It was Cravath Swaine & Moore that set the bonus trend last year with special awards for associates. This year the firm may well be setting trends again – but for very different reasons.
After Skadden boldly matched its 2007 numbers but scrapped the special bonus structure (see story), Cravath has almost halved last year’s bonuses due to the economic downturn (see story).
Manhattan’s lawyers may be shocked to see Cravath offer bonuses lower than Skadden, but the firm’s presiding partner Evan Chesler defends the move.
“The world has changed, 2008 does not look anything like 2007 and our clients are dealing with complex financial issues,” says Chesler. “We need to respond to this as well as rewarding and compensating associates in the way they rightly expect and deserve.”
Slashing bonuses is rarely a good thing, at least in the eyes of your associates. But being cautious is wise while the economy continues to suffer, no matter what your competitors choose to do.
Cautious or not, two members of New York’s legal elite have taken very different paths this year over bonuses. Both have the potential to influence the rest of the pack.