Lawyers

Why Are Law Firm Bonuses Flatlining?
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

 

Kirkland & Ellis’ 2014 bonuses were some of the highest paid to associates in law firms across the country.

Summary: Law firms are likely not to increase year end bonuses this year for junior attorneys.

  
What
Where


Elite New York law firm Cravath, Swaine & Moore LLP decided to be a Scrooge this holiday season. The firm told its junior lawyers on Monday that none of them would be getting bonuses larger than last year’s.

Law firms’ year-end bonuses are seen as an indicator of the industry’s success, and this year has been one of financial troubles. The Wall Street Journal wrote that the flatlining is a sign that law firms are “cautious about where the economy is heading” and that other firms are likely to copy the lead of Cravath, Swaine & Moore LLP.

Cravath’s range of payouts goes from less than $15,000 to $100,000 for those who have been vested for seven years or more. (For a detailed breakdown, see our coverage here.) WSJ predicts that in future weeks the firm’s peers will be matching those amounts.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




Base salaries at big law firms have been static since 2007 at the rate of $160,000. Bonuses thus become the primary source of discretionary income for associates, those who crank at all the billable hours for clients that the partners and senior lawyers bring into the company.

During the recessions, bonuses dipped. Senior associates were getting approximately $35,000, a sum that some Americans make in a year, but that felt low for lawyers who were billing thousands of hours a year. Bonuses have since risen from that rate.



Two firms, Milbank, Tweed, Hadley & McCloy LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP, followed Cravath’s lead. On Monday, their chairmen told their associates that they would receive the scale set by Cravath.

It’s noted though that the Cravath industry scale could change if another major law firm announces a different bonus scale. Last year, law firms scrambled to increase their bonuses set by the scale of Simpson Thacher & Bartlett LLP after Davis Polk & Wardwell LLP paid out higher figures.

Cravath has 430 associates and plans to pay bonuses on Dec. 18. It has been involved in numerous large scale deals this years and won litigation cases. For instance, they represented Anheuser-Busch InBev when it acquired SABMiller for $107 billion, and they represented 3G Capital Partners and H.J. Heinz Co. in Heinz’s $60 billion merger with Kraft. They won litigation suits for clients such as ESPN and ABC.

Source: http://www.wsj.com/articles/bonuses-at-law-firms-likely-to-remain-flat-1449535627 

Source: https://www.jdjournal.com/2015/12/08/end-of-year-bonus-time-at-cravath-swaine-and-moore/



 

Interesting Legal Sites You May Like


BCG FEATURED JOB

Locations:

Keyword:



Search Now

Litigation/Law and Motion Associate Attorney

USA-CA-Woodland Hills

Woodland Hills office of our client seeks litigation/law and motion associate attorney with preferab...

Apply Now

Commercial Litigation Associate Attorney

USA-CA-Redwood City

Redwood City office of our client seeks commercial litigation associate attorney with 3-5 years of e...

Apply Now

Immigration Law Associate Attorney

USA-OH-Columbus

Columbus office of our client seeks immigration law associate attorney with 3+ years of experience. ...

Apply Now

RELEVANT JOBS

Lawyer for discrimination / profiling of guests in hospitality industry

USA-FL-Boca Raton

Research, write memorandum and complaint, motions, discovery, negotiations, possible courtroom work....

Apply now

Employment Law Associate – Los Angeles

USA-CA-Los Angeles

The Los Angeles office of our company is seeking an associate attorney to join the Employment Group....

Apply now

Commercial Leasing Associate Attorney

USA-NY-New York City

What we do: Tarter Krinsky & Drogin’s full-service Commercial Leasing Group represents landlo...

Apply now

Senior Litigation Attorney

USA-CA-Costa Mesa

We are a well-established full service Orange County litigation and transactional law firm specializ...

Apply now

SEARCH IN ARCHIVE

To Top