Wall Street’s meltdown is snagging the city’s elite law firms. Long viewed as recessionproof—as busy with bankruptcies in bad times as with M&A work in good—this time they’re cutting back on year-end bonuses (paid on top of salaries starting at $160,000 for new lawyers). Skadden was the first to announce this year’s take, preserving “regular” bonuses, ranging from roughly $35,000 to $60,000, but eliminating “special” bonuses, which last year ran from $10,000 to $50,000. Skadden lawyers were okay with that—“There’s nothing special about this economy,” one says—but the next day, white-shoe Cravath had worse news. Not only did it eliminate special bonuses, it also cut regular bonuses down to $17,500 to $30,000. Since then, at least five other major firms have followed Cravath’s lead. The lawyers aren’t happy, but there’s not much they can do. “Having a paycheck next year is a bonus,” says a Simpson Thacher associate.
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