Bonus Expectations

This is the latest in a new series of ATL infographics — visual representations of our own proprietary data, relevant third-party data, “anecdata,” or just plain jokes. This infographic is brought to you by our friends at Prestige Legal Search. Earn another $5,000 to $50,000 with their Rewards Program.

For the most part, Biglaw associate bonuses remain stuck at last year’s levels, reflecting expectations that firm profits will be flat at best. This might seem fair, with everyone feeling the pinch of the “New Normal” and so on. But when we take a small step back and see how these bonus numbers compare as a percentage of partner profits to the bonuses of just a few years ago, these bonuses are arguably pretty measly.

The current $10,000 “market” (i.e., Cravath-following) rate for first-years is just 0.29% of Cravath’s profits per partner (according to the American Lawyer). Back in 2007, first-year bonuses equaled 1.36% of PPP. In other words, the Cravath partnership was nearly five times more generous to its associates back then.

Obviously, Cravath is among the most profitable firms in the world. What are the implications of matching Cravath’s bonus scale for those firms with much lower profit margins? Today’s infographic takes a look at how big a hit to PPP partners willingly take in order to Keep Up With The Cravathians….

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Last week, we asked our associate readers to tell us how their billable hours were shaping up in 2012 so far. The results are in, and partners and associates alike may be glad to learn that things seem pretty normal.

I mean, if you didn’t know that there hasn’t been a salary raise for five years, or that bonuses are now paid in Amex gift cards, you’d say that associate billables had achieved a happy balance.

Some people are working very hard, some people are slacking off, and most people are somewhere in the middle, keeping their heads down but not trying to be heroes…

double red triangle arrows Continue reading “The Hours Results: A Return To Normalcy”

It’s June already. Can you believe it? Time sure flies when your wife is pregnant and you have just a few more months to completely reorganize your life into something resembling “serviceable.”

As we approach the midway point of the year, we figure it is a good time to check in on how our readers’ billable hours are looking. Given how low the Cravath bonuses were, and the fact that most firms decided to not pay spring bonuses, one would expect that associates in Biglaw have responded by working as little as possible. Nothing says “you did not share the wealth” like a few months of bare-minimum billing!

I’m joking, of course: associates couldn’t band together to organize a work slowdown any more than a herd of stray cats could go wildebeest hunting. In fact, one of the reasons firms can low-ball bonuses with impunity is because associates are more afraid about losing their jobs to the masses than they are about competing for the highest compensation.

We expect associates are still busting their tails in 2012. But let’s share some horror stories, and take a poll to confirm those suspicions…

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Last week, we asked you to report on how many hours you were on track to bill in 2011. Well, the results are in, and damn, people out there in Biglaw have been working like dogs.

I hope there is a big bonus payoff for all the hours people have been billing.

I also hope that people are still finding time to live their life. One commenter disturbingly said, “I’m currently at 2650 for the year. I was hoping to get to 3000 by year-end, although it will be a stretch.”

I think that this commenter is bragging that he’s on pace to kill himself. But all around Biglaw, people are putting in time…

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We’re doing this a little bit late this year. We’re into the fourth quarter and we haven’t yet asked you guys: how many hours are you on track to bill this year?

It’s an important question.

Remember firm leadership has already started trying to manage expectations about 2011 bonuses.

And between the natural inclination to keep as much money as possible and prudent concerns over a double-dip recession, many firms will want to hold the line on associate bonuses.

But that’s going to be harder to do if people have been busting their tails…

double red triangle arrows Continue reading “The Hours Open Thread: How Are Your 2011 Billables?”