Allen & Overy to Cut U.S. Associate Bonuses in Half

Sofia Lind

Legal Week

December 18, 2008

Allen & Overy has announced its year-end bonuses for its U.S. associates, with lawyers pocketing up to $32,500 at the upper end.

The Magic Circle firm announced Tuesday that its U.S. lawyers would take home a bonus in the range of $17,500 to $32,500.

The rates represent a drop of around half compared to last year, when lawyers took home between $35,000 and $65,000 in a January payout. Associates were last year also handed a special bonus in December of $10,000 to $50,000, depending on seniority.

The move mirrors that of Magic Circle rival Clifford Chance which publicly announced earlier this month that it was cutting its bonuses in half to the same value as A&O's rates.

The majority of Wall Street firms this year have decided to halve their bonuses and scrap the additional bonuses paid out in last year's bonus war.

On Wednesday, Latham & Watkins became the first major law firm to announce that it is freezing associate pay for 2009 at 2008 levels. The firm is one of the most generous with newly-qualified lawyers netting 96,000 pounds ($145,000) in London, while their New York counterparts start at $160,000.

A&O declined to comment.

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