Most Bonuses Tracked Davis Polk’s: Business of LawEllen Rosen
It began in almost stealth fashion. Simpson Thacher & Bartlett LLP, just before Thanksgiving, surprised the legal market by announcing its associate bonuses.
While in some years the first firm becomes the standard-bearer, Davis Polk & Wardwell LLP in 2014 upped the amounts for more senior associates by as much as $10,000 and caused a flurry of activity as other firms quickly began to follow the new market leader.
In December, firms including Cleary, Gottlieb, Steen & Hamilton LLP, Cravath, Swaine & Moore LLP, Milbank, Tweed, Hadley & McCloy LLP and Stroock & Stroock & Lavan LLP met the new going rate. Even Simpson Thacher ultimately raised its bonuses to match Davis Polk. As a result, at many firms bonuses ranged from $15,000 for the most junior associates to $100,000 for the most senior.
There were, as is often the case, a few outliers. Boies Schiller & Flexner LLP awarded outsize bonuses as it has in past years, while Cahill Gordon & Reindel LLP and Kirkland & Ellis LLP topped the market as well.
Some firms stuck to their own traditions and will wait to announce until January or even February, as they do every year. DLA Piper LLP, Latham & Watkins LLP and Wilmer Cutler Pickering Hale & Dorr LLP, for example, typically wait until after Jan. 1.
One interesting aspect of this year’s announcements was the continued reliance on hours billed. While some firms, like Simpson Thacher, Cadwalader, Wickersham & Taft LLP and Shearman & Sterling LLP didn’t quantify a minimum number of hours billed, other firms set a floor and adjusted bonuses depending on hours billed. Those requirements typically allow pro bono work to be included in an associate’s total.
Associates at Kaye Scholer LLP who billed 2,000 hours or more, for example, received the going rate, but those exceeding 2,400 hours received an “extraordinary” bonus of $10,000 to $20,000 more depending on seniority (the hours in both tiers included pro bono and firm “citizenship” work, according to a memo from the firm).
Gibson, Dunn & Crutcher LLP, according to the blog Above the Law, had several rounds of announcements as it incrementally increased its levels depending on associate location. Ultimately, the firm matched the going rate for associates no matter where they’re located. Emily Carhart, a spokeswoman for the firm, didn’t return a call seeking comment.
This year’s bonuses exceeded last year’s amounts, when they ranged from $10,000 for young associates to $60,000 for the most senior associates. In awarding the bigger bonuses, many of the firms acknowledged, even before the final numbers are in, that 2014 was a good year for many.
Not surprisingly, it was transactional work that largely bolstered revenues. The robust deal market was, according to Dan DiPietro, the chairman of the Citi Private Bank Law Firm Group, “the single largest driver of this year’s performance.”
Verso Paper Must Divest Two Mills to Proceed With NewPage Deal
Verso Paper Corp., an unprofitable paper maker controlled by Apollo Global Management LLC, must sell two mills to proceed with a planned acquisition of NewPage Holdings Inc., the U.S. Justice Department said.
The mills are in Rumford, Maine, and Biron, Wisconsin, and have a combined production capacity of about 940,0000 tons, the Justice Department said Dec. 31 in a statement. The divestitures resolve a civil lawsuit filed by the department’s antitrust division Dec. 31.
NewPage announced the sale of the mills to Catalyst Paper Corp. in October.
Verso, which is based in Memphis, faces declining demand for its coated paper used in magazines amid the rising popularity of tablet computers and e-readers. It agreed Jan. 6 to acquire its less-indebted rival to avoid a debt restructuring that may have wiped out shareholders. The takeover is valued at about $1.4 billion including debt.
Without the divestitures, the deal would have risked higher paper prices in the U.S. and Canada, the Justice Department said. For example, Verso and NewPage would have had about 70 percent of the market for coated label paper in the two countries.
“Today’s proposed settlement will ensure that consumers benefit from continuing competition in the sale of coated paper,” Assistant Attorney General William J. Baer, who heads the antitrust division, said in the statement.