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Lawyer Pay

2 BigLaw firms flip-flop on associate special bonuses, agreeing to pay market rate

By Debra Cassens Weiss

January 6, 2025, 3:48 pm CST

Hogan Lovells and Perkins Coie have decided to pay special bonuses at the market rate of $6,000 to $25,000 after associates were initially told that they wouldn’t receive the money as a matter of course.

The special bonuses will be paid in addition to year-end bonuses ranging from $20,000 for the class of 2023 to $115,000 for the most senior associates, report Law.com and Above the Law, which published the new bonus memos here.

“It’s not the first time a firm has changed its mind about associate bonuses,” Law.com reports, “and it likely won’t be the last. Backlash from associates, concerns from partners about losing key associate talent, and peer firm pressure are just some of the reasons why a firm may reverse a decision when it comes to associate bonuses, according to legal industry observers.”

Hogan Lovells initially said it wasn’t paying routine special bonuses but it would give additional money to associates who exceed minimum hours. Now, it will pay special bonuses “on top of the other associate bonuses awarded,” a spokesperson told Law.com. “This means that many of our associates who qualify for the hours-based bonuses can earn bonuses above the announced scale of many other top firms.”

The spokesperson told Law.com that Hogan Lovells decided to match the market rate for special bonuses “following discussions with associates, partners and other stakeholders. An important part of our culture as a firm is that we listen, and we have made this decision after careful consultation.”

A Perkins Coie spokesperson told Law.com that its decision “is consistent with our commitment to paying market-competitive compensation and reflects the firm’s strong financial performance this year.”

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2 BigLaw firms reject routine special bonuses as several boutiques match or surpass market rate

By Debra Cassens Weiss

December 19, 2024, 11:00 am CST

Above the Law’s bonus tracker continues to expand, as an increasing number of boutique law firms announce associate bonuses that match or surpass market rates set by Milbank.

About 50 firms were on the bonus list when it was last updated Dec. 12, including nine boutique firms. At least five more boutiques announced bonuses since then, as chronicled in separate Above the Law posts.

One of them is Susman Godfrey, which “absolutely blows away the current market standard,” Above the Law reports.

Law.com and Law360 also have coverage.

The market rate for year-end bonuses is $15,000 to $115,000, while the going rate for additional special bonuses is $6,000 to $25,000. That makes the total bonus $21,000 for the class of 2024 to $140,000 for the class of 2016 and beyond.

Susman Godfrey is paying median bonuses ranging from $110,000 to $220,000. All 286 of the firm’s employees are also receiving bonuses.

Not to be outdone, midsize firm Boies Schiller Flexner previously announced that “multiple associates” at the firm are receiving bonuses of $1 million or more this year. In addition, “numerous associates” received above-market bonuses, including several who received $300,000 or more. The outsized bonuses are being paid to associates who opted for a bonus formula with a revenue-share component, rather than market-rate bonuses.

Other boutiques that have announced above-market bonuses include Selendy Gay (with combined bonuses ranging from $23,250 to $157,250) and Wilkinson Stekloff (with combined bonuses ranging from $28,500 to $197,500).

While above-market bonuses by those firms are “not a new phenomenon,” Law.com reports, the number of others offering “eye-popping bonuses appears to be growing.”

Boutique firms are in a better position to offer above-market bonuses because their overhead is lower than that of BigLaw firms, said Jeff Lowe, a Washington, D.C., recruiter with legal search company CenterPeak, in an interview with Law.com The pool of associates who will receive the bonuses is also smaller, Lowe pointed out.

Some BigLaw firms, meanwhile, are not falling in line with the standard special bonuses that range from $6,000 to $25,000, report Bloomberg Law and Above the Law (here and here). The latest firms that aren’t paying routine special bonuses are Perkins Coie and Hogan Lovells.

While Hogan Lovells isn’t paying the routine special bonuses, it will pay additional bonuses to associates who exceed minimum hours.

Other firms requiring an hourly minimum for special bonuses include Covington & Burling, Fish & Richardson, Katten Muchin Rosenman, Norton Rose Fulbright, Pillsbury Winthrop Shaw Pittman (paying “super bonuses” to high billers), Seward & Kissel and Sidley Austin, according to previous coverage.

Bonus decisions are being made amid a “muted” market for associates following talent wars in 2021, Bloomberg Law points out. Then came a period of cutbacks that brought some associate layoffs.

Now, firms are realistically looking at what they can afford, said Katherine Loanzon, a managing director at search company Kinney Recruiting, in an interview with Bloomberg Law.

“Firms just don’t feel the pressure anymore to follow,” Loanzon told Bloomberg Law.

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3. 2 BigLaw firms ‘fighting it out in the lateral…

Law Firms

2 BigLaw firms ‘fighting it out in the lateral market’ vote to merge

By Debra Cassens Weiss

September 9, 2024, 3:32 pm CDT

Partners at Troutman Pepper Hamilton Sanders and Locke Lord have voted to merge effective Jan. 1, 2025.

The new law firm will be called Troutman Pepper Locke, according to press releases here and here and stories by Law.com, Law360 and Bloomberg Law.

The combined firm will have more than 1,600 lawyers in 33 U.S. offices and two European offices in London and Brussels.

The firm’s new chair will be Tom Cole, chair of Troutman Pepper. Troutman Pepper Locke’s current revenues would give it a No. 28 ranking in the Am Law 100 list of top-grossing firms, according to a fact sheet.

The firms confirmed merger talks in April. Partners approved the merger Sept. 5.

Legal consultant Kent Zimmermann of the Zeughauser Group told Law360 that he proposed the merger early this year in his role as an adviser at Troutman Pepper.

Both firms were “fighting it out in the lateral market” because they both focus on the same six industry sectors, Zimmermann said.

“I would call it the most strategic law firm recombination in recent memory,” he told Law360.

According to a press release, the firms share practice strengths in industries that include energy, financial services, health care and life sciences, insurance and reinsurance, private equity and real estate.

There has been a lot of talk and concern about generative AI tools and how they are changing the legal industry.

A major worry for many lawyers is that these tools could replace them or make them redundant.

But what about the potential of generative AI to help lawyers generate business, market themselves more effectively, and make more money?

On this month’s episode of the Legal Rebels Podcast, Gyi Tsakalakis, founder of AttorneySync and EPL Digital and digital marketing expert, talks about how generative AI can help lawyers generate business and market themselves.