2021 End of Year Bonuses Forum

[Anonymous User]

I'm sorry but "bonus is minimum wage" is pretty dumb math. Only makes sense if without bonus you'd bill nothing. As a motivation to bill another 100-200 hours to get 10-20k, that's 100 an hour about. (not to mention that it's on top of salary and part of what you budget for, etc etc)

Anon above you. Generally agree but I think there are cases where juniors bill an extra 200+ hours for $5K or so, in which case it’s coming close to minimum wage in high COL areas. I think ATL had an article about this calling out Kirkland a few years back.

Anon you're quoting.

First 5000/200=25, which is not minimum wage anywhere.

It would be 5,000 / 200 * 50 % marginal tax rate (maybe closer to 45 for juniors but you get the point) = $12.50 per billable hr.

For comparison a first year in 2020 who hit bonus would have $212,500 ($135,331 after tax) / 2000 = $67.66 per billable hr.
For comparison a first year in 2015 who hit bonus would have $175,000 ($114,288 after tax) / 2000 = $57 per billable hr.
For comparison a fifth year in 2020 who hit bonus would have $392,500 ($229,059 after tax) / 2000 = $114 per billable hr.

And I think we can all agree we work / are stressed about work way more hours than we bill

[Wanderingdrock]

Do you guys ever feel like there are diminishing returns to more money? Even beyond just the general proposition that there are diminishing returns to everything, there's also taxes. Most midlevels and seniors are in high tax brackets; my marginal rate is nearly 50% once you add state/local/medicare/etc on top of it. Makes throwing more money at me to make me work harder a difficult proposition. Like ok yay, $100k bonus, but I only get to keep $50kish of it. Very inefficient motivator.

I'd rather bill 1700 hrs for $350k than 2000 for $500k, even though that's like literally $500/hr once you think about it.

There are definitely diminishing returns to money and anyone who doesn't think so is broken inside. The more you work, the more each morsel of your free time is worth.

Compared to $500k for 2000, I probably wouldn't take $350k for 1700. But I'd absolutely take $400k.

I'd also take a big pay cut for a fully remote job compared to five days in the office. Maybe even up to like 25%, depending on commute and tax savings.

Agree 100%. I also was once told that if you start doing the math, and look into how much per hour you actually get from obtaining a bonus, it's somewhere around minimum wage per hour (at least at the junior levels).

Different story when you start getting bonuses at like 100k, but your first three years, I wouldn't care about the bonus at all.

As others have pointed out, this is a completely fallacious way of thinking. You're only getting low hourly wage numbers if you divide the bonus by the total hours you worked. But that doesn't make any sense because if your bonus target is 2000, getting the bonus vs. not getting the bonus isn't the difference between 2000 hours and 0 hours, it's the difference between, like, 2100 hours and the 1800 hours you would have billed if you'd just chilled that year. Even at a junior level before special bonuses started getting issued, $15,000 / 300 = $50 / hour. That's appreciably less than the $205,000 / 1800 = $114 / hour you were making on those first 1800 hours, but it's still excellent money. And at more senior levels it gets pretty crazy!

[Anonymous User]

Breaking news, Hot off the presses: STB offering certain group mid levels a $50k retention bonus if they stay until next October and certain associates are getting performance bonuses ~$20k paid out mid November. Discuss.

[Anonymous User]

Breaking news, Hot off the presses: STB offering certain group mid levels a $50k retention bonus if they stay until next October and certain associates are getting performance bonuses ~$20k paid out mid November. Discuss.

For next year? That sounds too far out for retention purposes.

[Anonymous User]

Breaking news, Hot off the presses: STB offering certain group mid levels a $50k retention bonus if they stay until next October and certain associates are getting performance bonuses ~$20k paid out mid November. Discuss.

For next year? That sounds too far out for retention purposes.

That’s what certain associates were told. It does fit, stay till next here here’s more money.

[Anonymous User]

Breaking news, Hot off the presses: STB offering certain group mid levels a $50k retention bonus if they stay until next October and certain associates are getting performance bonuses ~$20k paid out mid November. Discuss.

This seems so cheap. It’s like they know the market is heading this way and they want to be a first mover and set the bar on the Walmart-level cheap side.

[Anonymous User]

Breaking news, Hot off the presses: STB offering certain group mid levels a $50k retention bonus if they stay until next October and certain associates are getting performance bonuses ~$20k paid out mid November. Discuss.

This seems so cheap. It’s like they know the market is heading this way and they want to be a first mover and set the bar on the Walmart-level cheap side.

Apparently communicated over the phone as well to discourage sharing. “Not everyone is receiving one or both bonuses.”

[Anonymous User]

Breaking news, Hot off the presses: STB offering certain group mid levels a $50k retention bonus if they stay until next October and certain associates are getting performance bonuses ~$20k paid out mid November. Discuss.

Literally half of what Skadden offered for the same arrangement (which was also about a year-out in terms of getting paid). Ouch. Maybe they're going more broadly than Skadden did in terms of practice groups etc?

[Anonymous User]

Breaking news, Hot off the presses: STB offering certain group mid levels a $50k retention bonus if they stay until next October and certain associates are getting performance bonuses ~$20k paid out mid November. Discuss.

Literally half of what Skadden offered for the same arrangement (which was also about a year-out in terms of getting paid). Ouch. Maybe they're going more broadly than Skadden did in terms of practice groups etc?

Yep, this is pathetic... a paltry $50k bonus to retain a midlevel for nearly a year is actually laughable. The mid-November performance bonuses are interesting but ultimately pointless given how soon the EOY bonuses will be paid out, and I'm not sure why STB wouldn't just lump the performance bonuses in with the retention bonuses.

[Anonymous User]

I haven’t worked as hard as the corporate folks this year but it sucks that firms are going to a “only exceptionally busy groups get extra money” model as soon as my group (lit) isn’t one of them. I assume the STB certain groups are the white hot transactional ones.

[Anonymous User]

You are dense (or you are still a law student).

The difference between 2200 hours and 2500 hours seems like a lot from the outside, but it is 42.3 hours a week vs 48 hours a week. If I knew in advance that 5.5 hrs a week was going to be important, sad to say that I could “find” those hours without anyone knowing or caring - I just don’t because I’m ethical and I’m not currently rewarded for it.

Possibly the worst thing I have read all week and clearly you have never worked a 2500 pace. 2200 is bearable. 2500 pushes you to an extreme no human being should have to suffer for any extended period of time.

Agree. I know the discussion is pages more argument at this point but I had a similar immediate reaction when I read that; I'm at a V10 and I don't know many people here would would regard the difference between 2200 and 2500 as "no big deal" as the first post implies. 300 additional billable hours in a year is a huge deal and represents a huge hit on quality of life.

[Anonymous User]

Why do I have the sneaking suspicion that the firms doing these weird one off / ad hoc bonuses just a month or two before we're supposed to get the year-end bonus are just doing it to "divide and conquer" and avoid paying out an across the board EoY bonus commensurate with their outrageous profitability? Maybe I'm just cynical ....

[TigerIsBack]

Yes, let's get back to analyzing the expected bonus scale rather than the merits of calculating our pay on an hourly basis.

Do we think someone will come in to set the scale this week?

[Ultramar vistas]

Agree with the above posters that this is a pretty naked and weak attempt to pre-empt the market with a Walmart level bonus offer, and also to split the market by keeping things non-transparent.

Let’s be real though, Cravath, Cleary or SullCrom are (a) never going to have discriminatory bonuses between practice groups and (b) aren’t going to resort to “secret” bonuses. Paul Weiss, Skadden and Simpson are ultimately going to have to either match or fall behind, and it’s going to be complicated as hell.

[Anonymous User]

STB associate; while possible these are being offered, across like 20 of us that have discussed, none of us across groups and offices have been offered or know someone offered. If this is being offered, seems like its a really really slim % of associates and if anything speaks to STB being stingy but possible more to come.

[cornerstone]

STB associate; while possible these are being offered, across like 20 of us that have discussed, none of us across groups and offices have been offered or know someone offered. If this is being offered, seems like its a really really slim % of associates and if anything speaks to STB being stingy but possible more to come.

If true this is even worse. Nothing kills morale more like being slammed and learning you won't get a reward you had hoped you'd get. Shame on STB.

[NoLongerALurker]

Agree with the above posters that this is a pretty naked and weak attempt to pre-empt the market with a Walmart level bonus offer, and also to split the market by keeping things non-transparent.

Let’s be real though, Cravath, Cleary or SullCrom are (a) never going to have discriminatory bonuses between practice groups and (b) aren’t going to resort to “secret” bonuses. Paul Weiss, Skadden and Simpson are ultimately going to have to either match or fall behind, and it’s going to be complicated as hell.

Yeah, like is PW/Skadden/Simpson going to be like "ok, everyone is getting the market bonus, but M&A is getting a haircut of 30% on the year end bonus because it's already covered by the special bonus which is now no longer actually a special bonus" or some sort of shenanigans like that? Doubtful but who knows.

[Anonymous User]

STB associate; while possible these are being offered, across like 20 of us that have discussed, none of us across groups and offices have been offered or know someone offered. If this is being offered, seems like its a really really slim % of associates and if anything speaks to STB being stingy but possible more to come.

If true this is even worse. Nothing kills morale more like being slammed and learning you won't get a reward you had hoped you'd get. Shame on STB.

STB associate here. Only 1 group has multiple associates confirming the cheap retention bonus. It’s a corp group that has been exceptionally busy even by STB standards.

[Anonymous User]

STB associate; while possible these are being offered, across like 20 of us that have discussed, none of us across groups and offices have been offered or know someone offered. If this is being offered, seems like its a really really slim % of associates and if anything speaks to STB being stingy but possible more to come.

If true this is even worse. Nothing kills morale more like being slammed and learning you won't get a reward you had hoped you'd get. Shame on STB.

STB associate here. Only 1 group has multiple associates confirming the cheap retention bonus. It’s a corp group that has been exceptionally busy even by STB standards.

If this is true, its a morale killer. Is it M&A or CapM? None of the other groups will be happy, its been a bad year all around and 20/50k is hardly special and worth giving to only the highest of high billers in certain groups.

[Lesion of Doom]

I can't see 50k moving the needle for midlevels being bled out for another year, especially if signing bonuses continue to be a thing.

But I do think 50k would be enticing for the 2020s who will be quitting en masse next year.

[Anonymous User]

STB associate; while possible these are being offered, across like 20 of us that have discussed, none of us across groups and offices have been offered or know someone offered. If this is being offered, seems like its a really really slim % of associates and if anything speaks to STB being stingy but possible more to come.

If true this is even worse. Nothing kills morale more like being slammed and learning you won't get a reward you had hoped you'd get. Shame on STB.

STB associate here. Only 1 group has multiple associates confirming the cheap retention bonus. It’s a corp group that has been exceptionally busy even by STB standards.

If this is true, its a morale killer. Is it M&A or CapM? None of the other groups will be happy, its been a bad year all around and 20/50k is hardly special and worth giving to only the highest of high billers in certain groups.

Different anon. Friend at STB said someone in Funds mentioned this today. Doesn’t seem to be M/A or CapM.

[Anonymous User]

Latham making a move to be the new market leader and to increase associate morale with its special bonus - a water bottle and a laptop sleeve.

[BrowsingTLS]

I can't see 50k moving the needle for midlevels being bled out for another year, especially if signing bonuses continue to be a thing.

But I do think 50k would be enticing for the 2020s who will be quitting en masse next year.

I'm at PW and K&E paid one of our second years over 100K as a sign-on bonus to jump ship. So you're right. 50K to keep people for another year is a joke.

[Anonymous User]

STB associate; while possible these are being offered, across like 20 of us that have discussed, none of us across groups and offices have been offered or know someone offered. If this is being offered, seems like its a really really slim % of associates and if anything speaks to STB being stingy but possible more to come.

If true this is even worse. Nothing kills morale more like being slammed and learning you won't get a reward you had hoped you'd get. Shame on STB.

STB associate here. Only 1 group has multiple associates confirming the cheap retention bonus. It’s a corp group that has been exceptionally busy even by STB standards.

If this is true, its a morale killer. Is it M&A or CapM? None of the other groups will be happy, its been a bad year all around and 20/50k is hardly special and worth giving to only the highest of high billers in certain groups.

Different anon. Friend at STB said someone in Funds mentioned this today. Doesn’t seem to be M/A or CapM.

Since it's out here in the semi-open, I'll tell the full story. STB Funds did secret special bonuses (no email trail, just a phone call from a senior partner and then a direct deposit) in August before the Skadden bonuses were announced, although the way it was framed, it was unclear if it was universal or merit-based, and maybe only above a certain seniority level, and no one really talked about it. My view on it is that it was done in response to an attempted poaching of a couple of particularly well-regarded senior associates by K&E. I assume that's what's being discussed here. STB Funds has done this in the past also on a merit basis, but does so out of a set pot of money the group has to play with generally without firm-wide approval so they have limited ability to really make it rain.

[Anonymous User]

Call me crazy but if firms want to retain seniors so badly why don't they just....make them partner? Feels like something has seriously broken down in the system, where we have firms where it takes a dozen years or more to make equity, yet firms are desperately short of experienced associates.