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New York-based firms have gotten into the holiday spirit, rushing to hand associates fat across-the-board bonuses. But San Francisco Bay Area-based firms don’t seem to be in any rush to match them — at least, not yet. The bonus boom started in October, when Sullivan & Cromwell announced it would pay associates an interim bonus of $10,000 to $20,000. Last week, Sullivan threw in additional bonuses of $20,000 to $30,000. Simpson, Thacher & Bartlett came back with bonuses ranging from $30,000 for first-years on up to $60,000 for senior classes. Cravath, Swaine & Moore is also paying out bonuses between $30,000 and $50,000. Consultants say big bonuses reflect rising revenues as well as renewed worries about hanging on to talent. “I think the bonuses are strong, and it is a sign that firms are feeling confident about next year,” said Peter Zeughauser, a Newport Beach, Calif.-based consultant. “It is a sign they are optimistic about the future.” “For some of the smaller and mid-sized firms, this isn’t welcome news,” added Blane Prescott, a shareholder with Hildebrandt International in San Francisco. “There are certainly segments of the profession that aren’t doing as well. “What you are starting to see now is a segmentation. There is a top end of the market that competes with the biggest firms … and there are more firms that recognize they can’t afford to compete.” Prescott said California firms that compete with New York shops will be weighing their response. Morrison & Foerster’s Keith Wetmore said that his firm will take its time to decide compensation for its New York offices. “We will make our announcement after we get a good read on what other firms are doing,” he said. But he said New York firms have historically handled compensation differently than their California counterparts. Pillsbury Winthrop managing partner Marina Park also said the firm pays “market” in its New York office. But she added that other factors might be influencing the New York players in their decisions, including attrition at some of the firms, and she downplayed the effect the bonuses might have in California. At Latham & Watkins, firm leaders said they were watching but wouldn’t be making decisions until January. “The New York firms pay one flat amount for every associate in a given class,” said partner John Sherrell. In the past, Latham’s bonus methodology “has resulted in some members of our class earning substantially more than the numbers in New York.” Orrick, Herrington & Sutcliffe Chairman Ralph Baxter Jr. said bonuses there are based on individual performance and can range to $50,000 for junior lawyers, and as high as $75,000 for senior associates. California firm leaders say they don’t see the bonus moves in New York as a sign that associate compensation is set to explode as it did in 2000, when Palo Alto, Calif.-based Gunderson Dettmer Stough Villeneuve Franklin & Hachigian raised first-years’ to $135,000. But some acknowledged that the New York firms now employ — and pay bonuses to — lots of lawyers in Bay Area offices. “It’s interesting, but it won’t drive the result for us,” said Mark Pitchford, of Cooley Godward. As for that Palo Alto firm that turned New York heads five year ago, its eyes are elsewhere. “Wilson is the 200-pound gorilla in this market,” said Gunderson’s Steven Franklin.

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