Announcing 2022 Special Bonuses Forum

[Anonymous User]

Accepting a special bonus would be thievery in this economy. Thank you partners for putting a stop to this greed. Plus, as we all know, you lot are hanging around for the V10 prestige anyway

No special bonus, no RTO then, sorry. Need the special bonus for my Lambo payments…. Let the executive committee know that.

[Anonymous User]

Didn't a bunch of BB Wall Street banks just announce slow Q1s? (within the last ~week) Dealmaking (IB) revenue at JPM, GS, MS, etc. all fell relative to last year.

Is there any reason to think BL firms are seeing different dynamics in the market vs. the large banks? All in all, this makes me bearish on '22 special bonuses unless conditions dramatically reverse direction.

M&A work is significantly down this year. People who are busy must not do a lot of M&A.

Elon musk disagrees.

[AureliusCapital]

Didn't a bunch of BB Wall Street banks just announce slow Q1s? (within the last ~week) Dealmaking (IB) revenue at JPM, GS, MS, etc. all fell relative to last year.

Is there any reason to think BL firms are seeing different dynamics in the market vs. the large banks? All in all, this makes me bearish on '22 special bonuses unless conditions dramatically reverse direction.

M&A work is significantly down this year. People who are busy must not do a lot of M&A.

Elon musk disagrees.

What?

[Anonymous User]

Accepting a special bonus would be thievery in this economy. Thank you partners for putting a stop to this greed. Plus, as we all know, you lot are hanging around for the V10 prestige anyway

Troll better.

[Anonymous User]

Here's my shot at this:

Biglaw continues to rake in megabucks this year, some practices down others up but overall a strong year; the lateral market remains hot and attrition remains a problem; the economy stays robust and inflation cools off due to a good monetary policy response. On the back of this, a "special bonus" is announced in July, payable in September to provide maximum retention effect.

c/o 2021: $9,000
c/o 2020: $12,000
c/o 2019: $24,000
c/o 2018: $33,000
c/o 2017: $39,000
c/o 2016: $44,400
c/o 2015 and above: $48,000

(This sets up for an end of year bonus that will be around the same level as last year inclusive of incorporating the DPW special bonus into the scale with a mild bump for inflation, so call it ~20k for stubs - 150k for super seniors.)

[BrowsingTLS]

Here's my shot at this:

...

c/o 2021: $9,000
c/o 2020: $12,000
c/o 2019: $24,000

Do better. only 9k for first years? doubling from 12K for second years to 24K for third years?

[Anonymous User]

Here's my shot at this:

...

c/o 2021: $9,000
c/o 2020: $12,000
c/o 2019: $24,000

Do better. only 9k for first years? doubling from 12K for second years to 24K for third years?

Why would 1st years get a meaningful bonus at all? They aren't going anywhere, they have no skills, and biglaw firms can just hire more GW and WUSTL grads if their Virginia and NYU first years bail anyway.

[BrowsingTLS]

Here's my shot at this:

...

c/o 2021: $9,000
c/o 2020: $12,000
c/o 2019: $24,000

Do better. only 9k for first years? doubling from 12K for second years to 24K for third years?

Why would 1st years get a meaningful bonus at all? They aren't going anywhere, they have no skills, and biglaw firms can just hire more GW and WUSTL grads if their Virginia and NYU first years bail anyway.

If bonuses are payable in September 2022, going with the hypothetical post I was quoting, then the first year would have worked at the firm for about one year by September 2022. For their contributions, they deserve at least $10K in recognition from a market firm paying bonuses. The fact that the class of 2015 and above would receive only $48,000, when the class of 2019 receives 50% of that, is also odd.

Feel free to rebut, but keep things in perspective though. I am critiquing a flawed, hypothetical bonus structure. None of this even matters.

[Anonymous User]

Here's my shot at this:

...

c/o 2021: $9,000
c/o 2020: $12,000
c/o 2019: $24,000

Do better. only 9k for first years? doubling from 12K for second years to 24K for third years?

The post literally follows the same ratio from last year. Also that scale was totally orthodox and reflected standard biglaw perceptions about value add for the different levels of seniority. E.g., the doubling from second to third year is a feature not a bug. Hope that helps.

[Anonymous User]

Here's my shot at this:

...

c/o 2021: $9,000
c/o 2020: $12,000
c/o 2019: $24,000

Do better. only 9k for first years? doubling from 12K for second years to 24K for third years?

The post literally follows the same ratio from last year. Also that scale was totally orthodox and reflected standard biglaw perceptions about value add for the different levels of seniority. E.g., the doubling from second to third year is a feature not a bug. Hope that helps.

I’m going over the top with a 25% across the board increase and giving a $2,500 “welcome to law firm life” to the stubs —

[Anonymous User]

Here's my shot at this:

...

c/o 2021: $9,000
c/o 2020: $12,000
c/o 2019: $24,000

Do better. only 9k for first years? doubling from 12K for second years to 24K for third years?

The post literally follows the same ratio from last year. Also that scale was totally orthodox and reflected standard biglaw perceptions about value add for the different levels of seniority. E.g., the doubling from second to third year is a feature not a bug. Hope that helps.

I’m going over the top with a 25% across the board increase and giving a $2,500 “welcome to law firm life” to the stubs —

Don't get me wrong, I'd like that. As the guy who came up with the first scale, I took the average of the two spring / fall payments for last year and then applied a 50% multiplier. Seemed like a reasonable approach for a one-payment 2022 mid-year bonus, more than any one payment last year but less than the two payments combined given that 2022 also has seen a base scale increase. Realistically the bonus would probably start at 10k just for the PR value of it to avoid the weird 9k start point. And maybe depending on the firm that announced they'd try to come up with a more "chill, fratty" round-number scale without the weird intervals, so like:

c/o 2021: $10,000
c/o 2020: $12,500
c/o 2019: $25,000
c/o 2018: $35,000
c/o 2017: $40,000
c/o 2016: $45,000
c/o 2015 and above: $50,000

[Anonymous User]

Bump for special bonuses. Still waiting

[Anonymous User]

Bump for special bonuses. Still waiting

Read the room. M&A is down across the board from last year, the market is teetering, and while there’s still plenty of lateral hiring going on, big signing bonuses are already much more rare than in 2021.

I’m sure there are still plenty of associates getting smoked, but the pendulum has swung. Why would there be special bonuses this year? I think we’re more likely to see stealth layoffs than special bonuses in 2022.

[Anonymous User]

Read the room. M&A is down across the board from last year, the market is teetering, and while there’s still plenty of lateral hiring going on, big signing bonuses are already much more rare than in 2021.

I’m sure there are still plenty of associates getting smoked, but the pendulum has swung. Why would there be special bonuses this year? I think we’re more likely to see stealth layoffs than special bonuses in 2022.

Agree with this but only takes one firm to get the ball rolling if they think they aren't retaining as many associates as they need. It could even be framed as a one-time small bonus to help associates combat inflation. About 3-4% of base salary would be roughly equal to the spike in inflation compared to previous years, and keep purchasing power constant.

More likely than not though, I think no special bonus this year

[Anonymous User]

Read the room. M&A is down across the board from last year, the market is teetering, and while there’s still plenty of lateral hiring going on, big signing bonuses are already much more rare than in 2021.

I’m sure there are still plenty of associates getting smoked, but the pendulum has swung. Why would there be special bonuses this year? I think we’re more likely to see stealth layoffs than special bonuses in 2022.

Agree with this but only takes one firm to get the ball rolling if they think they aren't retaining as many associates as they need. It could even be framed as a one-time small bonus to help associates combat inflation. About 3-4% of base salary would be roughly equal to the spike in inflation compared to previous years, and keep purchasing power constant.

More likely than not though, I think no special bonus this year

I would love a bonus but I don't think it will work this way. If work is down, a lot of firms are going to be comfortable with letting Milbank be above market.

[Anonymous User]

Read the room. M&A is down across the board from last year, the market is teetering, and while there’s still plenty of lateral hiring going on, big signing bonuses are already much more rare than in 2021.

I’m sure there are still plenty of associates getting smoked, but the pendulum has swung. Why would there be special bonuses this year? I think we’re more likely to see stealth layoffs than special bonuses in 2022.

Agree with this but only takes one firm to get the ball rolling if they think they aren't retaining as many associates as they need. It could even be framed as a one-time small bonus to help associates combat inflation. About 3-4% of base salary would be roughly equal to the spike in inflation compared to previous years, and keep purchasing power constant.

More likely than not though, I think no special bonus this year

I would love a bonus but I don't think it will work this way. If work is down, a lot of firms are going to be comfortable with letting Milbank be above market.

I don’t think a lot of firms will be comfortable with someone beating the market. The question is if someone actually comes out to set a new market, which looks increasingly unlikely with every passing day that my Vanguard account gets smaller.

[Anonymous User]

We'll be lucky to get any bonuses this year.

https://www.law.com/americanlawyer/2022 ... se-growth/

Law Firm Profits May 'Plunge' This Year Amid M&A Slowdown and Expense Growth

Stifling expenses and a slowdown in transactional work during the first quarter could sink profit growth for the rest of the year, according to a new analysis of legal industry performance.

The Law Firm Financial Index (previously the Peer Monitor Index) published Monday found even robust demand growth during the first part of 2022 wasn’t enough to counteract a decline in M&A, a cooling in corporate work and nearly double-digit overhead and direct expense increases from last year.

The report stated “many market fundamentals remain strong,” including a three-year high in Q1 demand growth (2.7%), plus positive rates and productivity. But the quarterly composite score of law firm profitability declined for the third straight time, to 46—its lowest point since 2009.

Direct expenses were “the most notable” influence on that score, the report stated, increasing 13.1% after large bonuses and multiple associate pay scale increases went into effect. Overhead also increased 9.9% overall, on the back of staggering increases in recruiting (121.3%), business and marketing development (75%), office expenses (31.1%) and support staff benefits (13.4%), among others.

Along with inflation, which is currently outpacing the 5% billing rate growth in the industry, a 5.7% decline in M&A and a relatively cool 2.2% increase in corporate work, firm profitability is on “shaky” footing, said Bill Josten, strategic content manager for Thomson Reuters, which produced the financial index report.

“I’m usually loathe to talk about things like profits per equity partner, because it’s so prospective at this point,” Josten said in an interview. “But with all these things combined, if those trends persist throughout the year, that could have a very noticeable impact on the growth potential of profits per equity partner.”

The report noted that in addition to the 2.2% growth in corporate, real estate (7.9%) and labor and employment (1.0%) transactions also increased relative to Q1 last year, and litigation grew 2.2% compared with that period at the start of 2021.
The analysts have previously questioned whether the perpetual compensation increases during Big Law’s war for talent are sustainable, and they reiterated in Monday’s report that it’s “anyone’s guess” how long the cycle will last. Regardless, they wrote, the recent increases “will likely be felt for several quarters to come,” the report stated.

Josten noted that some of the overhead expenses dropped so precipitously during the pandemic that any type of recovery would show a large growth factor, and that on a dollars per lawyer basis, those expenses still hadn’t recovered to where they were leading into 2020.

They may not get all the way there, he added. But he noted they’ve still got room to grow even further. “I think that’s almost inevitable, that we’ll see increases in overhead expenses,” he said.

Josten said analysts will continue to key in on those costs, as well as the costs of talent and the trajectory of transactional work throughout 2022. The report concluded by noting there were multiple “anomalous” results calculated in this quarter, such as the triple-digit growth figure for recruiting expenses, that would have been excluded as outliers in previous versions of the report.

“Indeed, 2022 is setting some odd precedents, and indications are that we likely have not seen the last of these complex shifts,” the report stated. “If these trends continue unabated, law firm profitability growth could mirror the index’s downward plunge.”

[Anonymous User]

We'll be lucky to get any bonuses this year.

https://www.law.com/americanlawyer/2022 ... se-growth/

Law Firm Profits May 'Plunge' This Year Amid M&A Slowdown and Expense Growth

Stifling expenses and a slowdown in transactional work during the first quarter could sink profit growth for the rest of the year, according to a new analysis of legal industry performance.

The Law Firm Financial Index (previously the Peer Monitor Index) published Monday found even robust demand growth during the first part of 2022 wasn’t enough to counteract a decline in M&A, a cooling in corporate work and nearly double-digit overhead and direct expense increases from last year.

The report stated “many market fundamentals remain strong,” including a three-year high in Q1 demand growth (2.7%), plus positive rates and productivity. But the quarterly composite score of law firm profitability declined for the third straight time, to 46—its lowest point since 2009.

Direct expenses were “the most notable” influence on that score, the report stated, increasing 13.1% after large bonuses and multiple associate pay scale increases went into effect. Overhead also increased 9.9% overall, on the back of staggering increases in recruiting (121.3%), business and marketing development (75%), office expenses (31.1%) and support staff benefits (13.4%), among others.

Along with inflation, which is currently outpacing the 5% billing rate growth in the industry, a 5.7% decline in M&A and a relatively cool 2.2% increase in corporate work, firm profitability is on “shaky” footing, said Bill Josten, strategic content manager for Thomson Reuters, which produced the financial index report.

“I’m usually loathe to talk about things like profits per equity partner, because it’s so prospective at this point,” Josten said in an interview. “But with all these things combined, if those trends persist throughout the year, that could have a very noticeable impact on the growth potential of profits per equity partner.”

The report noted that in addition to the 2.2% growth in corporate, real estate (7.9%) and labor and employment (1.0%) transactions also increased relative to Q1 last year, and litigation grew 2.2% compared with that period at the start of 2021.
The analysts have previously questioned whether the perpetual compensation increases during Big Law’s war for talent are sustainable, and they reiterated in Monday’s report that it’s “anyone’s guess” how long the cycle will last. Regardless, they wrote, the recent increases “will likely be felt for several quarters to come,” the report stated.

Josten noted that some of the overhead expenses dropped so precipitously during the pandemic that any type of recovery would show a large growth factor, and that on a dollars per lawyer basis, those expenses still hadn’t recovered to where they were leading into 2020.

They may not get all the way there, he added. But he noted they’ve still got room to grow even further. “I think that’s almost inevitable, that we’ll see increases in overhead expenses,” he said.

Josten said analysts will continue to key in on those costs, as well as the costs of talent and the trajectory of transactional work throughout 2022. The report concluded by noting there were multiple “anomalous” results calculated in this quarter, such as the triple-digit growth figure for recruiting expenses, that would have been excluded as outliers in previous versions of the report.

“Indeed, 2022 is setting some odd precedents, and indications are that we likely have not seen the last of these complex shifts,” the report stated. “If these trends continue unabated, law firm profitability growth could mirror the index’s downward plunge.”

In conclusion Libya is a land of contrasts

[Monochromatic Oeuvre]

Unless the market really takes a giant shit in the next six months, it would be wild to see bonuses drop below the 2014 scale. And it would cause a significant exodus.

[hardrive6]

Anyone hearing anything? I presume it will just be year-end bonuses with the current state of the markets, but curious whether bonuses this year are expected to match the total bonus amounts paid last year or just be an amount equal to last year's year-end bonus plus the special year-end bonus (or some other formulation).

[temp69420]

Anyone hearing anything? I presume it will just be year-end bonuses with the current state of the markets, but curious whether bonuses this year are expected to match the total bonus amounts paid last year or just be an amount equal to last year's year-end bonus plus the special year-end bonus (or some other formulation).

Why at this point would you expect the year-end bonus to match last year's total or include a special year-end bonus? The whole point of calling them special was to make it easy to cut them. Profits are way down according to above article. Everybody in this thread will say it will increase attrition, and that's exactly the point.

[Wanderingdrock]

Anyone hearing anything? I presume it will just be year-end bonuses with the current state of the markets, but curious whether bonuses this year are expected to match the total bonus amounts paid last year or just be an amount equal to last year's year-end bonus plus the special year-end bonus (or some other formulation).

Why at this point would you expect the year-end bonus to match last year's total or include a special year-end bonus? The whole point of calling them special was to make it easy to cut them. Profits are way down according to above article. Everybody in this thread will say it will increase attrition, and that's exactly the point.

Firms - at least the top 20 or so - do not want to increase attrition. Attrition is already high. Not one group I work with is saying, "Gee, we've got too many associates, hope more quit as quickly as possible." If you're worried your payroll is too high in comparison to the work you expect to have over the next year or so, just stop hiring laterals (we haven't) and wait a few months.

I do not expect midyear bonuses but I do expect the EOY bonus to match last year's, including the "special" that got tacked on. When it hit my bank account it was all one EOY bonus and yeah, a bunch of us who have been working hard to support our partners' consistently record profits these past few years would be pissed to see the EOY bonuses effectively go down.

[BrowsingTLS]

Firms - at least the top 20 or so - do not want to increase attrition. Attrition is already high. Not one group I work with is saying, "Gee, we've got too many associates, hope more quit as quickly as possible." If you're worried your payroll is too high in comparison to the work you expect to have over the next year or so, just stop hiring laterals (we haven't) and wait a few months.

I do not expect midyear bonuses but I do expect the EOY bonus to match last year's, including the "special" that got tacked on. When it hit my bank account it was all one EOY bonus and yeah, a bunch of us who have been working hard to support our partners' consistently record profits these past few years would be pissed to see the EOY bonuses effectively go down.

Agree with all of this except that I expect we'll get a market bonus without the special bonus topping being guaranteed. Remember, firms deliberately structured the bonus last year as a bonus + a special bonus, rather than as a single bonus. It doesn't matter that it entered your bank account as one payment. For others who worded it the same it was two payments.

[Anonymous User]

Are we sure that the v25 firms (especially, DPW, CSM and Milbank) are having bad years?

[Anonymous User]

Doubtful there’s much if any slowdown in top 25; certainly none at mine. The third tier “consultants” in that shitty article have been predicting profit contraction for the last three years.