Bonus season gets underway as quartet of New York firms fall in line with pacesetter Cravath
Cleary, Boies Schiller, Fried Frank and Cadwalader match Cravath with 15% bonus increase to $115,000 at top end of scale
A quartet of New York firms have unveiled their year-end bonuses for associates, matching the $15,000 to $115,000 benchmark set by pacesetter Cravath Swaine & Moore.
Ahead of the Thanksgiving weekend, Cleary Gottlieb Steen & Hamilton, Boies Schiller Flexner, Fried Frank and Cadwalader had all matched Cravath’s scale – which represents a 15% increase for the most experienced associates – with a host of other firms expected to fall in line in the coming days.
US news site Above the Law, which broke the news of Cravath's bonuses, described the scale as 'pretty generous' given an associate salary war in the summer that followed a round of special bonuses in the spring. There is, however, still the prospect that another leading firm will improve on Cravath's rates, given what happened over the summer when several firms improved on their pay scales in the light of more generous announcements from rivals.
In a reflection of the intense competition to retain the best talent, Boies Schiller will also be doling out ‘extraordinary’ and ‘extra-extraordinary’ bonuses for associates that racked up more than 2,350 and 2,600 hours respectively, according to an internal memo from the firm’s managing partners obtained by Above The Law.
Associates billing anywhere between 2,250 and 2,599 hours will be eligible to receive up to $140,000, while those who billed more than 2,600 hours could take home up to $150,000, according to the memo.
Cadwalader and Fried Frank are also awarding extra cash for high billers.
This year’s bonus schemes should come as no surprise given the war for talent currently being waged between US law firms in a hypercompetitive lateral recruiting market as they continue to come up with ways to sweeten the deal for their more junior lawyers in the face of surging work volumes.
A survey published by Thomson Reuters and Georgetown Law’s Center on Ethics and the Legal Profession last week found that US law firm leaders are now viewing acquiring and retaining talent as a high risk to future profitability compared to last year when the main risk factor was primarily related to the general volatility of the global economy amid the earlier stages of the pandemic.
Some 31% of respondents said they were concerned about staff being poached by competitors, making it the second-highest area of concern for the year ahead, while associate salary increases came in a close third at 29%, the survey revealed.