Ben Thomson, Senior LawFuel editor
In a twist that’s got the legal world buzzing, BigLaw’s bonus season is serving up some serious drama but the twist in the bonus tale is the boutique law firms that are flashing cash like it’s going out of style, while a few heavyweight players are giving the cold shoulder to those oh-so-expected special bonuses.
Boutique firms are stealing the spotlight, showering their associates with bonuses that would make even the most jaded lawyer’s jaw drop. Susman Godfrey, #1 in our list of leading boutique law firms, is leading the pack, dishing out median bonuses that range from a cool $110,000 to double that figure.
The boutique firms are strutting their stuff, flashing cash like it’s going out of style. They’re the new kids on the block, turning heads and making the old guard sweat.
Not to be outdone, Boies Schiller Flexner, who recently elevated five to the partnership, is rumored to be handing out million-dollar bonuses to a small clutch of “multiple associates,” with several others pocketing $300,000 or more. Selendy Gay and Wilkinson Stekloff are also joining the bonus bonanza, offering combined payouts that could make a BigLaw partner blush.
BigLaw’s Bonus Bluff
But back in BigLaw not everyone’s feeling so generous. Perkins Coie and Hogan Lovells have decided to buck the trend, saying “thanks, but no thanks” to those routine special bonuses that range from $6,000 to $25,000, according to a report from Bloomberg Law.
It’s like they’re playing a different game altogether. Many firms are offering higher bonuses for exceptional performance or high billable hours instead of across-the-board special bonuses, while others are sitting on their hands to assess their position financially and how the bonus lay-of-the-land looks.
The bonus payouts are being tailored to meet the market, the law firm situation and other protocols laid down by the law firms.
Hogan Lovells, though, is throwing a bone to its hardest workers, promising extra cash for those who clock in more hours than a barista during finals week. Other firms like Covington & Burling and Sidley Austin are also making associates sweat for their extra dough, tying bonuses to billable hours like it’s some kind of legal Hunger Games.
So why the split personality in bonus land? Boutiques, with their lean and mean operations, can afford to splash the cash without breaking a sweat.
BigLaw, on the other hand, is feeling the pinch after the talent wars of 2021 and subsequent layoffs. Their strategies are changing on the bonus season.
As Katherine Loanzon (pictured) from Kinney Recruiting puts it, firms are taking a hard look at their wallets and deciding what they can actually afford. It’s like watching a group of friends decide where to eat dinner, except instead of choosing between pizza and sushi, they’re deciding whether to hand out six-figure bonuses.
In the glittering world of BigLaw, where money once flowed like champagne at a Gatsby party, a curious shift is underway as the routine special bonuses, once as predictable as a lawyer’s billable hours, are disappearing.
The changes is due to a cocktail of economic sobriety and strategic maneuvering, partly due to the money paid out by the elite boutiques.
Firms are playing a long game, realizing they don’t need to jump every time a competitor throws a bonus bone. They’re crafting bonus structures as unique as bespoke suits, tailoring them to fit their own strategies like a glove. They are often delaying their bonus payment decisions for a variety of reasons, both financial and strategic, rather than jumping into the bonus payment pool in lockstep with others.
And let’s not forget the ghosts of bonuses past. Some firms that once danced the bonus tango with abandon found themselves with two left feet when the music stopped. Now, they’re sitting this one out, nursing their financial hangovers and vowing never again.
It is to the partners that is seeing the real money flow these days. The new arms race isn’t about associates; it’s about those rainmaking partners who can make it pour profits.
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Kinda intrigued by Perkins Coie and Hogan Lovells deciding to skip out on the bonus trend. It’s a bold move, but I wonder how it’ll play out for retaining their talent. The legal industry’s super competitive, and those bonuses are a big perk.
do you think this will start a trend where more firms opt out of bonuses, or is it just these two going rogue?
This is exactly what’s wrong with big firms. They keep raking in profits but can’t bother to shell out bonuses? Not cool, Perkins Coie and Hogan Lovells. Absolutely showing their true colors here.
Interesting article, Ben Thomson. It’s refreshing to see that not all firms jump on the bandwagon without considering what’s truly beneficial for their firm’s long-term success. Shows that Perkins Coie and Hogan Lovells are perhaps prioritizing sustainable growth over short-term gains.