Davis Polk & Wardwell, Simpson Thacher & Bartlett and Wilkie Farr & Gallagher have made an abrupt about-face about reducing end-of-year bonus payments for associates.
They have been forced to reconsider as competitors offered their associates twice that of the three New York firms. The most dramatic change will benefit associates at Slaughter and May's best friend Davis Polk. In October, The Lawyer reported the firm's decision not to conclude 2001 with bonus payments. However, a memo circulated to all associates in December reversed the earlier decision. It stated: "We are aware of developments in associate compensation. In light of these and other developments, and to properly recognise your talent, effort and spirit, we are pleased to announce supplemental payments." Davis Polk's bonuses now mirror the $20,000-$50,000 (£13,900-£34,700) range of Cravath Swaine & Moore, which was announced in November. The figure was matched among Wall Street's giants Cadwalader Wickersham & Taft, Clifford Chance Rogers & Wells and Weil Gotshal & Manges. Cadwalader and Weil Gotshal also announced bonuses of up to $60,000 (£41,700) for senior associates. Associates at Simpson Thacher and Wilkie Farr also received a surprise boost at the end of the year. Both firms doubled their previously announced bonuses to equal Cravath's bonuses. On 31 December 2001, Wilkie Farr chairman Jack Nusbaum said in a memo to associates: "In this year of unusual differentiation for associate compensation among the New York firms, we are pleased to be in a position to offer our associates overall compensation that equals or exceeds the compensation of other top tier New York firms." Simpson Thacher offered no explanation for its change of heart. According to a memo at the beginning of December, the original decision had been based in part on the unpromising economic outlook for 2002. Although bonus payments for the end of 2001 have shown a marked drop from the extraordinary amounts issued in 2000, few firms have bucked the bonus trend completely. Just below the leading pack, Mayer Brown & Platt associates in New York will receive $15,000-$45,000 (£10,400-£31,300), depending on performance and seniority. Milbank Tweed Hadley & McCloy's range runs from $17,500-$35,000 (£12,200-£24,300). White & Case associates have to bill at least 2,000 hours to guarantee a $10,000 (£6,900) bonus. Beyond that, the firm's bonus scale is $15,000-$35,000 (£10,400-£24,300).