Fall bonuses Forum

[Pulsar]

The only guarantee you get by working at CravaTTTh is that you'll never have above-market compensation.

[MurdockLLP2]

So is the dream dead?

[Anonymous User]

If Cravath or KE comes out with, say, $140k bonus for a seventh year, I think every firm up and down the Amlaw 100 will have a much harder time not matching. I'd imagine it's much easier for firms to pretend special fall bonuses simply do not exist than for them pick a percentage of $140k to pay their senior associates while continuing to save face.

In this scenario, I cannot fathom DPW/Milbank paying an additional $140k year-end bonus -- which would truly change the game.

[Anonymous User]

for some clarity on Cleary: our internal messaging has been 'we always match our peers, we consider DPW/S&C our peers, it would come as a surprise if we dont match now. but because of our partnership structure it takes longer to approve.'

no idea of course if this is true but it's what is being conveyed to associates.

[Anonymous User]

for some clarity on Cleary: our internal messaging has been 'we always match our peers, we consider DPW/S&C our peers, it would come as a surprise if we dont match now. but because of our partnership structure it takes longer to approve.'

no idea of course if this is true but it's what is being conveyed to associates.

When and how was this internal message delivered? Cleary NY midlevel here and I am not aware of any such internal messaging.

[Anonymous User]

for some clarity on Cleary: our internal messaging has been 'we always match our peers, we consider DPW/S&C our peers, it would come as a surprise if we dont match now. but because of our partnership structure it takes longer to approve.'

no idea of course if this is true but it's what is being conveyed to associates.

When and how was this internal message delivered? Cleary NY midlevel here and I am not aware of any such internal messaging.

DC weekly calls

[Anonymous User]

for some clarity on Cleary: our internal messaging has been 'we always match our peers, we consider DPW/S&C our peers, it would come as a surprise if we dont match now. but because of our partnership structure it takes longer to approve.'

no idea of course if this is true but it's what is being conveyed to associates.

When and how was this internal message delivered? Cleary NY midlevel here and I am not aware of any such internal messaging.

DC weekly calls

Helpful, thanks. Fingers crossed we match regardless of Cravath, especially in light of Freshfield match.

[Definitely Not North]

O'MelvTTTTeney

[Pulsar]

If Cravath or KE comes out with, say, $140k bonus for a seventh year, I think every firm up and down the Amlaw 100 will have a much harder time not matching.

Spotted someone who has never thought about PRL

No way anywhere near close to "every firm" in the Am100 would match a $140k 7th year bonus. Many are not matching that now. Many are not even on the $190k base salary scale. Only firms doing over $1M in RPL and decent profits for partner are really even thinking about this kind of thing.

[NoLongerALurker]

O'MelvTTTTeney

Did they say something?

[Definitely Not North]

O'MelvTTTTeney

Did they say something?

https://abovethelaw.com/2020/09/omelven ... uses-over/

[Anonymous User]

I think that even if Cravath ends up making associates whole at the end of the year, you will see higher than usual defections from the firm. Associates have been unhappy with the way that Cravath has handled COVID/WFH in general and I think that this “fuck you” email from leadership will be the last straw for a lot of people. Even if in the end the money ends up not being different from what DPW or S&C got, I think it’ll be too late.

[Anonymous User]

People are pissed at K&E too. I'm noticing grumbling about bonuses on normal work calls/meetings. And it's crazy given how much people are working.

[Anonymous User]

People are pissed at K&E too. I'm noticing grumbling about bonuses on normal work calls/meetings. And it's crazy given how much people are working.

Agreed. Also in my office we’ve had no official communication or insight from the partners for months now about anything. We had some “Here’s a status update” Zooms in the spring and early summer. But we’ve just been in the dark since. I imagine the next one will be the usual fall “look we make a lot of money but not THAT much money” pre-bonus meeting. Morale seems unusually low now.

[Anonymous User]

People are pissed at K&E too. I'm noticing grumbling about bonuses on normal work calls/meetings. And it's crazy given how much people are working.

Agreed. Also in my office we’ve had no official communication or insight from the partners for months now about anything. We had some “Here’s a status update” Zooms in the spring and early summer. But we’ve just been in the dark since. I imagine the next one will be the usual fall “look we make a lot of money but not THAT much money” pre-bonus meeting. Morale seems unusually low now.

Got to love the "we are beating all expectations once again, but bonuses will remain stagnant" conferences. Truly great for morale.

[parkslope]

I think that even if Cravath ends up making associates whole at the end of the year, you will see higher than usual defections from the firm. Associates have been unhappy with the way that Cravath has handled COVID/WFH in general and I think that this “fuck you” email from leadership will be the last straw for a lot of people. Even if in the end the money ends up not being different from what DPW or S&C got, I think it’ll be too late.

How did Cravath handle Covid?

[Anonymous User]

I think that even if Cravath ends up making associates whole at the end of the year, you will see higher than usual defections from the firm. Associates have been unhappy with the way that Cravath has handled COVID/WFH in general and I think that this “fuck you” email from leadership will be the last straw for a lot of people. Even if in the end the money ends up not being different from what DPW or S&C got, I think it’ll be too late.

How did Cravath handle Covid?

Different anon — CSM has resisted shutting down the office for a very long time, although it caved when the city shut down. The firm remained absolutely silent for the entire 6 months about the firm finances, outlook, etc. There is no firmwide meeting, and any “outreach” that did occur seemed extremely haphazard and straight up bizarre (will not mention details but CSM associates surely know what I’m talking about). There is no visibility into how the firm is doing, we occasionally receive propaganda-like firm emails about how “collaborative” we are, while being “asked” to go on vacations and insinuated that our vacation days will not be rolled over to the following year, despite the written firm policy saying that it would. Those who did leave the firm during this period of time (clerkship, in house, competitors) had to fight for their unused vacation time to be paid out. It is extremely frustrating.

[Mullens]

I had heard rumors that Cravath was really struggling compared to other V10 firms but the above and the no-bonus announcement seems to verify that. Will be very interesting what happens to their PPP this year if they’re being so cheap as to fight associates on unpaid vacation time.

Amazing how quickly that veneer of prestige can wear off.

[sms18]

I had heard rumors that Cravath was really struggling compared to other V10 firms but the above and the no-bonus announcement seems to verify that. Will be very interesting what happens to their PPP this year if they’re being so cheap as to fight associates on unpaid vacation time.

Amazing how quickly that veneer of prestige can wear off.

What do you think is the reason for this? Is Cravath's practice not as diversified as some of the other V10? (e.g., not enough cap markets/restructuring type work being done at Cravath, compared to S&C and DPW, for example?)

[soft blue]

CSM has no real restructuring practice (one partner who’s not really a rainmaker and doesn’t seem to drive much business), they lost talented restructuring associates a recently to firms with established practices too. However, they have a solid borrower credit franchise (e.g. Sasha Rosenthal) and that should be plenty busy with workouts and new issuances.
Not at CSM but familiar with credit/restructuring market.

[Anonymous User]

I think that even if Cravath ends up making associates whole at the end of the year, you will see higher than usual defections from the firm. Associates have been unhappy with the way that Cravath has handled COVID/WFH in general and I think that this “fuck you” email from leadership will be the last straw for a lot of people. Even if in the end the money ends up not being different from what DPW or S&C got, I think it’ll be too late.

How did Cravath handle Covid?

Different anon — CSM has resisted shutting down the office for a very long time, although it caved when the city shut down. The firm remained absolutely silent for the entire 6 months about the firm finances, outlook, etc. There is no firmwide meeting, and any “outreach” that did occur seemed extremely haphazard and straight up bizarre (will not mention details but CSM associates surely know what I’m talking about). There is no visibility into how the firm is doing, we occasionally receive propaganda-like firm emails about how “collaborative” we are, while being “asked” to go on vacations and insinuated that our vacation days will not be rolled over to the following year, despite the written firm policy saying that it would. Those who did leave the firm during this period of time (clerkship, in house, competitors) had to fight for their unused vacation time to be paid out. It is extremely frustrating.

Original Cravath anon: all of that and also no tech budget (for lawyers or for support staff, who are all using their personal computers with Citrix and are correspondingly less efficient which means more lawyer work). To the above posters, Cravath is definitely not struggling financially, everyone I know is completely below water ESPECIALLY in capital markets, which has been press ganging M&A associates into service because they’re so busy.

[Anonymous User]

Does CSM not take lateral associates and partners? Seems like that would make it unbelievably difficult to diversify.

[SLS_AMG]

I think that even if Cravath ends up making associates whole at the end of the year, you will see higher than usual defections from the firm. Associates have been unhappy with the way that Cravath has handled COVID/WFH in general and I think that this “fuck you” email from leadership will be the last straw for a lot of people. Even if in the end the money ends up not being different from what DPW or S&C got, I think it’ll be too late.

How did Cravath handle Covid?

Different anon — CSM has resisted shutting down the office for a very long time, although it caved when the city shut down. The firm remained absolutely silent for the entire 6 months about the firm finances, outlook, etc. There is no firmwide meeting, and any “outreach” that did occur seemed extremely haphazard and straight up bizarre (will not mention details but CSM associates surely know what I’m talking about). There is no visibility into how the firm is doing, we occasionally receive propaganda-like firm emails about how “collaborative” we are, while being “asked” to go on vacations and insinuated that our vacation days will not be rolled over to the following year, despite the written firm policy saying that it would. Those who did leave the firm during this period of time (clerkship, in house, competitors) had to fight for their unused vacation time to be paid out. It is extremely frustrating.

Original Cravath anon: all of that and also no tech budget (for lawyers or for support staff, who are all using their personal computers with Citrix and are correspondingly less efficient which means more lawyer work). To the above posters, Cravath is definitely not struggling financially, everyone I know is completely below water ESPECIALLY in capital markets, which has been press ganging M&A associates into service because they’re so busy.

I get that everyone loves to defend their firm from outsiders, but the bolded means nothing. And FWIW, I have heard the same regarding the firm struggling.

[Anonymous User]

Does CSM not take lateral associates and partners? Seems like that would make it unbelievably difficult to diversify.

Technically it doesn’t. Lately the firm has been relaxing that standard and taking back associates and partners if they started at CSM.

Regarding CSM finances — litigation isn’t doing that hot. Maybe one or two busy cases but nothing like it used to be. I did hear that cap market was very busy but m and a isn’t. Again, all this information I had to collect through friends not the leadership. We asked the partners to share which practice groups were busy, etc., and all of that has been ignored.

[Anonymous User]

I feel there is significant evidence that firms which are not giving bonuses are not doing so hot financially, despite the arguments to the contrary (probably by worried associates at the firms themselves, although I understand that people may still be working hard.)

I can only think of two firms that have made no changes to their structure, are starting their associates on time in the fall, and gave full fall bonuses. These two firms are Debevoise and Freshfields. I believe it is these two firms that deserve the most credit, as they have fully met their obligations. The rest of the firms seem to be somehow robbing Peter to pay Paul in this instance, by either screwing incoming associates, or screwing low performing partners, in order to pay bonuses to others.

Looking at the others firms which have, so far, given this fall bonus, we see that firms like Sullivan and Cromwell, Simpson Thacher, and Shearman are both starting some or all of their incoming associates in January (https://www.reddit.com/r/LawSchool/comm ... rst_years/). This late start date for associates means that these firms will have extra money on hand in the fall to distribute with these bonuses. In a sense, then, they are not fulfilling their normal obligations to their incoming class (to start them on time), and are allowing current associates to profit off their failure to do right by their incoming associates.

In the case of Davis Polk, I feel that the decision to give this special bonus cannot be separated from their decision a few days before the bonus announcement to abandon the lockstep model (https://abovethelaw.com/2020/09/davis-p ... step-firm/). Abandoning lockstep likely means that Davis Polk cut certain partner draws (these being the partners that did not have much work). In a time like this, abandoning pure lockstep for modified lockstep likely would lead to a significant financial windfall for a firm, which could then distribute that windfall in bonuses.

It is clear that some firms simply cannot afford these bonuses. A firm like Cravath, for instance, has to worry about making payroll in the fall with its incoming class, and this likely drives its inability to give bonuses. All this means that it is clear that most firms in the market, at present, are not able to fully meet their normal obligations of giving market bonuses, starting all staff on time, and maintaining their structures. At least, that seems to be what the evidence so far is pointing to.