Biglaw’s 2021 Bonus Blowout: How Much Are Associates Getting Paid?
September 26, 2022
In 2017, Biglaw gave out $1 billion in bonuses, with top performers receiving $200,000 or more. And 2018 could be even better…or it could be much worse. With the Trump tax cuts now passed and signed into law, bonus season has begun in earnest,
and that means an exciting year of discovery for attorneys who work in law firms! So let’s dive into what’s happening at the biggest law firms in the country and see how much they’re paying their associates—and what it means going forward!
Another strong year for top firms
Another year, another banner year for big law firms. For the most part, 2018 was a good year for most of the major firms. However, this is 2019, and it’s time to focus on what we’ve got coming up in the immediate future – starting with our next round of bonuses.
When it comes to analyzing how well a firm did in terms of associate compensation – one often thinks about hours billed or some other sort of quantitative factor like that.
These are useful metrics and they are important to keep an eye on. However, when it comes to associate compensation specifically, there is no point in debating how generous any particular firm is.
The best bonus opportunities exist at elite shops
The highest payouts are at elite Biglaw and most high-performing associates gravitate to these opportunities. What constitutes an elite shop varies, but at Am Law 100 firms, there is a pecking order from top to bottom. At the top of the food chain, firms such as Kirkland & Ellis ($180,000),
Skadden ($175,000), Latham & Watkins ($170,000) and Cravath Swaine & Moore ($165,000) enjoy perks that set them apart. They can offer their lawyers significant cash bonuses and full-year salary offers while other large law firms struggle to do so on any level.
What firms are underpaying or overpaying their associates?
In a Glassdoor blog post from January, legal recruiting expert Harrison Fisher lists average cash bonuses for 2020. Fisher predicts that average associate bonuses will be about $50,000 in firms under $1 billion in revenue and around $76,000 in firms with over $1 billion in revenue.
These numbers show us that Biglaw with under one billion dollars in revenue is paying substantially less than those with over one billion dollars. The American Lawyer released an annual report on Tuesday listing the top law firms by profits per partner.
This list had a mix of big names like Skadden Arps Slate Meagher & Flom and high-volume boutiques like Morgan Lewis & Bockius.
Is there room to negotiate with Biglaw in 2017?
It is possible to negotiate your pay at big firms in 2017, but it may not be easy. Big law firms will often play hardball with negotiations and may use threats such as changing your hours or promising a salary reduction if you reject their offer.
However, there are a few things you can do to get more out of the negotiation process. For example, research comparable salaries on sites like LinkedIn and Glassdoor to see what other lawyers are making at similar firms; request salary histories for lawyers in your position or those with equivalent qualifications;
and focus on ways to increase productivity rather than going for high hourly wages.
Biggest pay bumps at Am 200 firms
The Am Law 200 is a list of the top 200 law firms in the United States, as ranked by U.S. News & World Report. The goal of this survey was to see how much bonuses
these firms plan on paying associates by the year 2021 to assess how compensation is changing over time and in different geographic regions, as well as uncover regional differences and pay scales within the same firms across years.
In 2020, most of the Am Biglaw 200 firms are raising associate bonuses, with a reported 86% (146) of these firms raising their payout numbers by at least 10%. Similarly, they project significant growth between 2017 and 2019 (+8%), with only 27% reporting reductions to their payout number—the lowest percentage since 2008.
Notable overall ranking shifts from last year
At the end of the day, if you’re an associate who wants to make money, it seems that 2019 might be your year. No doubt there is a significant gap between associates who perform at various levels, but some firms have made the mistake of paying the same amount to junior and senior level associates.
For example, at JAMSIC & ASSOCIATES, we believe that effective performance is rewarded and through our unique compensation program we pay above-market salaries to those who meet or exceed expectations as well as have additional opportunities for higher-paid work.
But what if you are still not happy with your current salary? Consider making a lateral move where they compensate their associate lawyers better than many other large law firms on a national level.
The most lucrative of the rest
As it stands now, most firms have increased their salaries by 1.5% and 2%. Firms that typically adjust salaries less than annually (i.e., Proskauer) are giving a bit more, with raises averaging around 3%. But those who do not proactively account for increasing pay will not be able to match the industrywide adjustment—typically an annual benchmark.
Therefore, an associate at a firm without an updated salary scale would receive a raise of about $1,000 at the end of 2020 from what they would have made in 2019, assuming the same percentage increase across other firms.
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