Bellwether legal shop Cravath Swain & Moore announces year-end payouts of $7,500 to $35,000, same as last year. Why flat may be the new up in the legal biz.
While some quarters of Wall Street may see big bonuses this year, law firms are looking at a more subdued size of paycheck.
The first firm to report, Cravath Swain & Moore, announced year-end bonuses Monday that matched last year’s levels. Payments will range from $7,500 for first-year associates to $35,000 for senior associates, according to a memo sent to employees. The most senior associates received a $5,000 bump over last year.
As the financial crisis starved most legal shops of Wall Street deals, law firm bonuses shriveled. Monday’s announcement was greeted with a sigh of relief from managing partners across the city, according to the New York Law Journal.
Cravath is typically one of the first to announce its year-end bonuses, and has come to be considered a bellwether among the city’s big law firms. By holding the line at last year’s numbers, Cravath sent a signal that perhaps the legal market has stabilized, or at least stopped its downward spiral.
“They’re saying, ‘We weathered the storm and we feel comfortable here,’ ” said Sheri Michaels, a partner with legal consulting firm Major Lindsey & Africa. “Nobody has a crystal ball, but I do expect other firms similarly situated to match the Cravath bonus announcements.”
Skadden Arps Slate Meagher & Flom and Simpson Thacher & Bartlett usually announce their bonus schedule at around the same time, and often match Cravath’s numbers. Neither firm has indicated what this year’s bonus schedule will look like. All three firms declined comment Tuesday.
While any bonus would no doubt be welcome in this economy—after all, more than 10,000 legal jobs vanished from New York City last year—this year’s numbers are a far cry from pre-financial crisis levels.
In 2007, Cravath’s bonuses started at $35,000 for first-year associates, and ranged up to $60,000 for seven- and eight-year associates. In those days, senior associates were also eligible for an additional $50,000 “special bonus” for extra hard work.