Announcing 2022 Special Bonuses Forum

[Anonymous User]

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

I was bored this afternoon so I compared the number of 'deal & case' announcements made YTD on firm websites vs. the same period last year:

• DPW: 182 YTD 2022 -- vs. 438 YTD 2021 (58% drop)
• CSM: 53 YTD 2022 -- vs. 108 YTD 2021 (51% drop)
• Milbank: 73 YTD 2022 -- vs. 77 YTD 2021 (5% drop)

Obviously this is a very crude measure of firm revenue and profits — doesn't account for deal size; certain kinds of deals/cases are not publicized; etc. — but I think it is directionally accurate. Bottom line is that dealmaking activity is significantly reduced versus last year's SPAC boom.

Based on the numbers, perhaps Milbank is feeling less of a pinch right now than are DPW/CSM (DPW has a ton of cap-m exposure, right?). And so perhaps Milbank will take the lead on special & EOY bonuses.

[Monochromatic Oeuvre]

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

They've all reset their expectations. Davis Polk's PPP was $2.3M a decade ago. Now if they fell to $6.5M this year, it would be seen as a calamity and your bonus would be the first thing on the chopping block.

[Anonymous User]

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

They've all reset their expectations. Davis Polk's PPP was $2.3M a decade ago. Now if they fell to $6.5M this year, it would be seen as a calamity and your bonus would be the first thing on the chopping block.

This is exactly right, and with the markets tumbling, they're likely already thinking this way.

[wwwcol]

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

I was bored this afternoon so I compared the number of 'deal & case' announcements made YTD on firm websites vs. the same period last year:

• DPW: 182 YTD 2022 -- vs. 438 YTD 2021 (58% drop)
• CSM: 53 YTD 2022 -- vs. 108 YTD 2021 (51% drop)
• Milbank: 73 YTD 2022 -- vs. 77 YTD 2021 (5% drop)

Obviously this is a very crude measure of firm revenue and profits — doesn't account for deal size; certain kinds of deals/cases are not publicized; etc. — but I think it is directionally accurate. Bottom line is that dealmaking activity is significantly reduced versus last year's SPAC boom.

Based on the numbers, perhaps Milbank is feeling less of a pinch right now than are DPW/CSM (DPW has a ton of cap-m exposure, right?). And so perhaps Milbank will take the lead on special & EOY bonuses.

at the risk of stating the obvious, there’s only a rough connection between # of matters and billed hours. A 50% drop in matters might be a 20% drop in billables, because for various reasons you, the reader, know, if you’re working on fewer matters you often spend more time on them

[FF2020]

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

I was bored this afternoon so I compared the number of 'deal & case' announcements made YTD on firm websites vs. the same period last year:

• DPW: 182 YTD 2022 -- vs. 438 YTD 2021 (58% drop)
• CSM: 53 YTD 2022 -- vs. 108 YTD 2021 (51% drop)
• Milbank: 73 YTD 2022 -- vs. 77 YTD 2021 (5% drop)

Obviously this is a very crude measure of firm revenue and profits — doesn't account for deal size; certain kinds of deals/cases are not publicized; etc. — but I think it is directionally accurate. Bottom line is that dealmaking activity is significantly reduced versus last year's SPAC boom.

Based on the numbers, perhaps Milbank is feeling less of a pinch right now than are DPW/CSM (DPW has a ton of cap-m exposure, right?). And so perhaps Milbank will take the lead on special & EOY bonuses.

at the risk of stating the obvious, there’s only a rough connection between # of matters and billed hours. A 50% drop in matters might be a 20% drop in billables, because for various reasons you, the reader, know, if you’re working on fewer matters you often spend more time on them

Yes, but recoverables vary, too. If there are fewer announced matters, there are maybe another half that have started and then go no further. A lot of institutional clients get busted deal discounts on those (and also there's less to recover because you don't go the whole way with drafting/negotiation/signing/closing). And clients do budget spend based on deal size (even if that's not a great metric for likely complexity) - so if it's a dead deal and a smaller amount, there's likely a bit of wrangling internally and externally about writing off time.

[Anonymous User]

You guys really don't know how precipitous the drop has been - talking with other partners at a few v10s and v30s and large-cap deal work has fallen off by ~70%, midmarket is holding on but the WSJ-front page deals are down. Your Lathams and Kirklands will weather a bit better, the CSMs/S&Cs of the world may have a different story.

It's not sky-is-falling yet but realization, billables and attrition are substantially down, so the business case for large bonuses isn't as loud. Your top performers are staying busy but your good and mediocre guys are not going to be able to command retention bonuses and signon bonuses at other places.

If/when market improves at end of Q2/Q3, things may change, but it's a completely different narrative between Q1/Q2 2021 vs. 2022.

[Anonymous User]

At this point firms are very happy they had the foresight to make boni "special". It is what it is. At least we still have the increase in salary.

[Anonymous User]

Things have fallen and thank god. You couldn't breathe last year. That's not normal nor sustainable.

I'm okay letting go of my extra 50-60K or whatever it was now that I actually have evenings and weekends back. Of course, it'd be great to have weekends, evenings AND 60K, but I'm a realist and know those bonuses were just to keep us from rage quitting under the brutal conditions of last year.

Based on my partner's reactions, they honestly seem happy that things have fallen off. I think a lot of them were questioning whether it was all worth it last year with how miserable they and everyone else was.

[Anonymous User]

Things have fallen and thank god. You couldn't breathe last year. That's not normal nor sustainable.

I'm okay letting go of my extra 50-60K or whatever it was now that I actually have evenings and weekends back. Of course, it'd be great to have weekends, evenings AND 60K, but I'm a realist and know those bonuses were just to keep us from rage quitting under the brutal conditions of last year.

Based on my partner's reactions, they honestly seem happy that things have fallen off. I think a lot of them were questioning whether it was all worth it last year with how miserable they and everyone else was.

Completely agree. The base salaries have gotten so high it’s all about lengthening your Biglaw runway… on that note signing off for the night

[Anonymous User]

Bump for special bonuses ya!!!!

[Anonymous User]

So . . . special bonuses are definitely not happening, right?

Any chance that the EOY ‘22 bonuses will include the 20% kicker that DPW added in EOY ‘21?

[Anonymous User]

I wouldn't be totally surprised if Milbank gave us a 5k-10k salary bump, due to inflation. Assuming their financials are solid rn.

[Anonymous User]

So . . . special bonuses are definitely not happening, right?

Any chance that the EOY ‘22 bonuses will include the 20% kicker that DPW added in EOY ‘21?

I think this is more realistic than getting a special bonus. Firms treated it as a "kicker" to cover their asses in the event of a Great Recession style event (which, who knows, maybe we're in and don't know it yet). But barring something extreme like that, it'll be hard to walk back the end of year compensation given in '21.

My current expectation, which I'll adjust as things continue to evolve with the economy, is: (1) no special bonus; (2) year-end bonuses at the level (all-in) that were set in 2021; (3) moderate possibility of another round of salary increases (think like 10k-30k), announced year-end 2022 to take effect beginning of 2023 as a response to inflation. Given all the garbage happening abroad and at home right now, I don't think that'd be a bad set of outcomes by any stretch.

[Anonymous User]

Maybe today/tomorrow for an announcement before the (long) weekend? One can dream...

[Anonymous User]

Maybe today/tomorrow for an announcement before the (long) weekend? One can dream...

On what basis lol. The smart money is we're now going to go into a (hopefully mild) recession by 2023 as the Fed combats inflation. We're also coming through the other side of COVID so it's not like associates are locked down in their apartments demoralizing as they handle a dozen deals. Deal and cap markets work (which is what was driving special bonuses in the first place) is slowing, although it's still healthy. There are signs that the crazy lateral market is calming down too (although, again, it's not dead, just less frothy). We can all dream of Milbank just being irrational and saying "fuck it, we're still rich" and announcing but I think the odds are quite low right now.

[thisismytlsuername]

lmao, anyone holding out hope for this is nuts.

[cornerstone]

Can we stop reviving this thread and getting my hopes up?

[Anonymous User]

Can we stop reviving this thread and getting my hopes up?

Six months from now you will look fondly back on this thread as all the action is in a new thread titled "who got stealthed today because all the work dried up".

[woopig2017]

Can we stop reviving this thread and getting my hopes up?

Reviving this thread. Hearing rumors of special bonuses - anyone have any news?

[Anonymous User]

Pretty sure it’s a bogus rumor from non-equity partner on IG. Can’t imagine that’s going to happen in this climate.

My shop is slashing our 2023 summer class substantially. Doubt we are the only ones.

[TigerIsBack]

Pretty sure it’s a bogus rumor from non-equity partner on IG. Can’t imagine that’s going to happen in this climate.

My shop is slashing our 2023 summer class substantially. Doubt we are the only ones.

What firm - or general ranking, tier, etc.? How big of a cut in the size of the class are we talking?

[Anonymous User]

Pretty sure it’s a bogus rumor from non-equity partner on IG. Can’t imagine that’s going to happen in this climate.

My shop is slashing our 2023 summer class substantially. Doubt we are the only ones.

What firm - or general ranking, tier, etc.? How big of a cut in the size of the class are we talking?

Diff anon but I saw my V50 firm's targets for 2023 summer class and it's about 80% of 2022. But 2022 was uniquely large so it's in part a correction.

[glitched]

If a firm gave out summer/fall bonuses now... that would really be saying something. It would definitely signal that it's super strong and all the best associates would flock there. Bonuses during good times is obvious. Bonuses during recession? Mega baller energy.

[Anonymous User]

Pretty sure it’s a bogus rumor from non-equity partner on IG. Can’t imagine that’s going to happen in this climate.

My shop is slashing our 2023 summer class substantially. Doubt we are the only ones.

What firm - or general ranking, tier, etc.? How big of a cut in the size of the class are we talking?

Diff anon but I saw my V50 firm's targets for 2023 summer class and it's about 80% of 2022. But 2022 was uniquely large so it's in part a correction.

I saw my v10s targets as well for our office - the whole office did. About 60-75% of 2022 summers.

[Anonymous User]

Pretty sure it’s a bogus rumor from non-equity partner on IG. Can’t imagine that’s going to happen in this climate.

My shop is slashing our 2023 summer class substantially. Doubt we are the only ones.

What firm - or general ranking, tier, etc.? How big of a cut in the size of the class are we talking?

Anon from above. We are cutting by about a third. V25.