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Elite Law Firms Lift Bonuses
From the Wall Street Journal of Fri, 21 Nov 2014 18:56:00 EST
Simpson Thacher staff at the company’s 425 Lexington Ave. office learned on Friday of plans for higher year-end bonuses.
Simpson Thacher staff at the company’s 425 Lexington Ave. office learned on Friday of plans for higher year-end bonuses. Andrew Hinderaker for The Wall Street Journal

Three elite New York law firms will raise their year-end bonuses to associate attorneys by as much as $40,000, reflecting in part this year’s resurgence in lucrative mergers-and-acquisitions work.

Managements at Simpson Thacher & Bartlett LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Cleary Gottlieb Steen & Hamilton LLP disclosed on Friday they would cut checks of between $15,000 and $100,000 next month for associate attorneys depending on their seniority. Lawyers who have been with the firms seven or more years would make the most.

In 2013, bonuses paid by each firm were $10,000 to $60,000, respectively. The pay comes on top of annual salaries that range from $160,000 for first-year associates to nearly $300,000 for the senior-most associates. Associates are the salaried, typically younger lawyers that support a firm’s partners.

“We recognize that you have been working incredibly hard and have all contributed to the Firm’s extraordinary success this year,” wrote William Dougherty, the chair of Simpson’s executive committee, in a memo to staff.

Paul Weiss and Cleary Gottlieb issued similar memos Friday afternoon.

The development represented a departure in the way associate bonuses at big law firms have been unveiled in recent years. Another New York firm, Cravath, Swaine & Moore LLP, has typically been the first to announce its figures, usually shortly after Thanksgiving. Other large firms tended to “match” the Cravath numbers. A spokeswoman for Cravath didn’t respond to a request for comment.

This time, it was Simpson Thacher leading the way. The 850-lawyer firm with a deep roster of blue-chip financial-industry clients has handled deals totaling $412 billion in the year to date, according to Dealogic.

The firm is advising Dollar General Corp. in its $9.1 billion hostile bid to buy Family Dollar Stores Inc., and TRW Automotive Holdings Corp. in a $11.7 billion takeover by a rival.

It ranks third overall in total deal value, behind only Cleary Gottlieb and Skadden, Arps, Slate, Meagher & Flom LLP.

For years, the 900-lawyer Paul Weiss has been regarded as one of the nation’s preeminent litigation firms, with clients that includes JPMorgan Chase & Co., Citigroup Inc., and the National Football League.

The firm has also bolstered its transactional practice in recent years, and has handled high-profile deals in recent years. Earlier in 2014, Paul Weiss represented Time Warner Cable Inc. in its proposed $45.2 billion merger with Comcast Corp.

“As deal work has bounced back in 2014, we’ve seen a dramatic increase in demand for the services of Simpson Thacher and its peer firms,” said legal consultant Kent Zimmermann.

Through the first nine months of 2014, merger-and-acquisition volume was up 39% globally, according to Dealogic, putting 2014 on track to be the second biggest year on record, behind only 2007.

Consultant Peter Zeughauser said that while the boom in M&A would likely make for good years for other top New York firms, the legal industry across the country was faring better than in the years following the financial meltdown of 2008. “For the first time in six years, the legal economy is back on track,” he said.

—Liz Hoffman contributed to this article.

Write to Ashby Jones at

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