Everyone in the legal industry has been on edge since Milbank upped the ante this summer by hiking associate salaries by $10,000 to $20,000, based on seniority. The new salary structure, effective from July 1, has first-year associates earning $235,000, scaling up to $455,000 for senior associates. It's been over 12 weeks since that bold move, and while a few firms have followed suit, most of Biglaw seems to be holding its breath, waiting for Cravath's next move.

Typically, industry insiders expected Biglaw firms to adjust their salary scales post-Labor Day, after partners and decision-makers returned from summer breaks. However, Cravath's silence has been deafening, leading some to speculate that this delay is not just a matter of timing but a strategic decision.

When Milbank announced additional special bonuses ranging from $6,000 to $25,000 for associates on July 27, payable by the end of August, it added more pressure. Milbank associates will soon enjoy both a salary increase and a bonus, while their peers elsewhere watch and wait.

The theory now emerging is that Cravath might be orchestrating a grand reveal during the year-end bonus season. History shows that Cravath has previously waited to announce its compensation adjustments until it can roll out a comprehensive package that includes both bonuses and salary increases. Last year, Milbank issued summer bonuses in August, but Cravath didn't match these until it announced its year-end bonuses in November, setting a precedent that other firms quickly followed.

If Cravath chooses to wait until the end of the year, they could announce new salaries effective January 1, 2027. This timing would allow them to sidestep the immediate financial strain of higher salaries and retroactive payments, a tactic already adopted by at least two other firms according to Above the Law.

Such a move could disappoint associates who will miss out on immediate financial benefits but would strategically position Cravath as maintaining its role as a market leader, potentially adding even more lucrative incentives than Milbank's current offerings.

This waiting game could also be a test of nerve for other leading firms. Will any break ranks to match Milbank's raise now, gaining a competitive edge in associate satisfaction and talent acquisition, or will they too wait for Cravath's cue?

What unfolds next could redefine compensation dynamics in Biglaw. But for now, as the summer wanes, all eyes remain fixed on Cravath, whose next move could precipitate a cascade of salary adjustments across the industry. If no significant changes occur post-Labor Day, associates might have a longer wait ahead than anticipated.