Thomson Reuters reports that a number of large law firms are restraining the growth of their bonuses this year, giving the same dollar sums to employees that they granted in 2010. This is despite the fact that profits at law firms have grown considerably in 2011:
On Nov. 28, the New York-based law firm Cravath, Swaine & Moore told its staff that 2011 year-end bonuses would be almost identical to those for the previous two years. At the low end, first-year associates will receive $7,500, while seventh-year associates will get $37,500. Other firms quickly fell into line, as they have tended to do each year following Cravath’s announcement, which is traditionally the first of the bonus season [...] The only problem is that major law firms are actually making more money in 2011 than they did in 2010. [...] A survey released by the American Lawyer on Dec. 1 revealed that 84 percent of law firm leaders said that they expected profits per partner to rise next year.
The reason behind this stunning freeze in bonuses at elite law firms? Thomson Reuters quotes a lawyer at DLA Piper — an elite firm that “represented AIG, Lehman Brothers, and Merrill Lynch during the bank bailouts” — saying that the big law firms are “part of Wall Street” and that there’s a “sensitivity” around the issue of bonuses. Another lawyer at a New York firm quoted anonymously directly blames Occupy Wall Street for the restraint in bonus growth:
“I think there is a sensitivity there,” said Leroy Inskeep, head of the associate compensation committee at DLA Piper. “We’ve got clients who are struggling. They don’t want to see big bonuses.” Inskeep said big law firms are “part of Wall Street,” and that the Street’s reputation of excess extends to them as well as the investment banks. [...] “On the one hand, firms put out this image that they’re doing fine,” said a fifth-year associate at a New York law firm who requested anonymity because she was not authorized to speak for her firm. “On the other hand, we understand with Occupy Wall Street that the public isn’t going to look kindly on lawyers making big bonuses at the end of the year. It’s a calculated move.”
The fact that Occupy Wall Street and related protests are forcing some of the nation’s most prestigious law firms and corporate allies to restrain the bonuses they’ve doled out to employees is a huge victory for the 99 Percent. (HT: @atlblog)