Cravath has announced its associate bonus structure for 2024, matching the total compensation offered by Milbank earlier this month and which we reported some days ago. The bonuses include both year-end and special payments, ranging from $21,000 for first-year associates to $140,000 for the most senior associates.
Cravath recently announced its latest partner intake and with a revised compensation structure we raised the question of how new partners would be compensated – and what the bonus scale might be for this year.
The bonus scale breaks down as follows:
- Class of 2024: $15,000 year-end + $6,000 special = $21,000 total
- Class of 2023: $20,000 year-end + $10,000 special = $30,000 total
- Class of 2022: $30,000 year-end + $15,000 special = $45,000 total
- Class of 2021: $57,500 year-end + $20,000 special = $77,500 total
- Class of 2020: $75,000 year-end + $25,000 special = $100,000 total
- Class of 2019: $90,000 year-end + $25,000 special = $115,000 total
- Class of 2018 and senior: $105,000 year-end + $25,000 special = $130,000 total[1]
Cravath’s announcement is significant as many large law firms typically wait for Cravath’s lead before setting their own bonus structures. The firm’s decision to match Milbank’s total compensation, including both year-end and special bonuses, may prompt other top-tier firms to follow suit[4].
Notably, Cravath’s bonuses will be paid without specific billable hours requirements, which is seen as a positive aspect for associates. The bonuses are scheduled to be distributed on December 13th in the New York and Washington D.C. offices, and on December 16th in London.
This move by Cravath continues the trend of competitive associate compensation in big law firms. Earlier this year, Milbank raised first-year associate salaries from $205,000 to $215,000, with proportional increases for more senior associates. Other firms like Davis Polk have also adjusted their compensation structures to remain competitive.
The legal industry is experiencing a highly competitive market for talent, leading firms to explore various compensation strategies. While some boutique firms like Hueston Hennigan and McKool Smith have taken the lead in announcing substantial summer bonuses, many larger firms have been more cautious in their approach.
As the bonus season unfolds, we will now look to see how other major law firms will respond to Cravath’s announcement.
Tom Borman’s piece on Cravath’s bonus structure for 2024 caught my eye, especially how it matches up with Milbank’s. It’s pretty intriguing, and I’m wondering how this plays out across the broader industry. Does anyone think other firms will follow suit, or is this a unique case of one-upmanship? Curious to hear thoughts!
It’s likely we’ll see others jumping on the bandwagon. The legal industry can be pretty reactive when it comes to compensation packages. This might set a new benchmark!
What’s the impact of these bonuses on work culture though? Wonder if it’s all beneficial or if there’s a downside.