Cravath just set the going rate for Big Law associate bonuses, and other firms are following. At up to $115,000, the payout is the biggest ever, but some junior lawyers expected even more.
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."No one's ecstatic about the new scale," said a corporate associate at an Am Law 10 firm in New York."Considering the amount of work that was done this year — should've been more." The associate and others who spoke with Insider asked to remain anonymous because they didn't have permission from their firms to speak.
Recruiters who place associates at Big Law firms said the bonus increases were expected, particularly in a year of prolific activity in firms' M&A and private-equity practices. Global M&A activity is expected to surpass the roughly $3 trillion in deal activity of recent years,
an October reportby S&P Global Market Intelligence said."The talent war is at an apex," said William Sugarman, the founder and president of the recruiting firm Astor Professional Search in Chicago.But recruiters said they were consistently seeing associates evaluating Big Law offerings beyond compensation. Young lawyers want concrete opportunities for career advancement, flexibility to continue working remotely, and better work-life balance in the long term. headtopics.com
"I've heard a lot of younger attorneys use the term 'sustainability,'" said Richard Rahaim, a recruiter at Howard, Williams & Rahaim in Florida."I've been doing this for 30 years, and this is the first time I've really seen that."
Jennifer Alvey, a career coach to lawyers in Nashville, said she’s seen an influx of inquiries from potential clients over the past year who aren’t satisfied by money."They are weary of being at constant beck and call. They can't plan for a weekend. They can't plan for even an anniversary dinner,” she said.
A corporate associate at Wilson Sonsini said they didn't think the bonus increase was that big, given"how busy the year has been and how bad inflation is." Wilson Sonsini has not said whether it will match the Cravath scale, but the firm has matched similar bonus scales in the past.
A closely watched gauge of US consumer pricesfrom October 2020 to October 2021, the Bureau of Labor Statistics said. That was the biggest year-over-year jump since 1990.Top banks have alsoin 2021.Partner profits have gone up faster than associate payWhile panic gripped the legal industry in the early days of the pandemic and led many firms to temporarily cut pay and partner draws, large law firms bounced back in 2020 and 2021 as a dealmaking frenzy kept lawyers busy. headtopics.com
With firms shrinking their offices, all but abandoning business travel, and laying off staff, profitability grew, too.Revenue jumped by 17% on average across the 50 highest-grossing US law firms during the first nine months of 2021 over the same period last year, a recent survey of more than 120 firms by the Wells Fargo Private Bank Legal Specialty Group found.
Though Big Law firms are paying their associates larger bonuses than ever, they're still bringing in bigger profits for their partners. To some associates, this feels unfair."It's an increase, but it still lags behind how much more partners have been making," said a midlevel corporate associate at a firm where equity partners made more than $3 million each last year. Junior lawyers at the firm are"more or less making the same as associates made in 2008, adjusted for inflation, while partner comp has doubled," said the associate, who is based in New York.
AnInsider analysispublished earlier this year found that partners at the top 10 US law firms had seen their profits surge by 85% over the past 10 years while associate salaries grew by only 44%.Accounting for inflation, the most junior lawyers make less than they did in 2008, data compiled by BigLaw Investor indicated. Associates with three or more years of experience make more today than they did before the financial crisis, however.
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