Associate Bonus Watch 2010, Biglaw, Bonuses, Money

Pregaming the 2010 Law Firm Bonus Season

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Time is flying. Today is the first day of October. Fall officially started over a week ago. The Supreme Court Term starts up on Monday.

We all know what this means: law firm bonus season is just around the corner. In recent years, Biglaw bonuses have been announced as early as October. Cravath kicked off the 2007 bonus season by announcing bonuses on October 29 of that year — but that was a very different time, and the news that Cravath was in a rush to announce was good (a generous combination of year-end and “special” bonuses).

Last year, Cravath was also the first major firm to announce bonuses — on November 2, 2009. But the news was a far cry from 2007. Cravath bonuses for 2009 ranged from $7,500 to $30,000 — well short of the 2007 total bonus levels, which ranged from $35,000 to $110,000.

What can we expect of bonuses in 2010?

Bonuses are partly a function of business performance. And in terms of how Biglaw business is going, the general sense seems to be that even if it’s not back to 2007 levels, it has stabilized and even improved since late 2009. There’s no longer the same sense of impending disaster and panic that there was in 2009. Law firm layoffs have definitely slowed (or are taking place under the radar — feel free to send us your tips). A number of firms that instituted salary cuts or freezes to cope with the Great Recession have rolled back these measures and restored base salaries to pre-recession levels. Denizens of Biglaw seem to be busier, racking up more billable hours.

So one possibility is that bonuses in 2010 will be a little better than 2009 levels, but nowhere near 2007 levels. We suspect that improvement on last year would make many people happy. Expectations have changed dramatically since the heady days of NY to 190. As legal recruiter Gary Klein told Law 360, “In many law firms, bonuses are considered ‘You’re still employed.’ With tens of thousands of lawyers out of work, it would be remarkably rambunctious of an associate to raise bonuses in a conversation with partners.”

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Another possibility is that bonuses will remain largely unchanged (or even go down). The legal job market is still soft. If a firm offers disappointing bonuses, will associates or counsel head for the door? Probably not. Firms still have leeway to lowball lawyers if they want to, even if it might not be great for morale. (For advice on how to maximize your bonus, assuming you’re at a non-lockstep firm, see the Law 360 piece.)

Please discuss your 2010 bonus expectations in the comments. If you have solid information about bonuses at your firm, please reach out to us (via any number of communication methods). And please take our poll:

How will your 2010 bonus compare to your 2009 bonus?

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