Cleary Follows Cravath's Lead On Bonuses

By Anne Urda

Law360, New York (November 09, 2009) -- Cleary Gottlieb Steen & Hamilton LLP has decided to mimic Cravath Swaine & Moore LLP's recently announced associate bonus structure model and pay junior associates less than half of what they earned in 2008.

On Friday, Cleary announced in a memo to associates entering their second year in January that they will earn $7,500 in year-end bonuses, a drop-off from the $17,500 doled out last year, according to legal blog Above the Law.

Associates in the 2007 and 2006 classes will earn $10,000 and $15,000, respectively, with those hailing from the years 2005 and 2004 netting approximately $20,000 and $25,000, respectively, the firm memo states.

Associates who have worked at the firm since 2002 and earlier are expected to earn $30,000 when the bonuses are handed out on Dec. 15, according to the firm.

“We thank you all for the terrific work you have done for our clients over the past year, and in particular, for demonstrating time and again your ability to adapt to the rapidly changing legal landscape presented by global economic conditions,” partners Jeffrey Karpf and Derek Bush wrote in the internal memo.

A representative from Cleary said Monday that the firm was aware the internal memo had somehow found its way onto various legal blogs but that the firm was not commenting on the information release.

The Cleary news suggests that Cravath may set the standard for bonuses this year, with other firms likely to match but not exceed the powerhouse's end-of-year awards.

The Cravath bonuses, to be paid Dec. 11, will be $7,500 to the class of 2008, $10,000 to the class of 2007, $15,000 to the class of 2006, $20,000 to the class of 2005, $25,000 to the class of 2004, and $30,000 to the classes of 2002 and 2003, the firm said in a memo Nov. 2.

They will be determined on an individual basis for special associates and discovery attorneys, it said.

The figures are down slightly from 2008, when bonuses ranged from $17,500 for first-year associates to $30,000 for more seasoned associates, according to Above the Law.

When Cravath announced its bonuses last year, it attempted to tamp down expectations for 2009, citing the uncertainty of the economic future.

Like many others, the firm has continued to proceed cautiously throughout the year, choosing to offer incoming associates in June $80,000 if they agreed to postpone their start dates from fall 2009 to fall 2010.

--Additional reporting by Julie Zeveloff, Erin Coe and Tina Peng