Partners assist mid and senior-level associates in creating individual development plans, and offsite development centers offer further training opportunities.

DLA Piper

DLA Piper is one of the largest in the world, with over 90 offices across more than 40 countries, providing a diverse work environment for its lawyers.

With its expansive reach, DLA Piper offers opportunities for lawyers to work on a wide range of cases, from local to cross-border matters and like any major firm has a full service menu of offerings it provides.

The firm also prides itself on its commitment to diversity and inclusion, providing a supportive culture that values collaboration and teamwork according to recruitment and law job websites.

The firm’s size can also present challenges, with lawyers navigating complex hierarchies and managing high workloads.

White & Case

Year 1: $215,000Year 2: $225,000

Closely following the Cravath scale, White & Case, which was founded in New York in 1901, has expanded into a worldwide law firm with 45 offices across 31 countries, including eight offices within the United States.

As a trailblazer of the international law firm model, White & Case remains a dominant force in the industry, boasting a 2021 revenue of $2.87 million.

The firm’s area of expertise lies in multijurisdictional and cross-border cases and transactions. In 2021 alone, White & Case provided legal counsel to clients hailing from 115 countries and conducted business in 196 countries.

The firm’s commitment to diversity and inclusivity has been consistently lauded, with employees representing 114 nationalities and 91 languages.

Skadden Arps Slage Meagher & Flom

Year 1: $215,000Year 2: $225,000

Skadden is a renowned and sizeable law firm that nevertheless provides a supportive environment for its trainees. Trainees have the chance to share an office with associates, which contributes to a sense of support and camaraderie.

Past trainees have lauded Skadden’s culture, describing it as “supportive.” Moreover, the firm boasts a roster of outstanding talent across its offices in the US, UK and elsewhere.

From day one, Skadden those joining the firm are given the opportunity to engage in meaningful work, albeit always at a manageable level. The firm’s focus spans a range of practice areas, including mergers and acquisitions and white collar crime, and current lawyers appreciate the diverse nature of the work. While the work can be challenging, trainees find that they develop their skills significantly by the end of their contract, emerging from setbacks stronger than before.

In addition to its commercial and corporate law endeavors, Skadden demonstrates a strong commitment to pro bono work, having completed over 2 million hours of pro bono work within the past decade.

Latham & Watkins

Year 1: $205,000Year 2: $215,000

Latham & Watkins secured a stunning $5,488,778,000 in gross revenue in 2021, ranking them at No. 2 in the most recent Am Law 100 listing. The firm is celebrated for its traditional announcement of year-end bonuses each January.

At Latham, bonuses are granted based on a billable requirement of 1900 hours. However, the firm also generously compensates those exceeding this benchmark. As it turns out, Latham associates have been industrious this year, albeit slightly less busy than last year.

Although base bonuses are at market value, the median bonuses for each class year, often by the narrowest of margins, surpass market standards. Furthermore, the top bonuses are a significant cut above what the market offers.

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