Fall bonuses Forum

[NoLongerALurker]

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.

Good post.

Now seems like a good time to point out several of the firms that have not paid bonuses are also deferring their incoming class. At least firms in the position of S&C, even if essentially just re-allocating a shortfall such that current associates profit off incoming associates, are making sure money is directed to associates in some manner.

[legalpotato]

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.

Sorry you were deferred, truly, but believe there is another thread for that.

[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.

Sorry you were deferred, truly, but believe there is another thread for that.

Funnily enough, I wasn't, and in any case you kind of missed the point of the post above. The point is that most of the firms which are giving bonuses appear to only be able to give these bonuses because they deferred associates, which is indicative of a weakened financial position.

The point is not, therefore, to discuss the deferrals themselves, but rather to note that the money for these bonuses is coming from the deferrals. So most of these firms are not fulfilling all of their obligations (which are to both meet the market bonus scale and to start people at the normal time for the market).

Firms like Debevoise prove that you can, and should, do both. The fact that not everyone is able to is, to me, indicative of a weakened financial position, given that firms were able to easily do both as little as two years ago (when a mid-year summer bonus was given out without deferring incoming associates).

What we are seeing is firms failing to meet some of their obligations in order to try and meet other obligations. They are either not starting people on time, but paying bonuses, or starting people on time, but not paying bonuses. That is not the sign of a financially healthy organization, which is able to meet all obligations, as opposed to having to erratically try and move money around to do things.

[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.

DPW associate here. DPW's modified lockstep system goes into effect in January. Suggesting the revised system led to a windfall that was then distributed as bonuses is just patently false. Hope this helps.

[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.

DPW associate here. DPW's modified lockstep system goes into effect in January. Suggesting the revised system led to a windfall that was then distributed as bonuses is just patently false. Hope this helps.

So the windfall comes in January then. In any case, the modified lockstep system, in this economy, will likely mean certain partners losing money in January, which likely meant the firm felt more comfortable giving money in bonuses now, knowing that the money could be recouped in January.

I'm not sure why you're taking such offense to the suggestion. I'm not even opposed to what DPW has done, in fact, as an associate I am quite happy for comp to be redistributed, even slightly, from partners down to associates.

[legalpotato]

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.

Sorry you were deferred, truly, but believe there is another thread for that.

Funnily enough, I wasn't, and in any case you kind of missed the point of the post above. The point is that most of the firms which are giving bonuses appear to only be able to give these bonuses because they deferred associates, which is indicative of a weakened financial position.

The point is not, therefore, to discuss the deferrals themselves, but rather to note that the money for these bonuses is coming from the deferrals. So most of these firms are not fulfilling all of their obligations (which are to both meet the market bonus scale and to start people at the normal time for the market).

Firms like Debevoise prove that you can, and should, do both. The fact that not everyone is able to is, to me, indicative of a weakened financial position, given that firms were able to easily do both as little as two years ago (when a mid-year summer bonus was given out without deferring incoming associates).

What we are seeing is firms failing to meet some of their obligations in order to try and meet other obligations. They are either not starting people on time, but paying bonuses, or starting people on time, but not paying bonuses. That is not the sign of a financially healthy organization, which is able to meet all obligations, as opposed to having to erratically try and move money around to do things.

lol ok.gif

[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.

DPW associate here. DPW's modified lockstep system goes into effect in January. Suggesting the revised system led to a windfall that was then distributed as bonuses is just patently false. Hope this helps.

So the windfall comes in January then. In any case, the modified lockstep system, in this economy, will likely mean certain partners losing money in January, which likely meant the firm felt more comfortable giving money in bonuses now, knowing that the money could be recouped in January.

I'm not sure why you're taking such offense to the suggestion. I'm not even opposed to what DPW has done, in fact, as an associate I am quite happy for comp to be redistributed, even slightly, from partners down to associates.

DPW associate here. I'm not taking offense--it's just that the underlying suggestion that DPW is in a "weakened financial state" per your original post couldn't be further from the truth. And you will see that when PPP and RPL numbers are released next year.

[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.

Sorry you were deferred, truly, but believe there is another thread for that.

Funnily enough, I wasn't, and in any case you kind of missed the point of the post above. The point is that most of the firms which are giving bonuses appear to only be able to give these bonuses because they deferred associates, which is indicative of a weakened financial position.

The point is not, therefore, to discuss the deferrals themselves, but rather to note that the money for these bonuses is coming from the deferrals. So most of these firms are not fulfilling all of their obligations (which are to both meet the market bonus scale and to start people at the normal time for the market).

Firms like Debevoise prove that you can, and should, do both. The fact that not everyone is able to is, to me, indicative of a weakened financial position, given that firms were able to easily do both as little as two years ago (when a mid-year summer bonus was given out without deferring incoming associates).

What we are seeing is firms failing to meet some of their obligations in order to try and meet other obligations. They are either not starting people on time, but paying bonuses, or starting people on time, but not paying bonuses. That is not the sign of a financially healthy organization, which is able to meet all obligations, as opposed to having to erratically try and move money around to do things.

lol ok.gif

I don't want to out the firm that I'm with, but, logically speaking, isn't it just as likely that I am someone who is starting on time, but is disgruntled about not receiving the bonus, as someone who has been deferred at a firm that did give the bonus? In any case, I am not an incoming associate, so this is all irrelevant to me.

[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.

DPW associate here. DPW's modified lockstep system goes into effect in January. Suggesting the revised system led to a windfall that was then distributed as bonuses is just patently false. Hope this helps.

So the windfall comes in January then. In any case, the modified lockstep system, in this economy, will likely mean certain partners losing money in January, which likely meant the firm felt more comfortable giving money in bonuses now, knowing that the money could be recouped in January.

I'm not sure why you're taking such offense to the suggestion. I'm not even opposed to what DPW has done, in fact, as an associate I am quite happy for comp to be redistributed, even slightly, from partners down to associates.

DPW associate here. I'm not taking offense--it's just that the underlying suggestion that DPW is in a "weakened financial state" per your original post couldn't be further from the truth. And you will see that when PPP and RPL numbers are released next year.

Fair enough (there are certainly practice areas that are doing well in this time, as we all know), but the departure from lockstep would seem to indicate that the firm did not have confidence in its old model, perhaps because of the divergence between certain practice groups at the firm, meaning that it wished to pay the partners of certain low-performing practice groups less than high-performing practice groups.

My main point here is really that there is evidence that most firms that are giving the bonus seem to have engaged in some kind of cut elsewhere in order to meet this bonus, and that that behavior is indicative of a firm in a weakened financial state. Whether or not an individual firm is actually in a weakened financial state is obviously something I couldn't speak to. I can only speak to the public behavior of a firm, not its private financial numbers.

[inter-associate]

I think folks are reading too much into payment vs. non-payment of fall bonus and deferment vs. non-deferment of associate start dates. Maybe for some they may be additional indicators of financial issues or diminishing financial prowess vs. peers. However, for others they really were just attempts by the powers that be to make the best decision for their particular firm, and those decisions involve a variety of factors. Justified or not, client perception, the ability to attract and retain rainmakers, confidence in ability to make associates whole at year end, ability to pay staff that is somewhat redundant in WFH world and perceived need to reward/incentivize associates are all relevant, and I could see reasonable minds differing on the best approach to balancing those factors. I’ve concluded that that is the reason for the bifurcation even among elite firms on things like fall bonuses/deferrals/etc. Just decision makers coming to what they believe to be the best decision.

That said, I see no reason to fault an associate (incoming or otherwise) for being bummed or even angry at not getting an early bonus or getting deferred a few months. I just don’t think most associates have enough of a window into what is actually being considered at the higher levels of firm management to opine on what these decisions actually represent in terms of firm health, etc.

[Anonymous User]

Skadden has been on a pretty aggressive cost cutting push for the last few years. Things seem slower than usual, but plenty of people are extremely busy. I think this (no bonus yet; pushing start date) is less a result of poor performance and more just consistent with their approach to jump on any opportunity to cut back. We've received no communication regarding the bonus, but we have periodic video updates where they tell us how it's our best year ever, etc. Given that they only pay bonuses to people annualizing 1800, they wouldn't have to pay this to anyone that isn't profitable, even if they did match.

COVID response generally has been good. They sent out monitors and printers right away (phones later) and generally the official messaging has been "no need to come in until you feel safe to do so." Still have the lunatics who go in every day for no reason, but overall people have been pretty reasonable.

I don't think anyone here views us as a "compensation leader" by any stretch of of the imagination.

[Chrstgtr]

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.

DPW associate here. DPW's modified lockstep system goes into effect in January. Suggesting the revised system led to a windfall that was then distributed as bonuses is just patently false. Hope this helps.

So the windfall comes in January then. In any case, the modified lockstep system, in this economy, will likely mean certain partners losing money in January, which likely meant the firm felt more comfortable giving money in bonuses now, knowing that the money could be recouped in January.

I'm not sure why you're taking such offense to the suggestion. I'm not even opposed to what DPW has done, in fact, as an associate I am quite happy for comp to be redistributed, even slightly, from partners down to associates.

DPW associate here. I'm not taking offense--it's just that the underlying suggestion that DPW is in a "weakened financial state" per your original post couldn't be further from the truth. And you will see that when PPP and RPL numbers are released next year.

Fair enough (there are certainly practice areas that are doing well in this time, as we all know), but the departure from lockstep would seem to indicate that the firm did not have confidence in its old model, perhaps because of the divergence between certain practice groups at the firm, meaning that it wished to pay the partners of certain low-performing practice groups less than high-performing practice groups.

My main point here is really that there is evidence that most firms that are giving the bonus seem to have engaged in some kind of cut elsewhere in order to meet this bonus, and that that behavior is indicative of a firm in a weakened financial state. Whether or not an individual firm is actually in a weakened financial state is obviously something I couldn't speak to. I can only speak to the public behavior of a firm, not its private financial numbers.

This isn't a meaningful observation because basically every firm has made cuts somewhere--show me the list of firms that didn't push back start dates from their usual September time.

Also, most firms' fiscal year ends in a few months, so if the firms don't have this cash on hand then they are at serious risk of going defunkt.

Not paying out bonuses is just unadulterated greed. Freshfields, a firm that *only* had PPP profits of $2.3M last year, was able to pay out the bonus. A firm like Cravath (KE, Skadden, Gibson, Quinn, Fried Frank, et al.) could see their profits decrease by a third (or much more and this won't happen anyways) and still have profits higher than Freshfields. Choosing not to pay out is either greed (or some strategic PR decision, which would only kick the can down the road 2 months and replace the ultimate headline from "debt-laden law firm associate gets windfall during pandemic" to "multi-millionaire law firm partner continues to make millions").

[Anonymous User]

I think folks are reading too much into payment vs. non-payment of fall bonus and deferment vs. non-deferment of associate start dates. Maybe for some they may be additional indicators of financial issues or diminishing financial prowess vs. peers. However, for others they really were just attempts by the powers that be to make the best decision for their particular firm, and those decisions involve a variety of factors. Justified or not, client perception, the ability to attract and retain rainmakers, confidence in ability to make associates whole at year end, ability to pay staff that is somewhat redundant in WFH world and perceived need to reward/incentivize associates are all relevant, and I could see reasonable minds differing on the best approach to balancing those factors. I’ve concluded that that is the reason for the bifurcation even among elite firms on things like fall bonuses/deferrals/etc. Just decision makers coming to what they believe to be the best decision.

That said, I see no reason to fault an associate (incoming or otherwise) for being bummed or even angry at not getting an early bonus or getting deferred a few months. I just don’t think most associates have enough of a window into what is actually being considered at the higher levels of firm management to opine on what these decisions actually represent in terms of firm health, etc.

Anon above, I think this is a fair counter-argument in the broad sense, and do agree with it somewhat. Nonetheless, I feel that in this particular instance, we are seeing a relatively strong correlation, whereby we can point to most of the firms paying the bonus having made a cut (usually in terms of deferment) elsewhere. Again, the only firms I can think of that both started their incoming class on time, and paid the bonus, are Debevoise and Freshfields.

It really does seem that, in most cases, firms are deciding to one or the other, this being pay the bonus or start the class on time. Is it possible that this is a coincidence? Sure. But one also could argue that it seems that firms are choosing one or the other here.

[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.

DPW associate here. DPW's modified lockstep system goes into effect in January. Suggesting the revised system led to a windfall that was then distributed as bonuses is just patently false. Hope this helps.

So the windfall comes in January then. In any case, the modified lockstep system, in this economy, will likely mean certain partners losing money in January, which likely meant the firm felt more comfortable giving money in bonuses now, knowing that the money could be recouped in January.

I'm not sure why you're taking such offense to the suggestion. I'm not even opposed to what DPW has done, in fact, as an associate I am quite happy for comp to be redistributed, even slightly, from partners down to associates.

DPW associate here. I'm not taking offense--it's just that the underlying suggestion that DPW is in a "weakened financial state" per your original post couldn't be further from the truth. And you will see that when PPP and RPL numbers are released next year.

Fair enough (there are certainly practice areas that are doing well in this time, as we all know), but the departure from lockstep would seem to indicate that the firm did not have confidence in its old model, perhaps because of the divergence between certain practice groups at the firm, meaning that it wished to pay the partners of certain low-performing practice groups less than high-performing practice groups.

My main point here is really that there is evidence that most firms that are giving the bonus seem to have engaged in some kind of cut elsewhere in order to meet this bonus, and that that behavior is indicative of a firm in a weakened financial state. Whether or not an individual firm is actually in a weakened financial state is obviously something I couldn't speak to. I can only speak to the public behavior of a firm, not its private financial numbers.

This isn't a meaningful observation because basically every firm has made cuts somewhere--show me the list of firms that didn't push back start dates from their usual September time.

Also, most firms' fiscal year ends in a few months, so if the firms don't have this cash on hand then they are at serious risk of going defunkt.

Not paying out bonuses is just unadulterated greed. Freshfields, a firm that *only* had PPP profits of $2.3M last year, was able to pay out the bonus. A firm like Cravath (KE, Skadden, Gibson, Quinn, Fried Frank, et al.) could see their profits decrease by a third (or much more and this won't happen anyways) and still have profits higher than Freshfields. Choosing not to pay out is either greed (or some strategic PR decision, which would only kick the can down the road 2 months and replace the ultimate headline from "debt-laden law firm associate gets windfall during pandemic" to "multi-millionaire law firm partner continues to make millions").

I think this certainly has something to do with it. I think a financial slowdown is also a contributor to bringing out the normal greed of partners, as there is simply less to go around now.

It is probably hard for us associates to understand this, but there is a difference between hours billed and collections. I think the problem right now is an issue of collections, not an issue of hours billed, meaning that associates may still think their firms are doing well, when, in fact, they may not be doing as well as thought.

[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.

Good post.

Now seems like a good time to point out several of the firms that have not paid bonuses are also deferring their incoming class. At least firms in the position of S&C, even if essentially just re-allocating a shortfall such that current associates profit off incoming associates, are making sure money is directed to associates in some manner.

To be precise, S&C gave an option to start either in Novemebr or January. We don’t know how many associates chose January start date, so not sure how the firm is saving money by deferring its associates argument makes sense here.

[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.

Good post.

Now seems like a good time to point out several of the firms that have not paid bonuses are also deferring their incoming class. At least firms in the position of S&C, even if essentially just re-allocating a shortfall such that current associates profit off incoming associates, are making sure money is directed to associates in some manner.

Sorry duplicate post. delete.

[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.

You should include Milbank on your list with Debevoise and Freshfields, no?

[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.

You should include Milbank on your list with Debevoise and Freshfields, no?

I don't for the same reason I don't include S&C. I am not a fan of these so-called January start date "options" as I feel they open up the possibility of informal pressure on certain incoming associates (perhaps from low-performing groups) to be pressured to take the option, thereby potentially creating two tiers of incoming associates at the firm. Consider PW's practice group specific start dates, for instance. We know that firms do things like cold offers, so I think that having a January start date "option" is not a super desirable thing, all things considered.

In any case, the firm is saving money by not paying whatever portion of people "choose" the January start date until January, thereby potentially freeing up money for bonuses.

Obviously though, S&C and Milbank are closer to fulfilling all of their obligations than some of the other firms.

[Ultramar vistas]

There is not nearly enough of a large sample size to be talking about a correlation.

Again, understanding that everyone wants to get paid and is super keen to shame firms that don’t immediately open their pockets, there’s another equally spurious correlation to be drawn between follower firms and firms publicly stating that they won’t pay bonus, and that’s security vs. insecurity.

Cravath is Cravath. They don’t care what recruits and associates think.

K&E is K&E. Outside of Wachtell, most profitable, biggest revenues, nothing to prove there. They can sit back and pay mega bonuses in January and no one will remember a 3 month blip.

OM&M are the lifestyle firm in California. They seem happy to top associate satisfaction charts every year and know that nothing is going to hit their recruiting given that reputation and their location.

On the other hand:

Cooley - inadvertently starts this whole thing with a much smaller bonus, probably trying to get one over on less diversified VC/EG firms like Gunderson and Orrick who have had a tougher time of it.

DPW - slipping out of the V5 and senses a chance to be viewed as a comp leader again.

Milbank - remembers the huge bump it got a few years back from leading the way, and tries to recapture the magic.

Freshfields - doesn’t really understand America, just thinks that it knows it has to follow what it’s perceived peer firms does to stand a chance of being taken seriously.

Weil - falling out of the V10, hugely overworked BK team, thinks it has to play the bonus game but wants to limit it to those truly getting crushed. Tweaks the scale.

Debevoise - I don’t know or care.

[Anonymous User]

I think folks are reading too much into payment vs. non-payment of fall bonus and deferment vs. non-deferment of associate start dates. Maybe for some they may be additional indicators of financial issues or diminishing financial prowess vs. peers. However, for others they really were just attempts by the powers that be to make the best decision for their particular firm, and those decisions involve a variety of factors. Justified or not, client perception, the ability to attract and retain rainmakers, confidence in ability to make associates whole at year end, ability to pay staff that is somewhat redundant in WFH world and perceived need to reward/incentivize associates are all relevant, and I could see reasonable minds differing on the best approach to balancing those factors. I’ve concluded that that is the reason for the bifurcation even among elite firms on things like fall bonuses/deferrals/etc. Just decision makers coming to what they believe to be the best decision.

That said, I see no reason to fault an associate (incoming or otherwise) for being bummed or even angry at not getting an early bonus or getting deferred a few months. I just don’t think most associates have enough of a window into what is actually being considered at the higher levels of firm management to opine on what these decisions actually represent in terms of firm health, etc.

this the right take. the other anon's post about freshfields and debevoise is painfully wrong.

[Anonymous User]

Cravath associate here. I think the firm's move can only be chalked up to protecting the size of the pie.

We have weekly checkin calls with our group (each group has 4/5 partners) and we're told the financial health of the firm is "robust" and "exceeds even pre-pandemic projections."

I guess the partners could just be straight up lying to us on those calls, or "pre-pandemic projections" weren't that high to begin with. Just seems unlikely because the hours are crazy in corporate (in fact M&A seems even busier than cap markets in the last two weeks). I know hours billed don't necessarily mean collections, but in the dozen or so of my closings this year where payment of counsel's fee is in the funds flow / a closing condition, I've literally seen the wires coming into the firm and there's no mismatch between how many hours I know were spent on this deal and what I'd expect to be paid.

Unless the lit group is literally twiddling their thumbs, not sure where the leak is.

eta: also, if the lit group really is just sitting there doing nothing, I can see why the partnership doesn't want to pay a bonus by class year. There is absolutely no room to deviate from lockstep for the December bonus, but seems silly to add salt to the wound when most people are trying to move away from lockstep...

[Anonymous User]

The bottom line, however, is that this is an unprecedented deviation from market bonus, of a kind that would have been unthinkable when the mid year bonus came out in 2018.

For a long time, it has been taken as a given that the top firms will always match each other, and even the 2008 recession did not break this understanding. Now, it has been broken with the failure to pay this bonus. If things are really going as well as they always have, it makes little sense that the partners suddenly became so much more greedy. These firms are taking a serious reputational hit in order to avoid these obligations. Are we to really believe that firms care so much less about their position in the market compared to two years ago? The better explanation would seem to be that as the pie gets smaller, the partners are attempting to hoard their share.

Suffice to say that the attempts to spin this as somehow a desirable or reasonable thing are frankly asinine, particularly coming from the very associates who are losing money as compared to their peers (a classic case of turkeys voting for Christmas). It really seems hard to imagine that these firms delaying start dates, or refusing bonuses, would deliberately, and publicly, choose to make themselves less desirable in this manner if they could avoid it. Evidently, anyone with a choice in the matter would be picking a firm that could meet all of its obligations, such as Debevoise or Freshfields, rather than a firm that can't or won't.

Students in the coming OCI ought to remember this.

[Anonymous User]

The bottom line, however, is that this is an unprecedented deviation from market bonus, of a kind that would have been unthinkable when the mid year bonus came out in 2018.

For a long time, it has been taken as a given that the top firms will always match each other, and even the 2008 recession did not break this understanding. Now, it has been broken with the failure to pay this bonus. If things are really going as well as they always have, it makes little sense that the partners suddenly became so much more greedy. The explanation would seem to be that as the pie gets smaller, the partners are attempting to hoard their share.

Suffice to say that the attempts to spin this as somehow a desirable or reasonable thing are frankly asinine, particularly coming from the very associates who are losing money as compared to their peers (a classic case of turkeys voting for ChristmasThanksgiving). It really seems hard to imagine that these firms delaying start dates, or refusing bonuses, would deliberately, and publicly, choose to make themselves less desirable in this manner if they could avoid it. Evidently, anyone with a choice in the matter would be picking a firm that could meet all of its obligations, such as Debevoise or Freshfields, rather than a firm that can't or won't.

Students in the coming OCI ought to remember this.

I think the much more pressing issue is lack of morale in the existing associates at firms who haven't matched, affecting live client matters. Nobody really cares that much about what current 2Ls think tbh. . . like Latham even after pulling that crisis stunt still has the luxury of turning away thousands of applicants each year.

[Anonymous User]

Cravath associate here. I think the firm's move can only be chalked up to protecting the size of the pie.

We have weekly checkin calls with our group (each group has 4/5 partners) and we're told the financial health of the firm is "robust" and "exceeds even pre-pandemic projections."

I guess the partners could just be straight up lying to us on those calls, or "pre-pandemic projections" weren't that high to begin with. Just seems unlikely because the hours are crazy in corporate (in fact M&A seems even busier than cap markets in the last two weeks). I know hours billed don't necessarily mean collections, but in the dozen or so of my closings this year where payment of counsel's fee is in the funds flow / a closing condition, I've literally seen the wires coming into the firm and there's no mismatch between how many hours I know were spent on this deal and what I'd expect to be paid.

Unless the lit group is literally twiddling their thumbs, not sure where the leak is.

eta: also, if the lit group really is just sitting there doing nothing, I can see why the partnership doesn't want to pay a bonus by class year. There is absolutely no room to deviate from lockstep for the December bonus, but seems silly to add salt to the wound when most people are trying to move away from lockstep...

I get that lockstep is special but the bolded seems to mistake something relevant to partner compensation as something relevant to associate compensation.

I believe whether to continue splitting up partnership profits lockstep is a contentious issue at Cravath/Cleary(still?)/pre-2021DPW/Debevoise(still?), but that is hardly relevant to associate compensation at those places. My practice group is one of the busiest at my (not Cravath) firm, but I still don't like the idea that a slow group of associates should get dinged or that anyone should deny them this (random, unforeseen, ostensibly-COVID-related-but-obviously-tactical) largesse. Unlike partners, it isn't the slow associates' fault that they're slow, and they're still litigation associates at Cravath, which I'm willing to bet is a bummer regardless of the hours.

[Anonymous User]

Cravath associate here. I think the firm's move can only be chalked up to protecting the size of the pie.

We have weekly checkin calls with our group (each group has 4/5 partners) and we're told the financial health of the firm is "robust" and "exceeds even pre-pandemic projections."

I guess the partners could just be straight up lying to us on those calls, or "pre-pandemic projections" weren't that high to begin with. Just seems unlikely because the hours are crazy in corporate (in fact M&A seems even busier than cap markets in the last two weeks). I know hours billed don't necessarily mean collections, but in the dozen or so of my closings this year where payment of counsel's fee is in the funds flow / a closing condition, I've literally seen the wires coming into the firm and there's no mismatch between how many hours I know were spent on this deal and what I'd expect to be paid.

Unless the lit group is literally twiddling their thumbs, not sure where the leak is.

eta: also, if the lit group really is just sitting there doing nothing, I can see why the partnership doesn't want to pay a bonus by class year. There is absolutely no room to deviate from lockstep for the December bonus, but seems silly to add salt to the wound when most people are trying to move away from lockstep...

I get that lockstep is special but the bolded seems to mistake something relevant to partner compensation as something relevant to associate compensation.

I believe whether to continue splitting up partnership profits lockstep is a contentious issue at Cravath/Cleary(still?)/pre-2021DPW/Debevoise(still?), but that is hardly relevant to associate compensation at those places. My practice group is one of the busiest at my (not Cravath) firm, but I still don't like the idea that a slow group of associates should get dinged or that anyone should deny them this (random, unforeseen, ostensibly-COVID-related-but-obviously-tactical) largesse. Unlike partners, it isn't the slow associates' fault that they're slow, and they're still litigation associates at Cravath, which I'm willing to bet is a bummer regardless of the hours.

Fair fair. I was talking about lockstep associate comp, though, and what I meant with people trying to move away from it, I was referring to the hours requirements or variation in bonuses based on hours, practice groups, location, etc. at other firms. At Cravath or STB(?) an associate who does 800 hours of doc review in the White Plains annex facility gets the same bonus as one who does 2400 hours of significantly more taxing, revenue-generating work as long as the two are the same class year, and will even get her own office (and Seamless delivery!) before the other if alphabetically her name is first.

That makes associate life a lot better and less competitive, but it's also hard to reward associates who may be more valuable to the firm. It's not like you can even pay in kind by way of over-the-top "closing dinners" or "deal team bonding" trips during a quarantine. . .