The much-hyped year-end bonuses offered by Cravath Swaine & Moore and other U.S. law firms are not all that great as they come with conditions attached.
Cravath announced its bonuses ranging from $7,500 to $35,000 for its associates. The senior-most associates or associates who have been with the firm for at least seven years will receive a bonus of $35,000. The bonus will be paid on Dec. 10, 2010.
Morrison & Foerster (MoFo) also announced its year-end bonuses to its associates, and the amounts matches the Cravath scale with a top payout of $35,000.
However, associates of the MoFo received the announcement of the possible bonuses in two vague memos full of caveats and out-outs, reports Above the Law.
According to the memo, associates will earn bonuses if the firm meets its net income budget, and the amounts paid could be adjusted downwards based on associate contributions.
The memo further said that the New York-based associates will receive the Cravath's scale, while associates outside of New York will get their bonuses based on the non-New York U.S. structure.
While the New York discretionary bonus is not contingent on achieving a specific hours target, should bonuses be paid, the memo said. The amount may vary based on significant differences in levels of contribution, either as to quality or commitment, and an individual discretionary bonus may be adjusted downwards or withheld.
The memo further unveils more caveats. Associates of the firm will be paid bonuses only if the firm earns its budgetary projections. The firm, however, has not disclosed its target.
The other condition is that the firms' associates will have to meet certain subjective factors, but MoFo did not explain the factors. The one objective criteria is billable hours. The other factor is 'merit-basis.'
MoFo will pay the bonus on Feb. 15, 2011.
Willkie Farr also has decided to match the Cravath's scale. The bonuses will be paid on December 17, 2010, so Willkie associates will have to wait more than their Cravath counterparts to get their bonus amounts.
Akin Gump has also announced associate bonuses, matching the Cravath's structure, at least in New York. What's potentially not fair, however, is the timing of the bonus payments: Akin Gump associates will have to wait until 2011 to actually collect their 2010 bonuses. The bonuses will be paid with the Feb. 15, 2011 payroll.
Cahill Gordon & Reindel LLP bonus announcement is particularly interesting.
According to Above the Law, a Cahill tipster said that in a meeting with firm partners, the associates were told that they would be given a multiple of the Cravath bonus.
Partners allegedly told the associates that they would be paid one bonus in December and another in January. As to what the multiple is, it's anybody's guess.
Skadden, Arps, Slate, Meagher & Flom and Milbank Tweed Hadley & McCloy have also announced year-end bonuses for its associates in the Cravath's range, depending on the number of years they have been with the firm.
While Cravath associates will receive their bonuses on Dec. 10, Skadden and Milbank associates will receive their bonuses on Dec. 17, 2010, and Jan. 15, 2011, respectively.
Weil, Gotshal & Manges also released an internal memo to its associates that said they will be paid 2010 bonuses that are commensurate with bonuses paid by peer firms. The law firm will pay the bonuses on Dec. 23, 2010.
However, according to Above the Law, this year Kirkland is expected to shatter the Cravath bonus scale for 2010.