Bonus Bonanza: More BigLaw Firms Up Ante; Will Salaries Rise, Too?
In a New York-centered bonus bonanza that observers say could signal an intent to raise salaries for the Big Apple’s best-paid associates as soon as January 2008, at least six more major law firms have jumped yesterday and today on the associate bonus bandwagon driven by Cravath, Swaine & Moore’s move late last month.
Those now planning to pay regular and special bonuses that for some associates will total in excess of $100,000 include Davis Polk & Wardwell; Milbank, Tweed, Hadley & McCloy; Cleary Gottlieb Steen & Hamilton; Cahill Gordon & Reindel; Willkie Farr & Gallagher; and Dewey & LeBoeuf, reports Above the Law. The law blog also posts copies of the memos circulated today by these firms.
Although some observers have speculated that the firms upped the ante now to ease the pressure to do so concerning associate salaries in January, when attorney pay often goes up, the better view seems to be that the big bonuses signal an intention to raise associate salaries in January, too, according to the New York Sun.
The top starting salary for BigLaw associates right now–in New York City, despite the higher cost of living there, and in other major metropolitan areas–is reportedly $160,000 or so. But such salary equality “can’t last long,” predicts John Coffee of Columbia Law School. “It’s natural that New York will distance itself from the national salary scale,” he tells the newspaper. “There will be some jockeying among the firms to see who can lead the race.”
As discussed in earlier ABAJournal.com posts, Sullivan & Cromwell had announced special bonuses for senior associates back in September. However, Cravath really advanced the ball, as far as associates are concerned, by announcing late last month that it would pay major-league across-the-board regular and special bonuses to associates at all class levels. The Cravath move was then quickly followed by announcements from Debevoise & Plimpton; Simpson Thacher & Bartlett; and Paul, Weiss, Rifkind, Wharton & Garrison.
