Lawyers are cashing in on a bonus bonanza

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Lawyers can expect to cash in on the bonus bonanza that’s been raining down on Wall Street, The Post has learned.

Signing bonuses for lawyers are at a record high — with some junior partners nabbing as much as $1 million to sign on at a new firm, according to legal recruiters. And younger lawyers at the rank of senior associate can rake in as much as $100,000 hiring bonuses.

“One-time bonuses to get people in the door are ramping up,” president and founder of legal recruiting firm The Artemis Group Nancy Zehner told The Post. “Signing bonuses are now prevalent — and in some cases, huge.”

The bonus gusher comes as the amount of work at some law firms has exploded, especially at outfits that work with Wall Street, which saw a record number of mergers and acquisitions in the wake of the pandemic. “Firms were pleasantly surprised to see their workflow escalate during COVID — and they desperately need people to do the work,” Zehner said.

The sign-on bonus is a relatively new phenomenon in the legal field, said Ru Bhatt, a partner at legal-recruiting firm Major, Lindsey & Africa. “Then in 2020 law firms had to start turning down projects since they didn’t have the bandwidth to get all their work done,” so they had to start paying up to attract new recruits.

lawyers
Junior partners are getting as much as $1 million to move firms.
Universal Images Group via Getty

When it comes to total compensation, a junior partner at a white-shoe firm can expect to make as much as $1 million, sources told The Post. So, an extra $1 million signing bonus — on top of the seven-figure base — can be quite the lure.

Meanwhile, first-year associates at a top firm like Davis Polk & Wardwell can expect to pull in $215,000 as a base salary — with a possible $20,000 end-of-year bonus, sources add. And senior associates — typically someone with five years of experience — can expect as much as $345,000 in base salary, with the possibility of a $90,000 end-of-year bonus.

The payout to lawyers comes after bankers in 2021 raked in their biggest bonuses ever — as much as 35% higher than the previous year. The dizzying workload bankers have faced — thanks to the spike in deals — has also kept lawyers working on those deals unusually busy.

But it’s not just incoming lawyers and bankers raking in record amounts of cash. It’s also the recruiters. Recruiters typically make a 25%-30% commission on a lawyer’s first-year salary, according to industry experts. In recent months, some law firms have started offering recruiters 50% commission on a lawyer’s salary in an effort to find enough qualified attorneys.

Most firms, recruiters told The Post, provide some kind of signing bonus for top candidates. But others are going a step further and offering across-the-board payouts for anyone who comes on board.

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Unlike top banks, some of the most prestigious law firms are offering employees flexible hybrid schedules.
LightRocket via Getty Images

Even smaller firms are shelling out big bucks. One midsize firm is offering $50,000 to any new signing associate who agrees to join for at least nine months, a source said.

Corporate finance and other areas of corporate law are in particular demand, industry insiders said. “The legal market follows the business market by about six months … so deal lawyers and others are still very busy,” Zehner said. “And New York courts have fully reopened which is keeping litigators hopping, too.”

Given the pressing need for help, law firms are also seeing new hires make their moves quickly: One source said she’ll see partners start at a new firm the day after they share news they’re leaving their old one.

Of course it’s not just about the money. Some lawyers are increasingly focused on flexibility — and banks are offering it as a way to compete for workers. And unlike big banks like Goldman Sachs that demand workers at their desks five days a week, top firms like Kirkland & Ellis and Simpson Thacher & Bartlett allow hybrid working.

One big law firm, Quinn Emanuel Urquhart & Sullivan, allows fully remote work.

 

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