- Law firms
- McDermott, Cravath, Baker McKenzie and Boies Schiller Flexner have so far circulated associate bonus figures
- McDermott and Boies Schiller offering extra payouts
Nov 30 - McDermott, Will & Emery and Cravath, Swaine & Moore are the latest U.S. law firms to announce seniority-based associate year-end bonuses.
Bonuses at both firms will start at $15,000 pro-rated for the class of 2022, according to internal memos circulated by Cravath on Tuesday and McDermott on Wednesday.
McDermott' scale rises to $115,000 for the class of 2015, while Cravath's reaches $105,000 for the class of 2016, excluding eighth year associates in a departure from past years. Cravath's bonuses otherwise mirror its 2021 payouts.
A McDermott spokesperson confirmed details of the firm's bonuses. Cravath declined to comment on its bonus memo, which was first reported by legal blog Above the Law.
McDermott chair Ira Coleman said in the memo to U.S. associates on Wednesday that the compensation range is set for "those who meet our standard bonus-eligible-hours threshold."
Some associates will get paid even more. The firm uses an "individual merit-based system" that "provides for substantial incremental bonuses for those who go above and beyond in terms of hours expectations and performance," Coleman wrote. "In fact, about 65% of our Associates will earn above the Cravath scale." He did not specify the possible amounts.
The scale at Cravath, which rivals have historically used as a benchmark, kicked off the bonus season among big law firms in 2021 amid a legal market boom and heavy competition for talent. Firms also raised associate salaries last year as transactional practice demand soared and firms sought to keep and attract lawyers.
Cravath this year follows Baker McKenzie, which announced bonuses last week. Boies Schiller Flexner on Tuesday also circulated its bonus schedule, which includes extra money for high-billers up to $165,000.
Cravath's bonus eligibility is not tied to billable hours criteria, the firm's leaders said in their memo, noting that "virtually all" associates will get the full bonus, which is dependent on performance.
Bonuses have been more uncertain this year as firms face slowing demand, particularly for M&A work, and rising expenses.
A recent report from Wells Fargo's Legal Specialty Group found that law firm demand, calculated as the number of billable hours lawyers logged, dipped by .08% in the first nine months of this year from a year earlier, and net income for firms dropped by 7.3% in the first three quarters of 2022.
(NOTE: This story was updated to include McDermott's bonus scale.)
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