Earlier this month, I wondered: could the bumper crop of new partners at Cravath bode well for bonuses? Although firms like Cravath generally make partnership decisions with a focus on the longer term, as opposed to based on short-term financial performance, a class of five partners is one of the largest Cravath has had in years. It certainly seems to reflect a good degree of confidence about the firm’s future.
Now we have our answer as to the size of Cravath bonuses. The firm just announced its year-end bonuses for 2012. Sit up and take notes, since the Cravath bonus scale sets the bar for most other major law firms….
Here is what Cravath’s 2012 year-end bonus scale — a scale that will be widely adopted all over Biglaw in the days and weeks ahead — looks like (via Peter Lattman of DealBook):
Class of 2012 — $10,000 (pro-rated)
Class of 2011 — $10,000
Class of 2010 — $14,000
Class of 2009 — $20,000
Class of 2008 — $27,000
Class of 2007 — $34,000
Class of 2006 — $40,000
Class of 2005 — $50,000
Class of 2004 — $60,000
How does this compare to last year? For ease of reference, here is the 2011 year-end bonus scale:
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
Note, however, that Cravath associates did not receive spring bonuses in 2012. Back in 2011, they received spring bonuses in the following amounts:
Class of 2010: $2,500
Class of 2009: $7,500
Class of 2008: $10,000
Class of 2007: $15,000
Class of 2006: $20,000
Class of 2005: $20,000
Class of 2004: $20,000
Thus, in 2011, Cravath associates received the following in total bonus compensation (adding spring and year-end bonuses):
Class of 2010: $10,000
Class of 2009: $17,500
Class of 2008: $25,000
Class of 2007: $35,000
Class of 2006: $45,000
Class of 2005: $50,000
Class of 2004: $57,500
So here’s a comparison of 2011 and 2012 total bonus compensation:
Class Year — 2011 — 2012
1st Years (stub) — $0 — $10,000 prorated
1st Years — $10,000 — $10,000
2nd Years — $17,500 — $14,000
3rd Years — $25,000 — $20,000
4th Years — $35,000 — $27,000
5th Years — $45,000 — $34,000
6th Years — $50,000 — $40,000
7th Years — $57,500 — $50,000
8th Years — $57,500 — $60,000
[More analysis to follow; refresh your browser for the latest version of this post; RSS readers, please visit the main page.]
As for timing, apparently Cravath didn’t like our idea of announcing and paying bonuses early to help employees adversely affected by Hurricane Sandy. Just as it did in 2011, Cravath announced on the last Monday in November. In 2010, the firm announced on November 22 — the second-to-last Monday in November, and before Thanksgiving. Back in 2009, the firm announced on November 2, the first Monday in November. Based on the past few years, it seems that Cravath is announcing its bonuses later and later (but still always on a Monday in November).
Now flip to the next page for (1) color commentary by Elie Mystal and (2) the full Cravath memo.
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