Editor's Note: On 11/22, Cravath announced bonuses for 2021 (the announcement from Cravath typically comes after the partnership's weekly lunch meeting as described below). Here's the Cravath memo.

Biglaw has no official definition but loosely refers to the nation’s largest law firms by headcount, smaller firms that pay at the market rate or medium-sized firms with international reach. Most Biglaw firms are located in the major U.S. cities. Lawyers working in Biglaw are generally paid on the Cravath scale, which is a system of lockstep associate compensation based on the number of years out of law school and paid to New York lawyers working at Cravath. Not only are all lawyers on this pay scale paid the same, they can generally expect to receive the same market bonus each year.

It’s called the Cravath scale because it’s an offshoot of the Cravath system and because Cravath, Swaine & Moore LLP is generally considered the trendsetter when it comes to associate salaries (despite the fact that other firms, such as Milbank and Simpson Thacher have been the first movers on first-year associate salaries in the past few years). Given the lockstep nature, associates and law students (as well as their in-house peers) tend to follow any changes to the Biglaw salary scale closely.

The Cravath scale has largely stayed the same across the major law firms because those firms are competing for the best law students from the best law schools. If one firm offers a higher salary, historically the other firms tend to announce salary increases shortly thereafter. The above tables show the current Biglaw salary scale, as well historical changes in associate compensation and a comparison of the historical Biglaw associate salaries with the current Cravath scale on an inflation-adjusted basis.

Which other law firm markets pay the Cravath scale?

In the past, the Biglaw salary scale has been set out of the New York city offices of major firms like Jones Day, Skadden, etc. Initially, these starting salaries were not paid to associates working in “secondary” markets such as Los Angeles, Chicago or Houston. Over time, however, the distribution of the Cravath scale has been such that most first-year associates at large national firms can expect their base salary to be the same as other first-year associates in local offices in the United States.

The biggest changes in the pay scale over the past two years have been relative to mid-level and senior associate salaries. As firms struggle to retain mid-level and senior associate talent, firms have increased those salaries disproportionately (i.e. more) than they’ve increased starting salaries for first-year associates.

What is the Biglaw bonus scale?

In addition to receiving standardized salaries across the industry, associates working in Biglaw can expect to receive the same annual bonuses and summer bonuses as their peers based on the market bonuses set by the leading firms. Bonus eligibility is a function of meeting certain billable hour targets at your firm (although not all firms require a minimum billable hour threshold).

The Biglaw bonuses from 1999 to the present year are included in the chart above. The chart does not include clerkship bonus amounts as I have yet to compile that information (but send an email if you want to see it).

How are Cravath bonuses set each year?

Typically, in late November or early December, a Biglaw firm will announce its year-end bonuses via a memo delivered to associates. In most years, the first firm to make the announcement is Cravath, Swaine & Moore LLP, but that isn’t always the case.

If you’re wondering when the bonus announcement is made (or will be made in the future), the partners at Cravath have a standing weekly meeting on Monday during lunch. This means that Cravath’s bonus announcement is almost always on Monday afternoon at the conclusion of the weekly meeting. Soon after the Cravath bonus memo is released, you can expect to see it posted on a legal news website like Above the Law, the New York Law Journal or American Lawyer.

Regardless of which large law firm makes the first announcement regarding associate bonuses for a given year, there is typically some suspense over whether other firms will match the bonus scale or potentially offer more money (i.e. bonus season!). In the rare event that a law firm either announces before Cravath or announces a bonus scale that is higher than Cravath, the firms typically quickly consolidate around the top of the market to set the Biglaw bonus scale for that year.

This is true except for a few outlier firms (e.g. last year Susman Godfrey paid six-figure bonuses to associates, as it has done in previous years). The outlier firms tend to be litigation boutique firms with extraordinary years and so fall outside the typical Wall Street firm construct.