2021 End of Year Bonuses Forum

[VentureMBA]

Investment banks have managed to get away with discretionary compensation, haven't they?

[njdevils2626]

Investment banks have managed to get away with discretionary compensation, haven't they?

As a generally high-biller, I've got no problems with discretionary bonuses, but this comparison doesn't seem relevant. There are a lot less top IBs than V100 firms

[Anonymous User]

Can we please stop with the pissing contest and get back to wild speculation about bonus size?

[Monochromatic Oeuvre]

Investment banks have managed to get away with discretionary compensation, haven't they?

Law firms have very specifically avoided paying people proportionately to their revenue generation (which is a bit closer to the IB model), knowing full well that most of their profit lies in pressuring people to work far more than their breakeven point for no additional money.

[Anonymous User]

Investment banks have managed to get away with discretionary compensation, haven't they?

Law firms have very specifically avoided paying people proportionately to their revenue generation (which is a bit closer to the IB model), knowing full well that most of their profit lies in pressuring people to work far more than their breakeven point for no additional money.

...so pay people more for higher hours. ohshit looks like we solved it.

[ChairmanKaga]

Can we please stop with the pissing contest and get back to wild speculation about bonus size?

I'll play. My bet is the grid is similar to last year, but upped for mid-levels and above, and accompanied by an announcement of more April/September bonuses for 2022. I don't see the individualized bonuses at Skadden and PW catching on.

[NoLongerALurker]

Can we please stop with the pissing contest and get back to wild speculation about bonus size?

I'll play. My bet is the grid is similar to last year, but upped for mid-levels and above, and accompanied by an announcement of more April/September bonuses for 2022. I don't see the individualized bonuses at Skadden and PW catching on.

My bet:
15k
25k
65k
80k
95k
100k
110k

[gregfootball2001]

Betting even higher on the top end. Here's my (completely unsubstantiated) guess:

2021 20k (pro rated)
2020 20k
2019 35k
2018 60k
2017 75k
2016 90k
2015 110k
2014 130k

As well as announcement of special bonuses, but the special bonuses will be at the same level as last year.

[screwtapeletters]

Betting even higher on the top end. Here's my (completely unsubstantiated) guess:

2021 20k (pro rated)
2020 20k
2019 35k
2018 60k
2017 75k
2016 90k
2015 110k
2014 130k

As well as announcement of special bonuses, but the special bonuses will be at the same level as last year.

Here’s my guess:

2021 20k (pro rated)
2020 20k
2019 35k
2018 65k
2017 80k
2016 95k
2015 115k
2014 125k

[Anonymous User]

This was the busiest year on record for many large firms, which coincides with the busiest lateral market and most difficult period of associate retention on record for many large firms (thus, e.g., the Skadden retention bonuses).

The scale last year, including the special year-end bonus, but not including any midyear bonuses, was:

• 2013+: $100,000 + $40,000

• 2014: $90,000 + $37,000

• 2015: $80,000 + $32,500

• 2016: $65,000 + $27,500

• 2017: $50,000 + $20,000

• 2018: $25,000 + $10,000

• 2019: $15,000 + $7,500

• 2020: $15,000 + $7,500 (prorated)

I think the year-end bonus scale may remain the same but the special year-end bonuses will increase significantly:

• 2014+: $100,000 + $100,000

• 2015: $90,000 + $90,000

• 2016: $80,000 + $80,000

• 2017: $65,000 + $65,000

• 2018: $50,000 + $50,000

• 2019: $25,000 + $25,000

• 2020: $15,000 + $15,000

• 2021: $15,000 + $15,000 (prorated)

This would be clean increase close to 1.5x for total year-end bonuses, particularly for seniors and midlevels where the attrition is most drastic. Increasing the "special" bonuses in lieu of the year-end bonuses would give firms more flex should work start to slow down as e.g. rates increase or the economy stagnates. And I expect the special bonuses may for some firms vest or be paid down the line (e.g. at the end of Q1 and Q2 2022) to promote retention.

[LBJ's Hair]

Finally, if you're pissed that you're at PW or Skadden and you billed 2200 and didn't get extra while Mike down the hall billed 2400 and got an extra $50K, there is an easy answer here: lateral. Either the firm is invested in keeping you, and they'll pay to do it, or they're not, and there are numerous other V10s which will likely make you whole on the financial front.

I'm not sure the earlier poster is arguing with the notion that someone who works more deserves a larger bonus. I think instead the earlier poster is questioning the reliability of moving away from flat lock-step on the basis that more hours billed always correlates to working more.

As a seventh year associate who had my busiest year ever last year (b/w 2600 and 2700), I regularly review bills and see that other people's billing practices are way more "lenient" than mine. Several of my honestly billed 14-15 hour days come through as 16-17 hour days for another associate that started/ended at the same time as me and took just as many "breaks" to get a drink/go to the bathroom, etc. (I know this because I don't take breaks... so there can't be much time to be had here).

Whether it is intentional padding, or just careless recording of time on a busy day and rounding up at the end when time is inserted, the variation among billers is tangible.

The difference between 2000 and 2500 is probably that people are just working different amounts. But at 50-100 hour increments on the year, that doesn't mean much.

my s/o in lit does what you're describing - turns off clock when s/he's going to the bathroom, etc, that level of scrupulousness.

I'm in transactional, at a different firm, and this is absolutely not how we bill. way less particular

dunno if it's lit vs corporate, cost-sensitivity of clients, w/e, but agree hard to compare

[Anonymous User]

This was the busiest year on record for many large firms, which coincides with the busiest lateral market and most difficult period of associate retention on record for many large firms (thus, e.g., the Skadden retention bonuses).

The scale last year, including the special year-end bonus, but not including any midyear bonuses, was:

• 2013+: $100,000 + $40,000

• 2014: $90,000 + $37,000

• 2015: $80,000 + $32,500

• 2016: $65,000 + $27,500

• 2017: $50,000 + $20,000

• 2018: $25,000 + $10,000

• 2019: $15,000 + $7,500

• 2020: $15,000 + $7,500 (prorated)

I think the year-end bonus scale may remain the same but the special year-end bonuses will increase significantly:

• 2014+: $100,000 + $100,000

• 2015: $90,000 + $90,000

• 2016: $80,000 + $80,000

• 2017: $65,000 + $65,000

• 2018: $50,000 + $50,000

• 2019: $25,000 + $25,000

• 2020: $15,000 + $15,000

• 2021: $15,000 + $15,000 (prorated)

This would be clean increase close to 1.5x for total year-end bonuses, particularly for seniors and midlevels where the attrition is most drastic. Increasing the "special" bonuses in lieu of the year-end bonuses would give firms more flex should work start to slow down as e.g. rates increase or the economy stagnates. And I expect the special bonuses may for some firms vest or be paid down the line (e.g. at the end of Q1 and Q2 2022) to promote retention.

EOY has been stagnant for 7yrs. Inflation is killing the value of the dollar. Gotta give us this EOY raise or pay us additional bonus in Ethereum as a hedging mechanism Meanwhile law school tuition went up by whopping ~50%. Something’s gotta be done.

[Anonymous User]

Finally, if you're pissed that you're at PW or Skadden and you billed 2200 and didn't get extra while Mike down the hall billed 2400 and got an extra $50K, there is an easy answer here: lateral. Either the firm is invested in keeping you, and they'll pay to do it, or they're not, and there are numerous other V10s which will likely make you whole on the financial front.

I'm not sure the earlier poster is arguing with the notion that someone who works more deserves a larger bonus. I think instead the earlier poster is questioning the reliability of moving away from flat lock-step on the basis that more hours billed always correlates to working more.

As a seventh year associate who had my busiest year ever last year (b/w 2600 and 2700), I regularly review bills and see that other people's billing practices are way more "lenient" than mine. Several of my honestly billed 14-15 hour days come through as 16-17 hour days for another associate that started/ended at the same time as me and took just as many "breaks" to get a drink/go to the bathroom, etc. (I know this because I don't take breaks... so there can't be much time to be had here).

Whether it is intentional padding, or just careless recording of time on a busy day and rounding up at the end when time is inserted, the variation among billers is tangible.

The difference between 2000 and 2500 is probably that people are just working different amounts. But at 50-100 hour increments on the year, that doesn't mean much.

my s/o in lit does what you're describing - turns off clock when s/he's going to the bathroom, etc, that level of scrupulousness.

I'm in transactional, at a different firm, and this is absolutely not how we bill. way less particular

dunno if it's lit vs corporate, cost-sensitivity of clients, w/e, but agree hard to compare

I'm in lit and we have clients that are okay with us billing like 6, 8, 10 hours in one day with a narrative as simple as "Research and draft brief re XYZ," and others that would require that broken out into individual pieces about the substance of the research and of the portions of the brief that were drafted and would ask the partner to write off time if they thought a portion of the brief was billed too high relative to how much of it made it into the filed version. Very client dependent.

[peoplearehungry]

I'm in lit and we have clients that are okay with us billing like 6, 8, 10 hours in one day with a narrative as simple as "Research and draft brief re XYZ," and others that would require that broken out into individual pieces about the substance of the research and of the portions of the brief that were drafted and would ask the partner to write off time if they thought a portion of the brief was billed too high relative to how much of it made it into the filed version. Very client dependent.

What a nightmare. I know the bolded above happens but I would run away as fast as I could from any client that had requirements like this. Would be terrible to work for, from my standpoint.

[Pulsar]

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.

[Anonymous User]

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.

No. Every 5, 10, 25, 50k makes a huge difference in a single-income household with babies. Diapers and daycare are expensive.

[LBJ's Hair]

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.

honestly, no. give me money. if I cared about lifestyle I wouldn't be in BigLaw

[Anonymous User]

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.

Nah, I'd rather make the $500k for 2000 hrs. Even if you don't make partner, you can still make pretty lucrative money as a non-equity partner in the right niche. I started out making $600k a year in that role, lateraled to another firm for $700k and just came back to my old firm for $800k. Class of 2009 for reference.

[Monochromatic Oeuvre]

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.

[Anonymous User]

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.

[Anonymous User]

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.

This is a personal pet peeve of mine. We do not make minimum wage or even close to it. No matter how you slice it, it’s not close. Even if you do OT at 2x after 12 hours. This needs to stop.

ETA— sorry didn’t realize we were talking about bonus. I take the above back for that context. I’ve heard the above shtick for our base salaries several times from fellow associates and it blows my mind that people believe it.

[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)

[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.

[LBJ's Hair]

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.

yeah I just don't understand this framing.

no one has offered me the choice of (i) "bill 2,200 and get $X," or (ii) "bill 2,400 and get $X + $5K." it's not like I can just log off for 6 weeks November 23 once I hit some hypothetical hours target for the year.

if I did that, I would be fired. I'm a salaried employee with discretionary year-end bonuses.

this isn't an hourly job; you gotta look at aggregate compensation

[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.

Second, like the other person said, nobody is working extra hours for the bonus. They are working the hours because that's the job. You're already paid a salary for the work. The extra 5k on top of 15k (or whatever) on top of 205/220/etc adds up to an income level that (together with the long term prospects) is worth the job, to them. And if/when it's not worth it, they can lateral to other firms, or go in house.