The six-figure club: Associates at elite US legal firms set for bonus boom
More than 60 per cent of UK workers aren’t expecting a Christmas bonus this year, but that’s not the case for City lawyers, some of who will receive generous six-figure payouts.
Many US law firms operate under the Cravath Scale, named after the law firm Cravath, Swaine & Moore, a transparent lockstep system of associate compensation based on years of post-qualification experience.
This year, associates at Cravath, Swaine & Moore will receive payouts up to $140,000 (£104,000).
The firms’ associates will get year-end bonuses ranging from $20,000 for the class of 2024 to $115,000 for the class of 2018 and earlier, as well as special bonuses ranging from $6,000 to $25,000.
While the most senior associates at Milbank will receive $115,000 in year-end bonuses, the most junior will see a $15,000 bonus in their end-of-year pay package.
As competition in the legal market intensifies on both sides of the Atlantic and hourly fees continue to rise amid major changes in the sector, bonuses have taken on heightened significance, as lawyers are increasingly becoming the new bankers.
Rise of the six-figure ‘super bonus’
However, across the Atlantic, according to the Financial Times, Cahill Gordon & Reindel, which uses above-market bonuses, has announced total bonuses for associates worth up to $315,000 (£233,000), including a “super bonus” of up to $200,000 (£148,000) for top performers.
Associates at Elsberg Baker & Maruri will be paid bonuses of up to $226,250 (£167,000). Katten Muchin Rosenman will pay out as much as $172,500 (£128,000) to the top performers, plus undisclosed “superstar bonuses”.
Last month, it was announced that senior associates and counsel at City-based Pallas Partners will receive as much as $232,000 (£172,000) in bonuses this year in its London and US offices.
Bonuses serve as more than just a tool for retaining top legal talent; they are also used as incentives, as shown earlier this year by Shoosmiths, which handed out an extra £1m in bonuses after staff hit the firm’s annual target for one million Microsoft Copilot prompts.
However, junior lawyers at leading City law firms regularly work well beyond standard hours, with many firms reporting that their youngest staff routinely put in over 12-hour days, according to research earlier this year.
These firms will also expect their best performers to reach or exceed 2,000 to 2,500 billable hours over the financial year.