Cravath SHATTERS THE MARKET!

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Anonymous User
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Cravath SHATTERS THE MARKET!

Postby Anonymous User » Mon Nov 28, 2011 5:42 pm

And by shatters I mean destroys any fragile shred of hope you may have had that this bonus season will reflect increased profits. ROFLCOPTER.

Class of 2010 — $7,500 Class of 2009 — $10,000 Class of 2008 — $15,000 Class of 2007 — $20,000 Class of 2006 — $25,000 Class of 2005 — $30,000 Class of 2004 — $37,500

http://blogs.wsj.com/law/2011/11/28/cra ... er-again/; --LinkRemoved--
Last edited by Anonymous User on Mon Nov 28, 2011 5:50 pm, edited 2 times in total.

c3pO4
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Re: Cravath SHATTERS THE MARKET!

Postby c3pO4 » Mon Nov 28, 2011 5:45 pm

I think other firms will one-up them and they will either pay a supplemental bonus or lose a ton of associates to the lateral market. The economy is down but biglaw profits have been doing well and partners are making more money, while associates work more hours than ever. The market won't support lowball bonuses like these.

005618502
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Re: Cravath SHATTERS THE MARKET!

Postby 005618502 » Mon Nov 28, 2011 5:56 pm

Anonymous User wrote:And by shatters I mean destroys any fragile shred of hope you may have had that this bonus season will reflect increased profits. ROFLCOPTER.

Class of 2010 — $7,500 Class of 2009 — $10,000 Class of 2008 — $15,000 Class of 2007 — $20,000 Class of 2006 — $25,000 Class of 2005 — $30,000 Class of 2004 — $37,500

http://blogs.wsj.com/law/2011/11/28/cra ... er-again/; --LinkRemoved--


How is it that a store director at a grocery store receives a larger bonus (20-40K)Than 3-7 year associates? Why are associate bonuses so low in biglaw?

Anonymous User
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Re: Cravath SHATTERS THE MARKET!

Postby Anonymous User » Mon Nov 28, 2011 6:00 pm

AssumptionRequired wrote:
Anonymous User wrote:And by shatters I mean destroys any fragile shred of hope you may have had that this bonus season will reflect increased profits. ROFLCOPTER.

Class of 2010 — $7,500 Class of 2009 — $10,000 Class of 2008 — $15,000 Class of 2007 — $20,000 Class of 2006 — $25,000 Class of 2005 — $30,000 Class of 2004 — $37,500

http://blogs.wsj.com/law/2011/11/28/cra ... er-again/; --LinkRemoved--


How is it that a store director at a grocery store receives a larger bonus (20-40K)Than 3-7 year associates? Why are associate bonuses so low in biglaw?


I mean, its still a pretty nice chunk of change but you have to believe that there's some associate poaching/recruiting trouble in CSMs future. I already knew plenty of people at our OCI who turned them down for "lower" ranked firms and that's just going to get worse next year.

xcountryjunkie
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Re: Cravath SHATTERS THE MARKET!

Postby xcountryjunkie » Mon Nov 28, 2011 6:02 pm

This is pathetic. Most major firms, Cravath included, have PPP's at 2007 levels (or higher) and yet are shelling out like they're broke.
Last edited by xcountryjunkie on Mon Nov 28, 2011 6:16 pm, edited 1 time in total.

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Re: Cravath SHATTERS THE MARKET!

Postby MrKappus » Mon Nov 28, 2011 6:04 pm

xcountryjunkie wrote:This is pathetic. Most major firms, Cravath included, have PPP's at 2007 levels (or higher) and yet are shelling out like their broke.


Their broke is the worst!!

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Re: Cravath SHATTERS THE MARKET!

Postby Anonymous User » Mon Nov 28, 2011 6:15 pm

MrKappus wrote:
xcountryjunkie wrote:This is pathetic. Most major firms, Cravath included, have PPP's at 2007 levels (or higher) and yet are shelling out like their broke.


Their broke is the worst!!


Wow -- you win. Apparently my English sucks. Maybe my anger got the best of my grammar?

edit: didn't mean to go anonymous there. Can't do anything right apparently. I'm the quoted poster.

c3pO4
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Re: Cravath SHATTERS THE MARKET!

Postby c3pO4 » Mon Nov 28, 2011 6:17 pm

Just tag this thread during OCI when people ask what firms to pick. There's already a movement against these upper Vault firms who provide no tangible benefits over lower ranked firms. How much you willing to sacrifice for exit options?

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Re: Cravath SHATTERS THE MARKET!

Postby LawIdiot86 » Mon Nov 28, 2011 6:19 pm

I agree the bonuses are low relative to the PPP growth and effort expended by associates, but, these associates are lawyers and they should know from law school that unless there is a contract saying they get a bonus of a certain size, it is entirely at the benevolence of the partners. Now, they could show their dissatisfaction with their feet and go elsewhere, but in ITE they can't count on finding work that pays as well and they know there are hundreds of almost as smart people lined up to fill every one of their spots. Can anyone blame the firms for exploiting the imbalance in supply and demand? Why pay more then you need to?

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Re: Cravath SHATTERS THE MARKET!

Postby Anonymous User » Mon Nov 28, 2011 6:20 pm

c3pO4 wrote:Just tag this thread during OCI when people ask what firms to pick. There's already a movement against these upper Vault firms who provide no tangible benefits over lower ranked firms. How much you willing to sacrifice for exit options?


If you picked 500-700 billable hours, you win an all expense paid trip to the Death Star!
Last edited by Anonymous User on Mon Nov 28, 2011 6:24 pm, edited 1 time in total.

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NinerFan
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Re: Cravath SHATTERS THE MARKET!

Postby NinerFan » Mon Nov 28, 2011 6:20 pm

In some sense, this is a smart move. Like Elie says in the ATL post, it's like check-raising in poker. Cravath will wait and see what other firms do and supplement if necessary in the spring.

The days of Cravath being the market-setter is over, I guess.

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Re: Cravath SHATTERS THE MARKET!

Postby MrKappus » Mon Nov 28, 2011 6:28 pm

Anonymous User wrote:
MrKappus wrote:
xcountryjunkie wrote:This is pathetic. Most major firms, Cravath included, have PPP's at 2007 levels (or higher) and yet are shelling out like their broke.


Their broke is the worst!!


Wow -- you win. Apparently my English sucks. Maybe my anger got the best of my grammar?

edit: didn't mean to go anonymous there. Can't do anything right apparently. I'm the quoted poster.


Sorry, kinda douchey of me. Reminded me of the "Alot" joke. And I'm bored.

As to OP: should we expect anything else?? One would be out of her mind to quit her biglaw job in this economy, and some bonus >>> nothing.

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Re: Cravath SHATTERS THE MARKET!

Postby Anonymous User » Mon Nov 28, 2011 6:30 pm

MrKappus wrote:
Anonymous User wrote:
MrKappus wrote:
xcountryjunkie wrote:This is pathetic. Most major firms, Cravath included, have PPP's at 2007 levels (or higher) and yet are shelling out like their broke.


Their broke is the worst!!


Wow -- you win. Apparently my English sucks. Maybe my anger got the best of my grammar?

edit: didn't mean to go anonymous there. Can't do anything right apparently. I'm the quoted poster.


Sorry, kinda douchey of me. Reminded me of the "Alot" joke. And I'm bored.

As to OP: should we expect anything else?? One would be out of her mind to quit her biglaw job in this economy, and some bonus >>> nothing.


Well, junior associate retention is not the point, a 4th year at CSM probably has some options.

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NinerFan
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Re: Cravath SHATTERS THE MARKET!

Postby NinerFan » Mon Nov 28, 2011 6:36 pm

Anonymous User wrote:Well, junior associate retention is not the point, a 4th year at CSM probably has some options.


Yeah, and since the "cravath way" is to not hire any laterals, they can't have too many of their associates jump ship otherwise they'll have a dearth of mid/seniors

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MrKappus
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Re: Cravath SHATTERS THE MARKET!

Postby MrKappus » Mon Nov 28, 2011 6:38 pm

^ Not sure I'd willingly risk my livelihood on a "probably." Honestly, I never understand the annual bonus brouhahas. It's a bonus, by its very nature an optional payment. Getting P.O.-ed about them just strikes me as kind of entitled. I know I'm in the minority on this issue, though.

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Re: Cravath SHATTERS THE MARKET!

Postby c3pO4 » Mon Nov 28, 2011 6:40 pm

LawIdiot86 wrote:I agree the bonuses are low relative to the PPP growth and effort expended by associates, but, these associates are lawyers and they should know from law school that unless there is a contract saying they get a bonus of a certain size, it is entirely at the benevolence of the partners. Now, they could show their dissatisfaction with their feet and go elsewhere, but in ITE they can't count on finding work that pays as well and they know there are hundreds of almost as smart people lined up to fill every one of their spots. Can anyone blame the firms for exploiting the imbalance in supply and demand? Why pay more then you need to?


This is a really common misconception. There actually aren't more qualified biglaw associates than there were prior to ITE. Biglaw is not in a recession anymore, and it's easy for an associate with a couple years of biglaw experience to lateral.

Overall, the legal market is very depressed. However, corporate profits have skyrocketed, and corporations pay law bills. Also, firms like Cravath aren't interested in dipping down into the bottom 35,000 law school grads. They have to compete for the top students at Harvard, Stanford, NYU, etc. and looking bad on bonuses will affect their recruitment.

005618502
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Re: Cravath SHATTERS THE MARKET!

Postby 005618502 » Mon Nov 28, 2011 6:50 pm

In general law salaries seem very low (except Wachtell). 10,000 isnt shit, in your third year you should be getting a 35,000+ bonus for it to be wowing. I guess they dont have to do this since their salaries are very high when you consider years of work exp needed for the acquired salary.

I just guess i expected it to be a lot better

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Re: Cravath SHATTERS THE MARKET!

Postby NinerFan » Mon Nov 28, 2011 6:50 pm

MrKappus wrote:^ Not sure I'd willingly risk my livelihood on a "probably." Honestly, I never understand the annual bonus brouhahas. It's a bonus, by its very nature an optional payment. Getting P.O.-ed about them just strikes me as kind of entitled. I know I'm in the minority on this issue, though.


These associates are not going to jump ship right off the bat. They'll contact recruiters and line up their exit options before actually leaving.

You might think of them as whiny and entitled, but they have a few good points. They bill 2000-3000 hours a year (and thus likely work (much?) more than that), sacrifice vacations, personal lives, and etc to be at the beck and call of their partners 24/7, even on holidays.

For that, they get their market pay, sure, but compared to Finance people who get 6 figure bonuses (and also work hard/are stressed), the reward is much smaller. At the same time they get this "small" bonus amount, Cravath partners have PPP of over 3 million dollars.

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Re: Cravath SHATTERS THE MARKET!

Postby LawIdiot86 » Mon Nov 28, 2011 6:52 pm

c3pO4 wrote:
LawIdiot86 wrote:I agree the bonuses are low relative to the PPP growth and effort expended by associates, but, these associates are lawyers and they should know from law school that unless there is a contract saying they get a bonus of a certain size, it is entirely at the benevolence of the partners. Now, they could show their dissatisfaction with their feet and go elsewhere, but in ITE they can't count on finding work that pays as well and they know there are hundreds of almost as smart people lined up to fill every one of their spots. Can anyone blame the firms for exploiting the imbalance in supply and demand? Why pay more then you need to?


This is a really common misconception. There actually aren't more qualified biglaw associates than there were prior to ITE. Biglaw is not in a recession anymore, and it's easy for an associate with a couple years of biglaw experience to lateral.

Overall, the legal market is very depressed. However, corporate profits have skyrocketed, and corporations pay law bills. Also, firms like Cravath aren't interested in dipping down into the bottom 35,000 law school grads. They have to compete for the top students at Harvard, Stanford, NYU, etc. and looking bad on bonuses will affect their recruitment.

There aren't more qualified biglaw associates ITE, just more to go around. Look at http://static.chambers-associate.com/Resource/CA_class_size_table.pdf If Skadden's class is 1/3 2008 levels and STB is 70% of what it used to be, that is a lot of qualified people who would have had V10 jobs who might have to settle for a less attractive firm or trade down. I would agree that a Cravath 4th year is still good for lateraling (I know a couple), but that assumes they want the pay cut to go in-house or the prestige drop of another firm.

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Re: Cravath SHATTERS THE MARKET!

Postby Veyron » Mon Nov 28, 2011 6:53 pm

NinerFan wrote:
MrKappus wrote:^ Not sure I'd willingly risk my livelihood on a "probably." Honestly, I never understand the annual bonus brouhahas. It's a bonus, by its very nature an optional payment. Getting P.O.-ed about them just strikes me as kind of entitled. I know I'm in the minority on this issue, though.


These associates are not going to jump ship right off the bat. They'll contact recruiters and line up their exit options before actually leaving.

You might think of them as whiny and entitled, but they have a few good points. They bill 2000-3000 hours a year (and thus likely work (much?) more than that), sacrifice vacations, personal lives, and etc to be at the beck and call of their partners 24/7, even on holidays.

For that, they get their market pay, sure, but compared to Finance people who get 6 figure bonuses (and also work hard/are stressed), the reward is much smaller. At the same time they get this "small" bonus amount, Cravath partners have PPP of over 3 million dollars.


Right, a fair wage is whatever the market will bear and the market is still very interested in getting its paws on Cravath level talent.

To be honest, there just aren't that many people in the world who are (a) smart enough to get a job at Cravath and (b) dumb enough to work for Cravath.

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Re: Cravath SHATTERS THE MARKET!

Postby JusticeHarlan » Mon Nov 28, 2011 6:59 pm

NinerFan wrote:You might think of them as whiny and entitled, but they have a few good points. They bill 2000-3000 hours a year (and thus likely work (much?) more than that), sacrifice vacations, personal lives, and etc to be at the beck and call of their partners 24/7, even on holidays.

For that, they get their market pay, sure, but compared to Finance people who get 6 figure bonuses (and also work hard/are stressed), the reward is much smaller. At the same time they get this "small" bonus amount, Cravath partners have PPP of over 3 million dollars.

But they knew all of this going in, didn't they? Even those who graduated in boom times and expected better bonuses when they signed up certainly knew they weren't gonna get paid like finance people, and they knew the hours they would be required to work.

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Re: Cravath SHATTERS THE MARKET!

Postby NinerFan » Mon Nov 28, 2011 7:02 pm

JusticeHarlan wrote:
NinerFan wrote:You might think of them as whiny and entitled, but they have a few good points. They bill 2000-3000 hours a year (and thus likely work (much?) more than that), sacrifice vacations, personal lives, and etc to be at the beck and call of their partners 24/7, even on holidays.

For that, they get their market pay, sure, but compared to Finance people who get 6 figure bonuses (and also work hard/are stressed), the reward is much smaller. At the same time they get this "small" bonus amount, Cravath partners have PPP of over 3 million dollars.

But they knew all of this going in, didn't they? Even those who graduated in boom times and expected better bonuses when they signed up certainly knew they weren't gonna get paid like finance people, and they knew the hours they would be required to work.


Sure. Doesn't mean they're not going to complain. Check out this info from an ATL commentator (sources omitted, but were all from prior ATL posts).

"Here is actual data for once on this site....(1) PPP, (2) first-year bonuses, and (3) first-year bonuses as a percentage of PPP, each at Cravath over the last 6 years. Note that the 2011 PPP is a conservative estimate given that by all accounts business was up considerably at Cravath this year over last.

Cravath PPP 2006 = $3.0m; bonus >= $35,000; (0.0117%)
Cravath PPP 2007 = $3.3m; bonus >= $45,000; (0.0136%)
Cravath PPP 2008 = $2.5m; bonus >= $17,500; (0.0070%)
Cravath PPP 2009 = $2.7m; bonus >= $ 7,500; (0.0028%)
Cravath PPP 2010 = $3.2m; bonus >= $15,000; (0.0047%)
Cravath PPP 2011 = $3.2m (est); bonus >= $7,500; (0.0023%) "

In this context, the bonus is sad. You can see why associates there would be annoyed. Why wouldn't they be looking to lateral somewhere else where they might work less and still get the same bonus and have better partnership prospects and more responsibility?

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Re: Cravath SHATTERS THE MARKET!

Postby LawIdiot86 » Mon Nov 28, 2011 7:05 pm

JusticeHarlan wrote:
NinerFan wrote:You might think of them as whiny and entitled, but they have a few good points. They bill 2000-3000 hours a year (and thus likely work (much?) more than that), sacrifice vacations, personal lives, and etc to be at the beck and call of their partners 24/7, even on holidays.

For that, they get their market pay, sure, but compared to Finance people who get 6 figure bonuses (and also work hard/are stressed), the reward is much smaller. At the same time they get this "small" bonus amount, Cravath partners have PPP of over 3 million dollars.

But they knew all of this going in, didn't they? Even those who graduated in boom times and expected better bonuses when they signed up certainly knew they weren't gonna get paid like finance people, and they knew the hours they would be required to work.

Also, not to defend the finance people too strongly, but lawyers are risk averse by nature. Stick a lawyer from Cravath on a trading floor and he's gonna hold everything in cash and T-bills. Among other things, the finance people are being compensated for taking and succeeding in ultra-risky transactions. Exactly how risky is drafting a comfort letter using a template or writing a memo on a point of law for a client whose problem has been neatly defined and dropped in your lap by a partner?

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Re: Cravath SHATTERS THE MARKET!

Postby keg411 » Mon Nov 28, 2011 7:06 pm

LawIdiot86 wrote:I would agree that a Cravath 4th year is still good for lateraling (I know a couple), but that assumes they want the pay cut to go in-house or the prestige drop of another firm.


1) With the crap bonuses, is it really that much of a paycut for a 4th/5th year?
2) At some point, presTTTige isn't worth it anymore. I think at some point CSM associates are going to find either a place that will pay them more $$$ or will have lower billable hours.

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Re: Cravath SHATTERS THE MARKET!

Postby Anonymous User » Mon Nov 28, 2011 7:07 pm

I doubt anybody that doesn't already have a practice of doing so is going to top Cravath's bonus. Its tacit price-fixing at this point.




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