The yearly bonus season in the world of big law may not have too many picturesque displays this year, as firms are expected to soon announce additional pay for associates. While it is anticipated that top firms will likely follow the same bonus scale from the previous two years, reaching up to $115,000 for the most senior associates, the eligibility criteria these firms attach to such payments could prove a hurdle for some associates. Specifically, firms are expected to increase billable hour requirements and take factors such as office attendance into account.
According to Bloomberg Law, this adjustment to bonus eligibility comes amidst a slowdown in corporate work as well as job cuts in some firms. The report highlights that even those firms that laid off associates last year and experienced a dip in profits are likely to match the bonus scale, in an effort to demonstrate that they’re back to full strength.
Nevertheless, the rigid criteria attached to bonus payments may limit the number of associates eligible for these payments. Joshua Holt, a former Goodwin Procter lawyer, points out that firms can claim to pay ‘market rates’ even if not many associates qualify for those bonuses, particularly following a tough year for the firm.
Furthermore, the report suggests that lateral associate hiring has seen a near one-third decline compared to the same period last year. The limited “special” bonuses announced this year, such as those offered by Quinn Emanuel to high-billing associates, are therefore not likely to set a precedent followed by other firms, adds legal recruiter Kate Reder Sheikh.
The report further highlights the mounting pressures on major law firms in their attempt to match up with the industry’s leading names when it comes to associate salaries and bonuses. As a result, some firms might eventually reconsider trying to match the compensation offered by industry leaders such as Cravath Swaine & Moore.
Finally, the analysis points out that many associates, especially at the junior level, are off-track to meet the billable hours required for full bonus payments. This, in combination with office attendance requirements set by some firms such as Davis Polk & Wardwell, Simpson Thacher & Bartlett, and Sidley Austin, may create discontent amongst associates who may not fully meet these criteria, despite surpassing billing targets.