By Nate Raymond
NEW YORK, Nov 26 (Reuters) - Cravath, Swaine & Moore kicked
off the associate bonus season on Monday by awarding its most
junior lawyers a 33 percent increase in year-end bonuses.
Cravath said it would pay its first-year associates $10,000,
a jump from the $7,500 it paid last year, according to a memo
obtained by Reuters. The firm's most senior associates will earn
$60,000, a $22,500 rise from 2011.
Managing partners at rival firms are now likely to examine
the details of Cravath's bonuses and decide how, or whether, to
raise their own associate bonuses.
Cravath over the years has evolved into a bellwether for
firms setting bonus amounts, often announcing their bonuses
first, with other firms following suit with matching amounts.
The Cravath bonuses exceed what the firm promised to pay
associates this time last year. But unlike 2011, when many Wall
Street law firms paid associates a spring bonus of $2,500 to
$20,000, Cravath did not pay one this spring.
The bonuses are still much lower than they were
pre-recession in 2007, when Cravath gave $45,000 to first-year
associates and $110,000 to senior associates in regular and
special bonuses. The firm's bonuses hit their lowest point in
2009, when they ranged from $7,500 to $30,000.
Over the last few years, Cravath and its peers have
gradually increased bonuses for senior associates while holding
down the amount they paid to junior associates.
While many firms have fewer associates than before the
recession, business has been improving, particularly at
high-profit Wall Street firms like Cravath.
A recent survey by a unit of Wells Fargo found that among
law firms with more than $2 million in profits per partner,
revenues were up 4.9 percent through the third quarter while net
income was up 7.9 percent compared to the same period in 2011.
Meanwhile, the job market for associates to land in-house
jobs or positions at other law firms has also improved, said
Karin Greene, a recruiter at Greene-Levin-Snyder in Manhattan.
"As often is the case, when firms want to stave off
attrition, it's usually reflected in the bonuses," she said.
Cravath's bonuses were first reported by The New York Times.
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