Mid-Year Bonuses Forum

[hdr]

Goodwin has told people they plan to pay "market" bonuses for people hitting their billable reqs. So just depends on what "market" turns out to be.

I think firms at the top of the PPP ladder will hand out market bonuses (same as last year). Most firms who cannot compete will give little to nothing.

Cravath cut bonuses by 50 percent in 2008 and it took several years for bonus levels to be restored. https://www.abajournal.com/news/article ... ld_be_zero

No one should expect last year's bonus levels to hold.

[Joachim2017]

Goodwin has told people they plan to pay "market" bonuses for people hitting their billable reqs. So just depends on what "market" turns out to be.

I think firms at the top of the PPP ladder will hand out market bonuses (same as last year). Most firms who cannot compete will give little to nothing.

Cravath cut bonuses by 50 percent in 2008 and it took several years for bonus levels to be restored. https://www.abajournal.com/news/article ... ld_be_zero

No one should expect last year's bonus levels to hold.

Yeah, it would be very crappy of the top firms not to give the same bonus as last year if many of their associates are working just as hard, under much worse conditions. It's one thing if the firms' finances are terrible and they truly can't afford it; it's another for partners to just hold on to their own compensation levels from last year and, to do so, cut off associate comp. And keep in mind, it's not just bankruptcy/restructuring associates who are working hard these days.

I expect Cravath, DPW, and other top firms to give at least some bonus, if not market from last year. Also, we still have half a year to go...

[Sackboy]

Yeah, it would be very crappy of the top firms not to give the same bonus as last year if many of their associates are working just as hard, under much worse conditions. It's one thing if the firms' finances are terrible and they truly can't afford it; it's another for partners to just hold on to their own compensation levels from last year and, to do so, cut off associate comp. And keep in mind, it's not just bankruptcy/restructuring associates who are working hard these days.

I expect Cravath, DPW, and other top firms to give at least some bonus, if not market from last year. Also, we still have half a year to go...

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

[Joachim2017]

Yeah, it would be very crappy of the top firms not to give the same bonus as last year if many of their associates are working just as hard, under much worse conditions. It's one thing if the firms' finances are terrible and they truly can't afford it; it's another for partners to just hold on to their own compensation levels from last year and, to do so, cut off associate comp. And keep in mind, it's not just bankruptcy/restructuring associates who are working hard these days.

I expect Cravath, DPW, and other top firms to give at least some bonus, if not market from last year. Also, we still have half a year to go...

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

No, lots of partners are actually just very senior associates billed out at higher rates. And at least some associates effectively run cases, interacting with clients often and directly, to the point that they are the ones who keep the trains running. OBVIOUSLY it's true that firms must "strike a good balance." No one's saying this is the year for raises. But if top firms who are doing well financially make senior associates less-than-whole for long hours under difficult circumstances, there's a good chance their businesses will be disrupted and their reputations will take a hit. People still remember how firms acted during the last recession, and make choices accordingly (at the top schools, anyway).

(And most of the firms I'm talking about are lockstep, with maybe 2-3 exceptions.)

[cheaptilts]

Yeah, it would be very crappy of the top firms not to give the same bonus as last year if many of their associates are working just as hard, under much worse conditions. It's one thing if the firms' finances are terrible and they truly can't afford it; it's another for partners to just hold on to their own compensation levels from last year and, to do so, cut off associate comp. And keep in mind, it's not just bankruptcy/restructuring associates who are working hard these days.

I expect Cravath, DPW, and other top firms to give at least some bonus, if not market from last year. Also, we still have half a year to go...

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

No, lots of partners are actually just very senior associates billed out at higher rates. And at least some associates effectively run cases, interacting with clients often and directly, to the point that they are the ones who keep the trains running. OBVIOUSLY it's true that firms must "strike a good balance." No one's saying this is the year for raises. But if top firms who are doing well financially make senior associates less-than-whole for long hours under difficult circumstances, there's a good chance their businesses will be disrupted and their reputations will take a hit. People still remember how firms acted during the last recession, and make choices accordingly (at the top schools, anyway).

(And most of the firms I'm talking about are lockstep, with maybe 2-3 exceptions.)

The bolded has been untrue for a couple years now.

[Joachim2017]

Yeah, it would be very crappy of the top firms not to give the same bonus as last year if many of their associates are working just as hard, under much worse conditions. It's one thing if the firms' finances are terrible and they truly can't afford it; it's another for partners to just hold on to their own compensation levels from last year and, to do so, cut off associate comp. And keep in mind, it's not just bankruptcy/restructuring associates who are working hard these days.

I expect Cravath, DPW, and other top firms to give at least some bonus, if not market from last year. Also, we still have half a year to go...

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

No, lots of partners are actually just very senior associates billed out at higher rates. And at least some associates effectively run cases, interacting with clients often and directly, to the point that they are the ones who keep the trains running. OBVIOUSLY it's true that firms must "strike a good balance." No one's saying this is the year for raises. But if top firms who are doing well financially make senior associates less-than-whole for long hours under difficult circumstances, there's a good chance their businesses will be disrupted and their reputations will take a hit. People still remember how firms acted during the last recession, and make choices accordingly (at the top schools, anyway).

(And most of the firms I'm talking about are lockstep, with maybe 2-3 exceptions.)

The bolded has been untrue for a couple years now.

Uh, no it hasn't. The internet keeps things forever, and applicants know how to use it. Speaking as someone with personal knowledge of multiple students who made decisions about whether to accept offers from places like Latham when they had other options available, people do remember. (And that points stands even if a place like Latham can still "fill a class.")

[Anonymous User]

Latham, as one example, has exceeded its “prestige” ranking in the past few years relative to where it was before the recession. Same goes for Kirkland, notwithstanding that it laid off tons of first years during the last recession:

https://www.google.com/amp/s/abovethela ... icago/amp/

You can argue about whether Vault is a good metric to determine whether those firms’ recession decisions are value-relevant for rising 2Ls of course, but I can’t think of a better proxy. And TLS traffic has screeched to a near halt over the last three years, even during the summer OCI season.

Of course “Pepperidge Farm“ remembers, but the new classes, who frequent TLS with far less regularity, really don’t/don’t care.

[ghostoftraynor]

Never understand when associates advocate for firms screwing associates.

[JusticeSquee]

Never understand when associates advocate for firms screwing associates.

Yeah WTF is going on here. We better get our fucking BONE-US or there is going to be some PROBLEMS.

(Just kidding, I'll probably keep chilling and billing regardless of what my bonus is, but I'll be MARGINALLY PISSED and EXTRA PASSIVE AGGRESSIVE for most of January if they fuck me over.)

[Sackboy]

Never understand when associates advocate for firms screwing associates.

I'm not advocating for screwing associates. I'm also just not delusional enough to think associates are more important to the firm than they are. The firm is about the equity partners at the end of the day.

[kovdak02]

I think bonuses will be down but not 2008 levels of cutting. Maybe something like 10/15/35/50/65 etc. Market last year for reference was 15/25/50/65/80/90/100. Just my gut feeling. If we rebound out of this quickly, then 2021 bonuses will rebound to 2019 and the firms will act like it's a big improvement.

It will be interesting, if the V10s are still doing well even in COVID, whether any of them will stick to 2019 levels - and if so, whether the rest of the top firms will follow along (and how far down the V that matching would go).

[kovdak02]

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

Everything is true, except the second sentence, which is very wrong. Try a firm with partners only and see how much revenue is created - it won't go well. That associates are much more fungible doesn't take away their (our) role in creating revenue and adding value to the firm. Associate fungibility may lessen any one of their individual values (Adam Associate is not as valuable as Peter Partner, and we all know it), but on the whole, associates are creating millions of dollars of revenue for biglaw firms every day (Peter can only buy his fourth lake house because of a stable of competent associates in his firm that he relies upon when he pitches work and then when it needs doing).

[sms18]

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

Everything is true, except the second sentence, which is very wrong. Try a firm with partners only and see how much revenue is created - it won't go well. That associates are much more fungible doesn't take away their (our) role in creating revenue and adding value to the firm. Associate fungibility may lessen any one of their individual values (Adam Associate is not as valuable as Peter Partner, and we all know it), but on the whole, associates are creating millions of dollars of revenue for biglaw firms every day (Peter can only buy his fourth lake house because of a stable of competent associates in his firm that he relies upon when he pitches work and then when it needs doing).

You're right that associates are creating a large portion of a firm's revenue, but because they are fungible as you say, a firm doesn't have strong incentives to give out good associate bonuses at a time like this because even if a number of associates complain and leave, they can be easily replaced. Partners with books of business are not fungible, so a firm would prioritize making them happy before bothering with the pool of associates.

[sms18]

Yeah, it would be very crappy of the top firms not to give the same bonus as last year if many of their associates are working just as hard, under much worse conditions. It's one thing if the firms' finances are terrible and they truly can't afford it; it's another for partners to just hold on to their own compensation levels from last year and, to do so, cut off associate comp. And keep in mind, it's not just bankruptcy/restructuring associates who are working hard these days.

I expect Cravath, DPW, and other top firms to give at least some bonus, if not market from last year. Also, we still have half a year to go...

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

No, lots of partners are actually just very senior associates billed out at higher rates. And at least some associates effectively run cases, interacting with clients often and directly, to the point that they are the ones who keep the trains running. OBVIOUSLY it's true that firms must "strike a good balance." No one's saying this is the year for raises. But if top firms who are doing well financially make senior associates less-than-whole for long hours under difficult circumstances, there's a good chance their businesses will be disrupted and their reputations will take a hit. People still remember how firms acted during the last recession, and make choices accordingly (at the top schools, anyway).

(And most of the firms I'm talking about are lockstep, with maybe 2-3 exceptions.)

The bolded has been untrue for a couple years now.

Uh, no it hasn't. The internet keeps things forever, and applicants know how to use it. Speaking as someone with personal knowledge of multiple students who made decisions about whether to accept offers from places like Latham when they had other options available, people do remember. (And that points stands even if a place like Latham can still "fill a class.")

You and i may know of some instances of law students deciding to choose a firm other than Latham because of what happened in the last recession (and what a privilege to be able to do so - an extremely small % of law students would've had this "choice"), but you have to admit that Latham has been doing quite well for the past decade despite the hit to their reputation (mostly online).

[miguelfoogo]

Strongly disagree. Partners create ALL of the revenue for a firm. The firm needs its partners to stay. Associates are much more fungible and have shorter memories. Every firm needs to strike a good balance between making its associates whole and keeping partners satisfied with their compensation. For most firms, that will mean associates end up less-than-whole in order to preserve partner compensation, and that's likely the right call from a business perspective.

Everything is true, except the second sentence, which is very wrong. Try a firm with partners only and see how much revenue is created - it won't go well. That associates are much more fungible doesn't take away their (our) role in creating revenue and adding value to the firm. Associate fungibility may lessen any one of their individual values (Adam Associate is not as valuable as Peter Partner, and we all know it), but on the whole, associates are creating millions of dollars of revenue for biglaw firms every day (Peter can only buy his fourth lake house because of a stable of competent associates in his firm that he relies upon when he pitches work and then when it needs doing).

You're right that associates are creating a large portion of a firm's revenue, but because they are fungible as you say, a firm doesn't have strong incentives to give out good associate bonuses at a time like this because even if a number of associates complain and leave, they can be easily replaced. Partners with books of business are not fungible, so a firm would prioritize making them happy before bothering with the pool of associates.

Well reasoned. Or at least this is the premise that should be acknowledged if someone wants to still argue in favor of the value of associate satisfaction in these times (i.e., full bonus) for keeping the revenue train both connected and moving. Maybe there's an argument for it in these uncertain times where many of the top 10 law schools will be holding class remotely, bar exam testing is becoming more difficult, and working remotely will make it hard to onboard new associates into biglaw firm culture. Could this imply less efficient-working-associate fungibility at top tier firms, such that law firms should be focused on associate retention?

[Sackboy]

Could this imply less efficient-working-associate fungibility at top tier firms, such that law firms should be focused on associate retention?

I'd say no, because where are the associates going to go? Law firm, in-house, and government hiring has almost ground to a halt in many industries and specialties. The uncertainty in onboarding new associates and thus wanting to work on increasing retention is no higher than the uncertainty of associates being able to leave their firm for another gig.

Associates are in a raw spot. That's the honest truth. I don't know why so many here are so desperate to fight that reality. It's an online forum, not your firm's HR office/exec committee. Advocacy is pointless here. Just say it how it is. Should we be worth more to the firm and would it be nice? Absolutely. Is that going to happen? Probably not.

[sms18]

Could this imply less efficient-working-associate fungibility at top tier firms, such that law firms should be focused on associate retention?

I'd say no, because where are the associates going to go? Law firm, in-house, and government hiring has almost ground to a halt in many industries and specialties. The uncertainty in onboarding new associates and thus wanting to work on increasing retention is no higher than the uncertainty of associates being able to leave their firm for another gig.

Associates are in a raw spot. That's the honest truth. I don't know why so many here are so desperate to fight that reality. It's an online forum, not your firm's HR office/exec committee. Advocacy is pointless here. Just say it how it is. Should we be worth more to the firm and would it be nice? Absolutely. Is that going to happen? Probably not.

I agree with this. It's a very basic supply and demand situation - there are way, way more law students and associate attorneys out there than are needed by law firms (hence, very fungible). sure, some associates are "smarter" or are "better lawyers" (or had better schooling) than others, but except at a pretty senior level, these factors actually don't matter as much as people (especially those from T14) like to think.

[Anonymous User]

Can someone at CSM weigh in on how busy the firm seems to be. CSM doesn't have a meaningful restructuring group so i'm worried they will be comparatively poor come bonus time. I'm a restructuring midlevel at PW and we are all fucking crushed. In addition to working on all our matters, our corporate folks and litigators are still busy with their own deals and cases. Know anecdotally through friends that firms like DPW, Weil, Kirkland, Milbank are all similarly busy.

If CSM justfiably lowers bonuses because poor, then i'm not confident that their peers who are still profitable will stay at 2019 levels out of goodness of their hearts. Add in concerns re bad optics of paying normal bonuses when people are being laid off en masse and things aren't looking good at all. Or maybe Milbank leads the way again and sets at 2019.

[Anonymous User]

Can someone at CSM weigh in on how busy the firm seems to be. CSM doesn't have a meaningful restructuring group so i'm worried they will be comparatively poor come bonus time. I'm a restructuring midlevel at PW and we are all fucking crushed. In addition to working on all our matters, our corporate folks and litigators are still busy with their own deals and cases. Know anecdotally through friends that firms like DPW, Weil, Kirkland, Milbank are all similarly busy.

If CSM justfiably lowers bonuses because poor, then i'm not confident that their peers who are still profitable will stay at 2019 levels out of goodness of their hearts. Add in concerns re bad optics of paying normal bonuses when people are being laid off en masse and things aren't looking good at all. Or maybe Milbank leads the way again and sets at 2019.

Kirkland is still pretty busy and some groups are absolutely swamped. The problem is that KE will never set the bonus market. They wait for market to be set and then run their black box formula with the median bonus at 1.2-1.3x market. If CSM slashes bonuses and the rest start to follow, Kirkland won’t be the firm who might save bonus season.

[Ultramar vistas]

Can someone at CSM weigh in on how busy the firm seems to be. CSM doesn't have a meaningful restructuring group so i'm worried they will be comparatively poor come bonus time. I'm a restructuring midlevel at PW and we are all fucking crushed. In addition to working on all our matters, our corporate folks and litigators are still busy with their own deals and cases. Know anecdotally through friends that firms like DPW, Weil, Kirkland, Milbank are all similarly busy.

If CSM justfiably lowers bonuses because poor, then i'm not confident that their peers who are still profitable will stay at 2019 levels out of goodness of their hearts. Add in concerns re bad optics of paying normal bonuses when people are being laid off en masse and things aren't looking good at all. Or maybe Milbank leads the way again and sets at 2019.

Kirkland is still pretty busy and some groups are absolutely swamped. The problem is that KE will never set the bonus market. They wait for market to be set and then run their black box formula with the median bonus at 1.2-1.3x market. If CSM slashes bonuses and the rest start to follow, Kirkland won’t be the firm who might save bonus season.

Agree it’s true historically that they have no interest in being the instigator for a V50 wide raise in bonuses that everyone will match anyway.

But I think that given how well the firm is doing this year, and how justifiably proud leadership is of the numbers, they’ll have a hard time justifying a smaller bonus than last year.

I think that bonuses will be as stratified as the whole response this year has been. Kirkland, Cravath or Milbank will maintain a flat scale, and then individual firms will send around sad emails to their associates explaining why they can’t pay bonuses this year.

[Anonymous User]

Milbank associate here. The restructuring group is gangbusters and many of the other groups are very busy as a result. At one point not that long ago, firm management said that on a whole we had been busier this year than last. And the firm has told incoming first years that they can start as early as early October (remotely if necessary) if they want. Fingers crossed

[Anonymous User]

Milbank associate here. The restructuring group is gangbusters and many of the other groups are very busy as a result. At one point not that long ago, firm management said that on a whole we had been busier this year than last. And the firm has told incoming first years that they can start as early as early October (remotely if necessary) if they want. Fingers crossed

Another Milbank associate here. Can confirm that our non-restructuring practices are also very, very busy. My group in particular is far busier than last year to the point we've had to rope in associates from other offices to help with the workload -- this has never happened before. Our group has also asked our incoming associates to start in October if they're able since we need bodies. While I don't expect bonuses to go up, I think associates would be pretty upset if we didn't get last year's bonuses.

[objctnyrhnr]

Which firm will be first to announce? And when?

What’s a solid v30 or so firm with an early calendar year end? I feel like molew has a calendar end in September or something, don’t they?

[Anonymous User]

It's usually around Thanksgiving so not for a while, assuming we're not still talking about summer bonuses