EOY Bonuses? Forum

[washdc2012]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

[LittleRedCorvette]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Same.

[NoLongerALurker]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

[Wanderingdrock]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

Our industry is arguably a bit different from most, though, in terms of transparency of pay (few other industries have such uniformly widely available data on both the bosses' pay and the rank-and-file) and exit options together with existing attrition.

There are not many industries where you can look up on the internet what year your colleague - or practically anybody in a comparable position at a competitor - graduated and most likely know what they made for total compensation last year to within a few minor variations in benefits, and at the same time know that your bosses made an average of 19.8% more this year than last (or whatever).

And in terms of exit options, if anybody has the luxury of being an irrational economic actor about those, it's Biglaw associates who've paid off their debt and are shoveling most of a 300-500k (pre-tax) annual salary into savings. For us, a 10-20k difference in EOY bonuses COULD absolutely be seen as the insult that made us quit a few months or a year earlier than we might have otherwise - especially if recent hiring trends make us feel confident (justifiably or not) that our future options are good and could even include a return to Biglaw if we decide we made a mistake. I could totally see a not insignificant number of associates for whom the psychic blow of making 400k all-in instead of 415k while the partners are making $4 million drives them into an in-house position paying 300k, where the 415k would have kept them another year.

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

Our industry is arguably a bit different from most, though, in terms of transparency of pay (few other industries have such uniformly widely available data on both the bosses' pay and the rank-and-file) and exit options together with existing attrition.

There are not many industries where you can look up on the internet what year your colleague - or practically anybody in a comparable position at a competitor - graduated and most likely know what they made for total compensation last year to within a few minor variations in benefits, and at the same time know that your bosses made an average of 19.8% more this year than last (or whatever).

And in terms of exit options, if anybody has the luxury of being an irrational economic actor about those, it's Biglaw associates who've paid off their debt and are shoveling most of a 300-500k (pre-tax) annual salary into savings. For us, a 10-20k difference in EOY bonuses COULD absolutely be seen as the insult that made us quit a few months or a year earlier than we might have otherwise - especially if recent hiring trends make us feel confident (justifiably or not) that our future options are good and could even include a return to Biglaw if we decide we made a mistake. I could totally see a not insignificant number of associates for whom the psychic blow of making 400k all-in instead of 415k while the partners are making $4 million drives them into an in-house position paying 300k, where the 415k would have kept them another year.

But it's not enough for just some associates to leave. The problem with bonuses is that you pay both the ones who might have left and the ones who would have stayed either way. And the partners may believe that the ones that were going to stay were the good ones (I tend to think they're right, but all that matters for whether they pay up is what they believe).

And the economy is slowing down. Some attrition from lower bonuses plus rto is probably for the best.

[Anonymous User]

Anyone think they might go down? Market is super slow and it seems a ton of deal groups (anecdotally heard from my banker friends as well) aren’t as busy, with plenty of rate hikes to come that may slow it down further.

I was on a good annual hours pace but it’s almost like things have slowed down overnight.

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

The bonuses grow as the money grows, it's that simple. Citing to general trends in compensation inequality among wagies who often have a tenuous at best relationship between the work they do and "profits generated" is very different from what associates represent, which is direct profit into the firm net comp. and overhead. As the partners make more money (on the backs of associates) they feel freer to share some of those spoils with the associates, recognizing there is a symbiotic relationship going on. Any partner actually involved in comp. decisions will talk like this, and not the weird esoteric economic analysis that your post is attempting to do. This place sometimes twists itself in such odd ways to justify its bizarre perspectives.

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

The bonuses grow as the money grows, it's that simple. Citing to general trends in compensation inequality among wagies who often have a tenuous at best relationship between the work they do and "profits generated" is very different from what associates represent, which is direct profit into the firm net comp. and overhead. As the partners make more money (on the backs of associates) they feel freer to share some of those spoils with the associates, recognizing there is a symbiotic relationship going on. Any partner actually involved in comp. decisions will talk like this, and not the weird esoteric economic analysis that your post is attempting to do. This place sometimes twists itself in such odd ways to justify its bizarre perspectives.

The twisting is thinking that the relationship is symbiotic. You're an employee, no different from somebody working a cash register at McDonald's, and if anything associates are even more temporary. Firms pay just as much as they have to.

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

Gibberish

[Anonymous User]

A lot of biglaw firms are down 25%+ on Q1 2021, especially the M&A shops. We're about to hit a global recession later this year which will last throughout 2023. Wake up if you think they'll keep throwing special bonuses at you indefinitely after all the recent base salary raises. I'm a V20 partner for what it's worth.

[Anonymous User]

.

[becodalapa]

We're about to hit a global recession later this year which will last throughout 2023.

TLS posters, like economists, have predicted nine out of the last five recessions.

[Anonymous User]

If there are no special mid-year bonuses, what do we think will happen with EOY bonuses? Will they stay the same, include the "special" EOY bonus from last year, and/or go up? Thoughts?

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

The bonuses grow as the money grows, it's that simple. Citing to general trends in compensation inequality among wagies who often have a tenuous at best relationship between the work they do and "profits generated" is very different from what associates represent, which is direct profit into the firm net comp. and overhead. As the partners make more money (on the backs of associates) they feel freer to share some of those spoils with the associates, recognizing there is a symbiotic relationship going on. Any partner actually involved in comp. decisions will talk like this, and not the weird esoteric economic analysis that your post is attempting to do. This place sometimes twists itself in such odd ways to justify its bizarre perspectives.

The twisting is thinking that the relationship is symbiotic. You're an employee, no different from somebody working a cash register at McDonald's, and if anything associates are even more temporary. Firms pay just as much as they have to.

Wrong and the fact that you think this shows how clueless you are about how the model runs. It's obvious you've never interacted with the people doing the actual comp. committee work at your firm or any other one. Also, the level of self-hatred at this place is hilarious, assuming you're actually in biglaw and not just some washout who's LARPing.

[Anonymous User]

A lot of biglaw firms are down 25%+ on Q1 2021, especially the M&A shops. We're about to hit a global recession later this year which will last throughout 2023. Wake up if you think they'll keep throwing special bonuses at you indefinitely after all the recent base salary raises. I'm a V20 partner for what it's worth.

Make sure you help the partnership through the difficult period ahead where they'll be decreasing their equity compensation by 25%. Wait, what's that? Profits per partner are still growing? Wow, what an economic miracle.

[Anonymous User]

Hope I’m wrong but I think we are back to “normal”. No special bonuses, and EOY consistent with the non-special column last year

There's zero way this flies at least in the V25. Profits have grown too much to permit that.
The baseline minimum this year will be same as last year EoY inclusive of the "special EoY bonus" kicker that Davis Polk added in. I also fall into the camp that thinks we're going to get a mid-year special bonus though that's more uncertain. Anyone not demanding this as a base expectation (stable bonuses vs. last year) is being played for a fool; biglaw profitability has increased by eye-watering amounts in the past twenty-four months and even if things "slow down" they'll be stabilizing at a far higher base than they were before COVID.

Exactly

If firms don’t properly compensate, watch another wave of massive attrition

That's not how any of this works. Contrary to the whining on this board, associates don't quit because they're sad that the partners are making more money, they quit because they have a better option. And the partners don't pay bigger bonuses just because they're making more money, they pay what they need to to retain employees.

None of that is to say there won't be bonuses or even raises, but the idea that somehow the associates will all just decamp because they're insulted is a pretty poor understanding of economics. As an example, executive pay and inequality have been rising overall across the economy for decades -- executive pay has grown far faster than median wages. But it's not like all the employees then quit those firms because they're angry.

The bonuses grow as the money grows, it's that simple. Citing to general trends in compensation inequality among wagies who often have a tenuous at best relationship between the work they do and "profits generated" is very different from what associates represent, which is direct profit into the firm net comp. and overhead. As the partners make more money (on the backs of associates) they feel freer to share some of those spoils with the associates, recognizing there is a symbiotic relationship going on. Any partner actually involved in comp. decisions will talk like this, and not the weird esoteric economic analysis that your post is attempting to do. This place sometimes twists itself in such odd ways to justify its bizarre perspectives.

The twisting is thinking that the relationship is symbiotic. You're an employee, no different from somebody working a cash register at McDonald's, and if anything associates are even more temporary. Firms pay just as much as they have to.

Wrong and the fact that you think this shows how clueless you are about how the model runs. It's obvious you've never interacted with the people doing the actual comp. committee work at your firm or any other one. Also, the level of self-hatred at this place is hilarious, assuming you're actually in biglaw and not just some washout who's LARPing.

What firm does this bro work at? They got some kickass koolaid. Must be spiked with the good shit.

Why do some firms have $5m+ PPP and others hardly $1.5m and yet they still pay the same? They pay what they can but nothing more, and anybody else thinking they can share in the profits is letting the partners play them for a sap.

Most associates are just replaceable cogs who will be gone in 3-6 years. That's how the model runs. Partners don't feel some symbiotic comradery with associates. Partners don't think their clients pay them because of the associates are somehow worth it. Those ideas are ludicrous. You do mindless work for THEIR clients. That's how partners think. Partners see you as giving them a commodity, and they will pay you the lowest amount they can to get it. Period.

[Anonymous User]

All that matters is what Millbank/DPW/Cravath do. Will these firms really pay less than last year (including the "special" bump), absent a major recession in the next few months?

[Anonymous User]

All that matters is what Millbank/DPW/Cravath do. Will these firms really pay less than last year (including the "special" bump), absent a major recession in the next few months?

I'm pretty sure these three firms are still growing, don't have insider knowledge tho.

[Anonymous User]

All that matters is what Millbank/DPW/Cravath do. Will these firms really pay less than last year (including the "special" bump), absent a major recession in the next few months?

I'm pretty sure these three firms are still growing, don't have insider knowledge tho.

Growth is also irrelevant so it's fine you don't know. The question that actually matters: what's it like for the boots on the ground at Milly/DPW/CSM? Hours still high? People still leaving in droves? Short staffed? If not, I suspect comp has settled down.

[Anonymous User]

I think unless the economy/market truly tanks, then the "minimum" baseline expectation will be no special bonus, but year-end bonus increased to make the total compensation for 2022 match 2021, taking into account last year's special bonuses and this year's round of base salary raises.

[Anonymous User]

It's been a few months. Anyone heard anything new/speculation about EOY bonuses?

[Crazystallion]

If someone not on partnership track, biglaw, what size, if any, of end of year bonus? 2 years in.

[Anonymous User]

It's been a few months. Anyone heard anything new/speculation about EOY bonuses?

I'm in the "it's way too soon to tell" camp. This is one of those years where I feel like the partnerships that matter (DPW, Cravath, Milbank in particular) are going to wait until deep into Q4 to make decisions about bonuses because they want to squeeze as much certainty as they can out of an inherently uncertain time. Meaning no one wants to precommit to paying 150% of last year or God forbid a 10% haircut on last year or whatever until they have to based on the best available economic data.

This isn't like 2018 or 2019 where things were just humming along or 2020 or 2021 where there was a perception that you had to come over the top on compensation because of the combination of extreme work + COVID quitting. Biglaw hasn't been in an environment like this for a long time; maybe like the first couple years after ITE where partnerships were trying to figure out if things were back to "okay" or not? There's your dose of speculation.