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December 27, 2001
Bonuses Down at NY Law Firms
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First-year associates appear to be getting a bonus this year of up to $20,000, compared with $40,000 last year, according to the Times, which said it conducted an unofficial poll of several large firms that are usually industry bellwethers.
The amount of the bonus increases by $5,000 for each year of experience, topping out at $50,000, down from last year's top level of $100,000.
The lower bonuses are evidence that although law firms are generally viewed as buffered against economic conditions by the different kinds of work they do - when mergers slow down, bankruptcies usually pick up - they are feeling the effect of a slowdown over the last year.
Moreover, the giant bonuses awarded last year accentuated the falloff.
The overall drop in bonuses "reflects the fact that last year was truly an extraordinary year, and we felt that associates were entitled because they contributed a lot to that," said one partner at a large firm. "This year will probably not be an extraordinary year," the partner added.
But there is still bonus competition. It's the result of the "constant competition among the firms for talent," said Stephen Gillers, a law professor at New York University.
"A bonus has both real and symbolic value," he said, explaining that besides their monetary value, bonuses symbolize both the willingness of partners to share the wealth with junior lawyers and the confidence of partners in the financial health of the firm.
"Every second- and third-year law student and every associate is watching to see who gets paid what," he added.
Weil, Gotshal & Manges, which is representing the Enron Corporation in its bankruptcy proceedings, will pay first-year associates up to $20,000, as will several other firms. It will also pay retention bonuses of $11,900 to $19,800, based on lawyers' seniority.
Most disturbing to young lawyers in the world of big firms is the number and the size of some of the law firms that are paying less, even slightly less. Debevoise & Plimpton is paying both first- and second-year lawyers bonuses of $20,000, for example. The bonuses increase only for every two years of experience, rather than for every year.
To read the New York Times story, click here. Registration required.
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