End of year bonuses for associate lawyers are at an all time high right now. Many firms, mostly Biglaw, are celebrating what has been referred to as “stunning” profits in 2020 and sharing the largesse with associate lawyers in the form of bonuses. Some of those bonuses are far in excess of $25K, paid out in increments, and additional money is being thrown at newly hired laterals, who are able to introduce the firm to other interested and highly-credentialed associate lawyers who then also become lateral hires. One of the Biglaw firms reportedly is valuing that effort to the tune of $50K as a type of finder’s fee.
It is all part of a current war for talent and the resulting hiring frenzy at law firms. If this sounds like good news to young lawyers, I am not surprised. That kind of money gets everyone’s attention, especially associate lawyers with law school debt hanging over their heads.
But, I encourage you to see it for what it is. This is not just the generosity of law firms. This also is a way to keep associates at the firms where they are highly leveraged and producing significant income for the firms. There is an expectation at law firms that the high billables among associates during 2020 can be repeated again in 2021, and the ching-ching sound is very appealing to law firm management.
The “golden handcuffs” of high salaries for associate lawyers has been recognized for decades. The “gold” clearly is the compensation, and the “handcuffs” represent the constraints that accompany that level of compensation in terms of the lifestyle it enables. That lifestyle can include big home mortgages, expensive club memberships, and other trappings of wealth.
But it does not have to be that way. If you are one of the recipients of the big bonuses and/or finders fees, think about how you use that money. If you spend it all on expensive cars, boats and extravagant vacations, you will find yourself unable to leave the money behind and exercise your free will in the event that the Biglaw experience does not work out for you.
Be smart. Be strategic. Plan for your future. See things for what they really are.
For more information on the two sides to this particular coin, see this article recently published on Above The Law.