2021 End of Year Bonuses Forum

[Anonymous User]

The new scale might be an indication that the special bonuses are here to stay, essentially giving firms an easy way to lower compensation in down years without having the look of cutting EOY bonuses instead. Hopefully DPW continues its trend of one-upping other firms on compensation and special bonuses are here to stay.

[Anonymous User]

The new scale might be an indication that the special bonuses are here to stay, essentially giving firms an easy way to lower compensation in down years without having the look of cutting EOY bonuses instead. Hopefully DPW continues its trend of one-upping other firms on compensation and special bonuses are here to stay.

Yep, the Cravath bump is a scale that could be used in 2022 even if the economy cools off and it’s only a little more than an inflationary raise (of course if the economy tanks then they’ll lower the scale, but I imagine they want to avoid doing that). And I imagine that is intentional.

Will special comp be announced by any peers before the new year? Or will firms wait and see what attrition and the lateral market looks like and starts throwing around bigger and bigger lateral bonuses to try to fill their openings before deciding that they gotta do another round of April special bonuses after all? Don’t underestimate how cheap these firms can be.

[Anonymous User]

The new scale might be an indication that the special bonuses are here to stay, essentially giving firms an easy way to lower compensation in down years without having the look of cutting EOY bonuses instead. Hopefully DPW continues its trend of one-upping other firms on compensation and special bonuses are here to stay.

Yep, the Cravath bump is a scale that could be used in 2022 even if the economy cools off and it’s only a little more than an inflationary raise (of course if the economy tanks then they’ll lower the scale, but I imagine they want to avoid doing that). And I imagine that is intentional.

Will special comp be announced by any peers before the new year? Or will firms wait and see what attrition and the lateral market looks like and starts throwing around bigger and bigger lateral bonuses to try to fill their openings before deciding that they gotta do another round of April special bonuses after all? Don’t underestimate how cheap these firms can be.

Firms cannot afford but to do better than this. People are going to leave en masse. They were leaving before this and announcing a paltry 10% raise in the face of record-breaking profits and horrible attrition isn't going to cut it. My take is Cravath's scale was meant to be a starting bid and they know that it isn't where the market will end up at. It's only a question of how big the beat is.

[glitched]

I agree. Cravath knows it’ll be beat but they decided to try and set an anchor. It’s a negotiation tactic.

[Anonymous User]

My guess is an additional $10-20k by the end of this for midlevels/seniors.

[Monochromatic Oeuvre]

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.

Of course higher EOY bonuses slow people from going in-house. This year's bonus informs expectations of what next year's bonus will be, and the higher those expectations, the less likely someone is to forego it to go in-house.

But the higher EOY bonuses also slow hiring between Biglaw firms. That's first because not everyone gets a guaranteed full year-end bonus when they lateral, and second because even if it *is* guaranteed, more guaranteed money means the firm is less likely to hire them. So there are both supply and demand-side effects. The outsized movement you see now is precisely an unusually high ratio of potential comp to sign somewhere else to total comp at one's current firm.

Also, this has mostly gone unsaid ITT but, obviously, if a firm were to actually commit to paying significantly *more* than its peers, it would get a flood of laterals. No one expects any firm to newly do that but, you know...it would be *less* weird if Cravath paid more than Fried Frank, not more weird.

[Anonymous User]

Right, in the current lateral market increased comp primarily only helps prevent attrition out of biglaw entirely because bonuses are being matched for many laterals (often with signing bonuses on top). On the other hand, adding $50k+ to someone's annual comp can make the pay cut to in-house tougher to swallow, while adding $10-15k maybe not so much.

[Anonymous User]

LFG DPW

[Anonymous User]

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.

Of course higher EOY bonuses slow people from going in-house. This year's bonus informs expectations of what next year's bonus will be, and the higher those expectations, the less likely someone is to forego it to go in-house.

But the higher EOY bonuses also slow hiring between Biglaw firms. That's first because not everyone gets a guaranteed full year-end bonus when they lateral, and second because even if it *is* guaranteed, more guaranteed money means the firm is less likely to hire them. So there are both supply and demand-side effects. The outsized movement you see now is precisely an unusually high ratio of potential comp to sign somewhere else to total comp at one's current firm.

Also, this has mostly gone unsaid ITT but, obviously, if a firm were to actually commit to paying significantly *more* than its peers, it would get a flood of laterals. No one expects any firm to newly do that but, you know...it would be *less* weird if Cravath paid more than Fried Frank, not more weird.

Fried Frank catching ricochet shots. And here I thought we were pretty under the radar.

[Anonymous User]

If we are still playing the prediction game, my guess is someone comes in today or tomorrow and one-ups this, but not by too much. Just enough to differentiate:

2021 = $15k (pro rated) -->$20k
2020 = $20k -->$25k
2019 = $30k -->$35k
2018 = $57.5k -->$70k
2017 = $75k -->$85K
2016 = $90k -->$100k
2015 = $105k -->$120k
2014 = $115k -->$130k

Something like that. I could also see a scale universally 5K less (so no bump for 2021-2019). And the other firms will rush to match (but not beat), and that will be the scale.

[Ultramar vistas]

If we are still playing the prediction game, my guess is someone comes in today or tomorrow and one-ups this, but not by too much. Just enough to differentiate:

2021 = $15k (pro rated) -->$20k
2020 = $20k -->$25k
2019 = $30k -->$35k
2018 = $57.5k -->$70k
2017 = $75k -->$85K
2016 = $90k -->$100k
2015 = $105k -->$120k
2014 = $115k -->$130k

Something like that. I could also see a scale universally 5K less (so no bump for 2021-2019). And the other firms will rush to match (but not beat), and that will be the scale.

This would at least be in line with inflation… unlike Cravattth.

[Anonymous User]

If we are still playing the prediction game, my guess is someone comes in today or tomorrow and one-ups this, but not by too much. Just enough to differentiate:

2021 = $15k (pro rated) -->$20k
2020 = $20k -->$25k
2019 = $30k -->$35k
2018 = $57.5k -->$70k
2017 = $75k -->$85K
2016 = $90k -->$100k
2015 = $105k -->$120k
2014 = $115k -->$130k

Something like that. I could also see a scale universally 5K less (so no bump for 2021-2019). And the other firms will rush to match (but not beat), and that will be the scale.

But this still doesn't address the fact of making LESS money next year on an inflation adjusted basis. Great to see comp go up this year, but the class-year difference in salary + EOY bonus on this scale for a midlevel is roughly flat. Maybe the idea was to front-load compensation during the pandemic or that the market is going to dramatically slow (and thus firms are hedging against that eventuality). Or, maybe, all of the associate comp was just from PPP Loans. In either case, doing more work and taking on more responsibility for the equivalent pay on real terms is a losing proposition.

[fmrez]

If we are still playing the prediction game, my guess is someone comes in today or tomorrow and one-ups this, but not by too much. Just enough to differentiate:

2021 = $15k (pro rated) -->$20k
2020 = $20k -->$25k
2019 = $30k -->$35k
2018 = $57.5k -->$70k
2017 = $75k -->$85K
2016 = $90k -->$100k
2015 = $105k -->$120k
2014 = $115k -->$130k

Something like that. I could also see a scale universally 5K less (so no bump for 2021-2019). And the other firms will rush to match (but not beat), and that will be the scale.

But this still doesn't address the fact of making LESS money next year on an inflation adjusted basis. Great to see comp go up this year, but the class-year difference in salary + EOY bonus on this scale for a midlevel is roughly flat. Maybe the idea was to front-load compensation during the pandemic or that the market is going to dramatically slow (and thus firms are hedging against that eventuality). Or, maybe, all of the associate comp was just from PPP Loans. In either case, doing more work and taking on more responsibility for the equivalent pay on real terms is a losing proposition.

Why does everyone think firms care about flat salary/inflation concerns? Wasn't the salary scale stuck at the 160k model for nearly a decade?

[Anonymous User]

If we are still playing the prediction game, my guess is someone comes in today or tomorrow and one-ups this, but not by too much. Just enough to differentiate:

2021 = $15k (pro rated) -->$20k
2020 = $20k -->$25k
2019 = $30k -->$35k
2018 = $57.5k -->$70k
2017 = $75k -->$85K
2016 = $90k -->$100k
2015 = $105k -->$120k
2014 = $115k -->$130k

Something like that. I could also see a scale universally 5K less (so no bump for 2021-2019). And the other firms will rush to match (but not beat), and that will be the scale.

But this still doesn't address the fact of making LESS money next year on an inflation adjusted basis. Great to see comp go up this year, but the class-year difference in salary + EOY bonus on this scale for a midlevel is roughly flat. Maybe the idea was to front-load compensation during the pandemic or that the market is going to dramatically slow (and thus firms are hedging against that eventuality). Or, maybe, all of the associate comp was just from PPP Loans. In either case, doing more work and taking on more responsibility for the equivalent pay on real terms is a losing proposition.

Why does everyone think firms care about flat salary/inflation concerns? Wasn't the salary scale stuck at the 160k model for nearly a decade?

Agree, I think firms only care about perception and few associates are doing the inflation calculation and even those that are, know firms are not really looking at that for raises based on the 160K scale. What firms will try to do is make it feel like a significant increase. For juniors, a 5K increase is sizable, but a $7.5K increase for midlevels feels paltry. I think 2018 has to go to at least $65K.

[Anonymous User]

If we are still playing the prediction game, my guess is someone comes in today or tomorrow and one-ups this, but not by too much. Just enough to differentiate:

2021 = $15k (pro rated) -->$20k
2020 = $20k -->$25k
2019 = $30k -->$35k
2018 = $57.5k -->$70k
2017 = $75k -->$85K
2016 = $90k -->$100k
2015 = $105k -->$120k
2014 = $115k -->$130k

Something like that. I could also see a scale universally 5K less (so no bump for 2021-2019). And the other firms will rush to match (but not beat), and that will be the scale.

But this still doesn't address the fact of making LESS money next year on an inflation adjusted basis. Great to see comp go up this year, but the class-year difference in salary + EOY bonus on this scale for a midlevel is roughly flat. Maybe the idea was to front-load compensation during the pandemic or that the market is going to dramatically slow (and thus firms are hedging against that eventuality). Or, maybe, all of the associate comp was just from PPP Loans. In either case, doing more work and taking on more responsibility for the equivalent pay on real terms is a losing proposition.

Why does everyone think firms care about flat salary/inflation concerns? Wasn't the salary scale stuck at the 160k model for nearly a decade?

Agree, I think firms only care about perception and few associates are doing the inflation calculation and even those that are, know firms are not really looking at that for raises based on the 160K scale. What firms will try to do is make it feel like a significant increase. For juniors, a 5K increase is sizable, but a $7.5K increase for midlevels feels paltry. I think 2018 has to go to at least $65K.

[Anonymous User]

Hey - can someone explain to me why people keep saying we're making less this year than last year?

In 2020, a 1st year made 190k base + 15k EOY bonus + $7.5k COVID bonus = $212,500
In 2021, a 1st year made 205k* base + $20k EOY bonus + $12k retention bonus = $237,000
*I understand the base salary was only raised half way through the year, so it's really more like $197.5K base, but still more than 2020.

I'm not trying to flame - I'm just trying to understand how people are calculating us making less money. For reference, I'm going off the numbers here which also adjusts for inflation: https://www.biglawinvestor.com/biglaw-salary-scale/

[TigerIsBack]

What time does DPW typically announce bonuses? Presumably they had already approved up to a certain amount and they just needed to get on the horn last night and decide how much to raise the scale by.

[clone22]

What time does DPW typically announce bonuses? Presumably they had already approved up to a certain amount and they just needed to get on the horn last night and decide how much to raise the scale by.

I am sure that as soon as the powers that be are at their machines and have had a chance to get on their horns, they will circulate some scans of their hand markups of an email, and then we will know.

[Anonymous User]

Hey - can someone explain to me why people keep saying we're making less this year than last year?

In 2020, a 1st year made 190k base + 15k EOY bonus + $7.5k COVID bonus = $212,500
In 2021, a 1st year made 205k* base + $20k EOY bonus + $12k retention bonus = $237,000
*I understand the base salary was only raised half way through the year, so it's really more like $197.5K base, but still more than 2020.

I'm not trying to flame - I'm just trying to understand how people are calculating us making less money. For reference, I'm going off the numbers here which also adjusts for inflation: https://www.biglawinvestor.com/biglaw-salary-scale/

Many firms paid last year's special bonus at the same time as the normal EOY bonus in one payment, and people are comparing those EOY bonuses to this year's EOY bonus, which so far doesn't have a special bonus wrapped in. In classic TLS fashion, there are already 2 or 3 pages of people arguing over whether it is right to think of things this way.

[Anonymous User]

What complicates matters is that some firms (ahem Ropes) have still not paid out the second part of the 2021 special bonus. Would be great to have another special bonus paid out at end of year but that wouldn't reduce attrition - people would still leave in January once it hits their bank. They need one payable in March & September so there's a sense of bonuses paid 3x/year and keeps associates motivated to stay put.

[Anonymous User]

Could Zaretsky be more tone deaf?

https://abovethelaw.com/2021/11/first-mover-on-bonus/

[glitched]

If I was a senior at Cravath, I'd be so pissed.

[TigerIsBack]

Could Zaretsky be more tone deaf?

https://abovethelaw.com/2021/11/first-mover-on-bonus/

Which is interesting since I'm pretty sure a lot of the ATL writers read this site for updates and then go out and try to verify them after (and if not they should be because 99.99% of comp news breaks here before ATL). You'd think she'd realize no associates are happy with these TTT bonuses.

[Anonymous User]

I woke up this morning disgusted; I honestly can't believe this. I'm a senior associate and with my hours + how I'm billed out I have to be bringing my firm (a V10) close to $2.5m in revenue. I've also spent the last two years in COVID basically working all hours from my house with little kids, which has been maddening. We are all burned out. I was expecting a scale about 1.5x of last year's recognizing how healthy the firm is and also how badly people are doing mental-health wise. Cravath's idea that bumping the scale by 10% is an acceptable move is so tone deaf. Even if DPW or STB jumps in with another 10k kicker we're just not in the realm of where we should be in terms of compensating associates for what they're generating for the firms under these conditions. This has seriously made me consider looking in-house in January I'm just done with this shit.

[Anonymous User]

I woke up this morning disgusted; I honestly can't believe this. I'm a senior associate and with my hours + how I'm billed out I have to be bringing my firm (a V10) close to $2.5m in revenue. I've also spent the last two years in COVID basically working all hours from my house with little kids, which has been maddening. We are all burned out. I was expecting a scale about 1.5x of last year's recognizing how healthy the firm is and also how badly people are doing mental-health wise. Cravath's idea that bumping the scale by 10% is an acceptable move is so tone deaf. Even if DPW or STB jumps in with another 10k kicker we're just not in the realm of where we should be in terms of compensating associates for what they're generating for the firms under these conditions. This has seriously made me consider looking in-house in January I'm just done with this shit.

Same. I called a recruiter this morning.