2021 End of Year Bonuses Forum

[Anonymous User]

Honestly think something like the below is a distinct possibility, slight increase to base with promise of some Spring/Summer special payouts.

* Class of 2021: Base: $20,000 (pro-rated); May 2022 Special Bonus: $10,000 (pro-rated); total: $30,000 (pro-rated)
* Class of 2020: Base: $20,000; May 2022 Special Bonus: $10,000; total: $30,000
* Class of 2019: Base: $30,000; May 2022 Special Bonus: $15,000; total: $45,000
* Class of 2018: Base: $60,000; May 2022 Special Bonus: $20,000; total: $80,000
* Class of 2017: Base: $75,000; May 2022 Special Bonus: $25,000; total: $100,000
* Class of 2016: Base: $90,000; May 2022 Special Bonus: $30,000; total: $120,000
* Class of 2015: Base: $100,000; May 2022 Special Bonus: $35,000; total: $135,000
* Class of 2014 and above: Base: $120,000; May 2022 Special Bonus: $40,000; total: $160,000

This was me. Sorry y'all.

Well, since you nailed this one - quick, how will DPW/Millbank/[some surprise contender] top this scale?

kthx!

As you can probably tell from my prognostication, I'm a pessimist (though not clearly pessimistic enough given that I thought they might offer up some mid-year bonuses). I don't think anyone tops this. Wow, the year was gangbusters for ppp and we all worked really hard? That's word for word what associates complain about every year.

Let's put on our partner hats. They think they have already compensated associates over the last two years with increased salaries and special bonuses. It makes much more fiscal sense to incrementally/slowly increase EOY as that gets locked in forever (reducing it would be suicide). Apparently they've already been digging deep into pockets to pay fat signing bonuses for laterals, so to the extent the incremental increase causes a round of angry exits (which always happens anyways), then its easier to put out the small fires with juicing up some signing bonuses than locking in massive EOY bonuses for everyone.

I think partners recognize that this last year was different - even if they think associates are just whining as usual, the completely nuts burn out rate and lateral market are proof that *something* changed, either in working conditions or associate mindset.

All else being equal, you'd rather keep your home grown talent than swap them for a lateral. Maybe that preference isn't strong enough to permanently raise the bonus level above where it's at now, but I think there's a strong argument for announcing another round of special Fall bonuses.

[lawdude31]

Honestly think something like the below is a distinct possibility, slight increase to base with promise of some Spring/Summer special payouts.

* Class of 2021: Base: $20,000 (pro-rated); May 2022 Special Bonus: $10,000 (pro-rated); total: $30,000 (pro-rated)
* Class of 2020: Base: $20,000; May 2022 Special Bonus: $10,000; total: $30,000
* Class of 2019: Base: $30,000; May 2022 Special Bonus: $15,000; total: $45,000
* Class of 2018: Base: $60,000; May 2022 Special Bonus: $20,000; total: $80,000
* Class of 2017: Base: $75,000; May 2022 Special Bonus: $25,000; total: $100,000
* Class of 2016: Base: $90,000; May 2022 Special Bonus: $30,000; total: $120,000
* Class of 2015: Base: $100,000; May 2022 Special Bonus: $35,000; total: $135,000
* Class of 2014 and above: Base: $120,000; May 2022 Special Bonus: $40,000; total: $160,000

This was me. Sorry y'all.

Well, since you nailed this one - quick, how will DPW/Millbank/[some surprise contender] top this scale?

kthx!

As you can probably tell from my prognostication, I'm a pessimist (though not clearly pessimistic enough given that I thought they might offer up some mid-year bonuses). I don't think anyone tops this. Wow, the year was gangbusters for ppp and we all worked really hard? That's word for word what associates complain about every year.

Let's put on our partner hats. They think they have already compensated associates over the last two years with increased salaries and special bonuses. It makes much more fiscal sense to incrementally/slowly increase EOY as that gets locked in forever (reducing it would be suicide). Apparently they've already been digging deep into pockets to pay fat signing bonuses for laterals, so to the extent the incremental increase causes a round of angry exits (which always happens anyways), then its easier to put out the small fires with juicing up some signing bonuses than locking in massive EOY bonuses for everyone.

I think partners recognize that this last year was different - even if they think associates are just whining as usual, the completely nuts burn out rate and lateral market are proof that *something* changed, either in working conditions or associate mindset.

All else being equal, you'd rather keep your home grown talent than swap them for a lateral. Maybe that preference isn't strong enough to permanently raise the bonus level above where it's at now, but I think there's a strong argument for announcing another round of special Fall bonuses.

Agreed - we do not need a permanent raise to the bonuses (although it would be welcome) but a special bonus can raise bonus amounts without locking it in for future years.

[Ultramar vistas]

I find the 57,500 particularly offensive. Like, would it have killed your PPP to go to 60,000? This scale should never be in increments of less than $5000, it’s embarrassingly penny-pinching.

[Anonymous User]

This is maybe a known thing and I'm just ignorant, but does Cravath do a multiplier for high performers? Like the class of 2015 person who does 3000 billables isn't really getting $105K right?

No.

[bigboybob]

So after taxes... the 5k/15k bump is what?? nothing. Missing those WFH pandemic days now.

[clone22]

Honestly think something like the below is a distinct possibility, slight increase to base with promise of some Spring/Summer special payouts.

* Class of 2021: Base: $20,000 (pro-rated); May 2022 Special Bonus: $10,000 (pro-rated); total: $30,000 (pro-rated)
* Class of 2020: Base: $20,000; May 2022 Special Bonus: $10,000; total: $30,000
* Class of 2019: Base: $30,000; May 2022 Special Bonus: $15,000; total: $45,000
* Class of 2018: Base: $60,000; May 2022 Special Bonus: $20,000; total: $80,000
* Class of 2017: Base: $75,000; May 2022 Special Bonus: $25,000; total: $100,000
* Class of 2016: Base: $90,000; May 2022 Special Bonus: $30,000; total: $120,000
* Class of 2015: Base: $100,000; May 2022 Special Bonus: $35,000; total: $135,000
* Class of 2014 and above: Base: $120,000; May 2022 Special Bonus: $40,000; total: $160,000

This was me. Sorry y'all.

Well, since you nailed this one - quick, how will DPW/Millbank/[some surprise contender] top this scale?

kthx!

As you can probably tell from my prognostication, I'm a pessimist (though not clearly pessimistic enough given that I thought they might offer up some mid-year bonuses). I don't think anyone tops this. Wow, the year was gangbusters for ppp and we all worked really hard? That's word for word what associates complain about every year.

Let's put on our partner hats. They think they have already compensated associates over the last two years with increased salaries and special bonuses. It makes much more fiscal sense to incrementally/slowly increase EOY as that gets locked in forever (reducing it would be suicide). Apparently they've already been digging deep into pockets to pay fat signing bonuses for laterals, so to the extent the incremental increase causes a round of angry exits (which always happens anyways), then its easier to put out the small fires with juicing up some signing bonuses than locking in massive EOY bonuses for everyone.

I think partners recognize that this last year was different - even if they think associates are just whining as usual, the completely nuts burn out rate and lateral market are proof that *something* changed, either in working conditions or associate mindset.

All else being equal, you'd rather keep your home grown talent than swap them for a lateral. Maybe that preference isn't strong enough to permanently raise the bonus level above where it's at now, but I think there's a strong argument for announcing another round of special Fall bonuses.

So what I am hearing is that the correct response is to just lateral somewhere with a fat signing bonus a day after EOY bonuses are paid at old shop, is that right?

[fmrez]

As you can probably tell from my prognostication, I'm a pessimist (though not clearly pessimistic enough given that I thought they might offer up some mid-year bonuses). I don't think anyone tops this. Wow, the year was gangbusters for ppp and we all worked really hard? That's word for word what associates complain about every year.

Let's put on our partner hats. They think they have already compensated associates over the last two years with increased salaries and special bonuses. It makes much more fiscal sense to incrementally/slowly increase EOY as that gets locked in forever (reducing it would be suicide). Apparently they've already been digging deep into pockets to pay fat signing bonuses for laterals, so to the extent the incremental increase causes a round of angry exits (which always happens anyways), then its easier to put out the small fires with juicing up some signing bonuses than locking in massive EOY bonuses for everyone.

I think partners recognize that this last year was different - even if they think associates are just whining as usual, the completely nuts burn out rate and lateral market are proof that *something* changed, either in working conditions or associate mindset.

All else being equal, you'd rather keep your home grown talent than swap them for a lateral. Maybe that preference isn't strong enough to permanently raise the bonus level above where it's at now, but I think there's a strong argument for announcing another round of special Fall bonuses.

Agreed - we do not need a permanent raise to the bonuses (although it would be welcome) but a special bonus can raise bonus amounts without locking it in for future years.

Not entirely true, at least one poster in here a few pages back was arguing quite zealously that they considered special bonuses part of standard comp and that anything below that now would be viewed as a reduction. Just one loud voice but I think there might be some fear on the partners part that the "special" bonuses don't become so special when they become routine. They don't want to set the standard that they will always put the cherry on top of the icing. I also think this explains in part the push to return to office. It seems silly, but why should there be a special (i.e. covid-related) bonus when we are back to normal. Also the argument about inflation cuts both ways--was PPP really that much higher if you account for inflation? All the costs of keeping the lights on and toilet paper in the bathrooms increased etc. etc. Also with inflation getting worse, do you really want to take a paycut to go in-house?

I also am not sure what associates would consider "fair". I agree it seems like attrition is getting worse, but this is all anecdotal for me at least. What would it really cost to get people to stay? For me it would have to be an eye-popping amount.

[Anonymous User]

So what I am hearing is that the correct response is to just lateral somewhere with a fat signing bonus a day after EOY bonuses are paid at old shop, is that right?

The days of relying on a standard market are over -- time to fight for individualized retention and signing bonuses or risk losing out on 6 figures of compensation.

[Anonymous User]

This is maybe a known thing and I'm just ignorant, but does Cravath do a multiplier for high performers? Like the class of 2015 person who does 3000 billables isn't really getting $105K right?

No.

Can confirm that they do not. So, OP: It is indeed true that the much-vaunted CSM actually pays less per-hour than most V100 firms. Factor in the unwritten yet very real expectation that CSM associates bill at least 3000 hours per year and you see that CSM ultimately offers by far the worst comp of any V100 firm (Wachtell has similar if not worse hours expectations, but at least pays more). For some, however, this shortfall in comp is offset by getting to carry a CSM-branded banker bag on the subway (made in China for approx. $2.99, landed).

[ConfusedNYer]

So what I am hearing is that the correct response is to just lateral somewhere with a fat signing bonus a day after EOY bonuses are paid at old shop, is that right?

The days of relying on a standard market are over -- time to fight for individualized retention and signing bonuses or risk losing out on 6 figures of compensation.

Basically - at this point if you are in a desirable practice as a mid-level to senior and you do not plan to make partner at your current firm, not lateraling for a bonus is shooting yourself in the foot comp wise.

My best guess is that naturally conservative partnerships think things will slow down a little, profits will drop and WLB will pivot a bit towards normal times stemming the tide of laterals. I'm sure they think of another round of special bonuses mid-year will help course correct if things do not slow down.

I do think that analysis probably misses a few considerations:

1) I'm sure partners thought shit would start slowing down months ago... and it has not. Preventative special bonus announcements would help with retention and can then be rolled back next year if things slow down around April/May (does anyone honestly think things will slow down before then?) I think it is highly unlikely anyone goes above CSM for year end bonuses (maybe a marginal increase), but a mid-year bonuses announced end of year may still be on the table.

2) I'm not sure you can put the lateral genie back in the bottle even if things do slow down. Attrition has been so rampant across the industry, can all the firms actually stabilize in the mid-level to senior ranks across all the hot practice groups even if the work slows down? Who knows, but I think there is a decent chance that the bodies are just not there anymore (and industry-wide lackluster bonuses are going to make that worse, a lot folks who grabbed that one time big bonus are probably still going to be out the door in a year or two with numbers like these.)

3) With bonus increases this low the perception will be that they're basically staying in line with inflation with you factor in taxes (not sure if that is actually true, too lazy to crunch the numbers.) So no one is going to be at all grateful for the increases.

4) Return to office is going to increase attrition regardless of comp numbers. Even if partners are right on the money about future trends you need some time of carrot to counteract that wave of departures in 2022 at a minimum.

I personally did not expect significant end of year bonus increases (although I expected better than this....) but I was almost positive there would be mid-year special bonuses baked in for at least 2022. The tactic CSM is following seems pretty short-sighted.

Although as long as there are bodies and the work gets done, maybe it does not matter what I think.

[Anonymous User]

Dear Cravath,

Last year, as a senior associate, I got a $140k bonus in December. Now you're offering me $115k? After I put up with this shit?

Sincerely,

Suck my D*ck

[Anonymous User]

This is maybe a known thing and I'm just ignorant, but does Cravath do a multiplier for high performers? Like the class of 2015 person who does 3000 billables isn't really getting $105K right?

No.

Can confirm that they do not. So, OP: It is indeed true that the much-vaunted CSM actually pays less per-hour than most V100 firms. Factor in the unwritten yet very real expectation that CSM associates bill at least 3000 hours per year and you see that CSM ultimately offers by far the worst comp of any V100 firm (Wachtell has similar if not worse hours expectations, but at least pays more). For some, however, this shortfall in comp is offset by getting to carry a CSM-branded banker bag on the subway (made in China for approx. $2.99, landed).

They got a second smaller bag too, so really two banker's bags. IDK if 3000 is accurate, but they're working a lot. Source: live with CSM associate.

[Anonymous User]

Cravath numbers are a disgrace, can't believe they think this is acceptable. Associates at my v10 in crisis right now all extremely mad about these numbers. This year has been horrible, profits at a record high, inflation going crazy, and these raises are amplifying the discussions to leave the industry.

[Anonymous User]

People keep dancing around this but I'll say it (again): if every firm will match EOY/special bonuses, then outsized lateral bonuses do not incentivize raising EOY bonuses. If anything, they have the opposite effect. If raising EOY bonuses won't stop laterals, partners would rather save cash on bonuses for slower practice groups and spend more on in-demand laterals. Change my mind.

The only thing that matters here is attrition to in-house or other jobs, which by all accounts is still a major issue. I don't think a 15% raise (that hardly keeps pace with inflation) is going to do much to stop that.

[Anonymous User]

Class of 2016 and 2017 seem to be at the top of the angry list. Class years with the heaviest bleed are getting the smallest raises percentage wise? Make it make sense.

[Anonymous User]

People keep dancing around this but I'll say it (again): if every firm will match EOY/special bonuses, then outsized lateral bonuses do not incentivize raising EOY bonuses. If anything, they have the opposite effect. If raising EOY bonuses won't stop laterals, partners would rather save cash on bonuses for slower practice groups and spend more on in-demand laterals. Change my mind.

The only thing that matters here is attrition to in-house or other jobs, which by all accounts is still a major issue. I don't think a 15% raise (that hardly keeps pace with inflation) is going to do much to stop that.

Well this is the real issue - people are going to treat the lateral market like they're 1 year rentals. The idea is to collect your year-end bonus, collect signing bonus, stick it out 1-year, and go in-house. The partnership seems to think this is okay because they're bringing in larger summer classes and they expect work to slow down. That's why some firms are pushing in back to the office - not because of culture or profitability, it's because they need us in office to train the huge class of new associates. Basically, they know we're already broken and just want us to train our replacement. This might be messed up, but it might be better to give no guidance on our way out.

[Anonymous User]

People keep dancing around this but I'll say it (again): if every firm will match EOY/special bonuses, then outsized lateral bonuses do not incentivize raising EOY bonuses. If anything, they have the opposite effect. If raising EOY bonuses won't stop laterals, partners would rather save cash on bonuses for slower practice groups and spend more on in-demand laterals. Change my mind.

The only thing that matters here is attrition to in-house or other jobs, which by all accounts is still a major issue. I don't think a 15% raise (that hardly keeps pace with inflation) is going to do much to stop that.

You answer your own question. The point of bonuses is to stop attrition not inter-firm swapping. Biglaw is experiencing unprecedented attrition because of burn out, fatigue, COVID, more desirable in-house options, insane client demands. At the same time they're experiencing record profits--I'm at a V10 and I know exactly where our revenue and profitability will be landing this year, within a margin of error, and it's unseemly.

The answer to this A+B situation would be a sizeable year end bonus designed to signal in a big way to attorneys in our industry across the board that they're valued and valuable and to stick with it. Cravath's scale doesn't do that; it's almost offensive, like a Marie Antoinette style gesture--"Oh, our profits are up and you're ready to quit from burn out? Here you go, enjoy yourself, don't spend it all at once."

The only brightside of this to me is that this didn't come from DPW or Milbank or STB. Cravath increasingly is looking out of step with the rest of the industry so I'm still waiting for one of these players to step up and make Cravath look like the asshole (or more economically weak than it'd like to admit) place that it is.

[Anonymous User]

A 15% increase in bonus compensation — while keeping base salaries flat — wouldn't even keep up with inflation this year, even before taxes, which is just insulting after the hours I and everyone I know has put in this year. I guess CSM has been coasting on reputation for awhile now while its rainmakers keep getting poached.

If my firm doesn't beat this, I'm contacting recruiters. If I have to put up above-market billables, might as well go somewhere that pays me for it, with a signing bonus to boot.

[Anonymous User]

This is maybe a known thing and I'm just ignorant, but does Cravath do a multiplier for high performers? Like the class of 2015 person who does 3000 billables isn't really getting $105K right?

No.

Can confirm that they do not. So, OP: It is indeed true that the much-vaunted CSM actually pays less per-hour than most V100 firms. Factor in the unwritten yet very real expectation that CSM associates bill at least 3000 hours per year and you see that CSM ultimately offers by far the worst comp of any V100 firm (Wachtell has similar if not worse hours expectations, but at least pays more). For some, however, this shortfall in comp is offset by getting to carry a CSM-branded banker bag on the subway (made in China for approx. $2.99, landed).

Huh... all these years (I'm a senior assoc. at a V10) I assumed they did their scale and then the sample size of associates willing to discuss their own comp was just too small to get a good read on what really happened. Thanks for clearing that up. And also that's not good comp imho, all things considered.

[splitmuch]

What I dont get is I would think lower leveraged firms like cravath would drive up associate compensation in order to put pressure on their more highly leveraged competitors. With the boom it wouldnt surprise me if Cravath fell outside of the top 10 PPP this yr as other firms benefit from larger but now more similarly utilized associate ranks

[ExpOriental]

What I dont get is I would think lower leveraged firms like cravath would drive up associate compensation in order to put pressure on their more highly leveraged competitors. With the boom it wouldnt surprise me if Cravath fell outside of the top 10 PPP this yr as other firms benefit from larger but now more similarly utilized associate ranks

Cravath is not a low leverage firm:

viewtopic.php?f=23&t=311297&p=10493937& ... #p10493937

[Anonymous User]

You answer your own question. The point of bonuses is to stop attrition not inter-firm swapping.

No, that was not part of my question. That was my thesis. The reason I posted is because people ITT pretend like big signing bonuses are a sign that EOY bonuses will go up. They are not.

Well this is the real issue - people are going to treat the lateral market like they're 1 year rentals. The idea is to collect your year-end bonus, collect signing bonus, stick it out 1-year, and go in-house.

Right, but larger EOY bonuses will not solve that in the slightest.

Listen, I want larger EOY bonuses as much as the next poster (and I think they are needed to combat attrition and inflation), but let's stop fooling ourselves with nonsense logic that won't appeal to any partners.

[splitmuch]

What I dont get is I would think lower leveraged firms like cravath would drive up associate compensation in order to put pressure on their more highly leveraged competitors. With the boom it wouldnt surprise me if Cravath fell outside of the top 10 PPP this yr as other firms benefit from larger but now more similarly utilized associate ranks

Cravath is not a low leverage firm:

viewtopic.php?f=23&t=311297&p=10493937& ... #p10493937

Well, that explains that, then

[Anonymous User]

I think the simplest argument for more money is in many professional industries (banking via bonuses, tech via RSUs, PE via carry), a large portion of compensation is tied to profits of the firms. Revenue and PEP across the industry is up so we should accordingly be rewarded as our peers in other industries are rewarded.

If firms are blatantly throwing that part of the culture out the window, I'm done pretending to care that profits are, again, at record highs while attrition continues to spiral out of control.

[Anonymous User]

You answer your own question. The point of bonuses is to stop attrition not inter-firm swapping.

No, that was not part of my question. That was my thesis. The reason I posted is because people ITT pretend like big signing bonuses are a sign that EOY bonuses will go up. They are not.

Yeah, IMO the firms have created a pretty horrible incentive structure by A) paying laterals the year-end and special bonuses that they're forgoing at their last firm, B) offering huge signing bonuses, and C) usually not offering retention bonuses with a claw when their associates tell them what the poaching firm has offered. At that point, lateralling is always going to be the financially rational choice.