Lateral Bonus Repayment Forum

[Anonymous User]

For those of you who received a signing bonus and a “guaranteed” year-end bonus when lateraling but then left your new firm during the “lock-up” period to go in-house (to a client or otherwise), what were your experiences with the repayment of the bonus(es)? Was the repayment for both bonuses or just the signing bonus? Did your firm expect lump sum (and how quickly did the payment have to be made) or give pay back over time as an option? My offer letter only includes the repayment language in the signing bonus paragraph (i.e. if you leave, you must repay THIS bonus (singular) but seems a little vague (signing bonus paragraph follows guaranteed bonus paragraph)) but I can see a world where the firm would push for repayment of both.

Repayment of bonus(es) is not happening in the same tax year in which I received the bonus(es), so I would have to repay the full amount of the bonus(es) even though I only received the bonus(es) net of taxes (this is what makes things a little interesting from a repayment perspective since the taxes were a sizable amount).

I lateraled within the last year or so but have a really nice in-house opportunity on the horizon. My lock up expires toward the end of the year unfortunately and I would need to start well before then. Just trying to weigh what financial steps I’ll need to take if I go for the in house opportunity.

[lolwutpar]

The only type of money I've had locked up was moving expenses. I've never had guaranteed annual bonus or signing bonus subject to a clawback.

Realistically, especially if you're close to the end, I can't imagine a firm will try to claw it back, especially if you're going in house (potential future client), but then again, I didn't think firms would lock you up anyway, so maybe a firm that would isn't the best to test.

[Anonymous User]

I went in-house and the firm subjected me to clawback repayment for both bonuses (but my offer letter was clear this was what would happen). Also separate tax years so full repayment was required.

I’d have gladly paid them twice that amount if I had to, fuck that place. Life is infinitely better now.

[Excellent117]

Are you going in-house to a firm client? I'd imagine that might make a significant difference as to the likelihood they'll ask for repayment.

[Anonymous User]

I went in-house and the firm subjected me to clawback repayment for both bonuses (but my offer letter was clear this was what would happen). Also separate tax years so full repayment was required.

I’d have gladly paid them twice that amount if I had to, fuck that place. Life is infinitely better now.

Yea my offer letter is anything but clear so I guess ambiguity is construed against the drafter?

Are you going in-house to a firm client? I'd imagine that might make a significant difference as to the likelihood they'll ask for repayment.

It wouldn’t be an existing firm client but definitely a potential client based on size of deals and type of work. I would also be the person with the say on which outside counsel gets hired.

[Anonymous User]

Bumping this thread. The in-house position that I am considering to accept is for an existing client of the firm (v10, if that matters), and the lock-up period for my signing bonus ($30k - 70k range) expires in 5 months (I lateralled to this firm earlier this year). Do firms usually enforce clawback provisions in these types of situations?

[Anonymous User]

Bumping this thread. The in-house position that I am considering to accept is for an existing client of the firm (v10, if that matters), and the lock-up period for my signing bonus ($30k - 70k range) expires in 5 months (I lateralled to this firm earlier this year). Do firms usually enforce clawback provisions in these types of situations?

Nobody knows the answer, especially if you're not going to tell us which firm. But you can talk to a partner and explain your situation and NEGOTIATE (use those lawyer skills) for no clawback.