Top law firms have begun slashing bonuses for their associates, citing the troubled economy and financial conditions.
On Monday, Davis Polk & Wardwell told its staff that 2008 associate bonuses would range from $17,500 to $32,500, AmLaw Daily reports. New York-based Davis Polk & Wardwell ranked 16th among the world's law firms in merger and acquisition advisory volume in 2007, down from ninth in 2006.
The new bonus figures, which range according to seniority, are exactly 50 percent below the "regular" bonuses that Davis Polk paid its associates a year ago. The reductions actually are greater than 50 percent, because in addition to their regular 2007 payouts, associates at Davis Polk and a few other top firms also received "special" bonuses of $10,000 to $50,000 last year, AmLaw Daily says. The special bonuses aren't being awarded for 2008.
The publication estimates that the reduction will shave $13 million or about 3 percent from Davis Polk's total expenses.
A week earlier, Simpson Thacher & Bartlett informed its staff of identical reductions in bonuses for this year. Simpson Thacher was the world leader among law firms advising private equity mergers and acquisitions in 2007, and ranked sixth in overall M&A advisory volume.