Comp News – The one-time pandemic bonuses that started out as a singular gesture of appreciation have multiplied and intensified into an industry-wide wage war between top law firms.
Whereas 2020 was a terrible year for many workers, 2021 is shaping up to be unprecedented amongst lawyers at top firms, with many now expecting to clear $164,000 in bonuses.
Bonuses soared to as much as $140,000 last year for a senior associate, and they’ve kept coming in 2021, with a potential windfall of $164,000 on top of salary by year end. Alongside the added cash, firms promised more time off and extended work-from-home arrangements, all part of an effort to retain and attract talent for what are often grueling 100-hour work weeks.
The boom in legal services comes after law firms had prepared for the worst last summer, in the wake of the coronavirus. Many firms cut salaries for lawyers and staff, while some furloughed their employees to get through what they thought would be a massive economic downturn.
Instead, 2020 turned into a windfall year for the industry’s top 100 law firms by revenue, which brought in almost $111 billion in revenue, up 6.6% from 2019 and the biggest increase since 2018, according to data from the American Lawyer.
The consequences of such massive compensation increases – as well as the normalization of working remotely – are reaching far beyond the “Big Law” circle.
The ripple effects are unusually being felt beyond just New York City and Silicon Valley — smaller firms and international firms now find themselves in a battle to keep pace with Big Law’s richest to keep their younger talent. Remote work options have complicated local salaries.
“The bonuses are more impacting the industry beyond the walls of what it typically has,” Eberhard said. “This has broken that barrier.”
Read the full story here.
For more comp news, see our recent posts.