• Milbank LLP announced year-end bonuses ranging from $15,000 to $115,000 for associates.

• Big Law faces pressure to match these bonuses or offer additional compensation.

• With revenue up and deal activity ramping up, firms may bundle summer and year-end bonuses to stay competitive.

Milbank LLP announced it will pay associates year-end bonuses on a familiar scale, ranging from $15,000 for the most junior associates to $115,000 for the most senior. 

These bonuses mirror those offered by major law firms last year, raising questions about whether competitors will match Milbank’s rates or offer additional compensation to make up for missed summer bonuses, Bloomberg Law reports.

• Milbank’s move creates pressure for other Big Law firms to follow suit, especially given the firm’s strong financial performance this year. 

• “Milbank is having a record year, and we expect to be very busy through the end of the year,” said Chairman Scott Edelman in a firm-wide memo. 

Yet Unmatched Summer Bonuses

Earlier this summer, Milbank surprised associates with an extra set of “special bonuses” ranging from $6,000 to $25,000. 

• So far, other major firms have held back from matching those special payments.

• If firms decide to combine summer and year-end bonuses, associates could be taking home a total bonus between $21,000 and $140,000, depending on seniority. 

• Some industry insiders expect firms that compete with Milbank to roll the summer bonus amount into their year-end packages.

According to Ru Bhatt, a recruiter with Major, Lindsey & Africa in New York, other firms are likely to match Milbank’s bonus numbers. “For the firms that are competitive with Milbank, they’re likely going to put that special bonus number into the final bonus package.”

A Cautious Market and Revenue Growth

This announcement comes as the legal industry experiences significant revenue growth, though the market for associate hiring and lateral moves has slowed since record levels in 2021 and 2022. 

• Demand is up this year, but transactions work, a key revenue source for Big Law firms, has been slower for most of 2024.  Katherine Loanzon, managing director at Kinney Recruiting, noted that deal activity has picked up in recent weeks but remains uneven across practice areas.

• In this environment, firms are cautious about expanding associate ranks. “Firms are trying to do more with less at the associate level and just maximizing the efforts from their associates because we definitely saw a much slower lateral market this year,” Loanzon said. 

This focus on efficiency has left many associates reluctant to switch firms, choosing instead to stay put amid market uncertainties.

Competitive Pressures Amid Uncertain Bonuses

Milbank’s early announcement adds pressure on other top firms to respond decisively. Big Law firms typically aim to keep bonuses competitive to avoid losing top talent to other firms. 

But as Loanzon notes, the bottom line remains a priority, and firms may not be inclined to exceed last year’s bonus scale. “At the end, it’s the bottom line that really matters.”