Bonus babies

12 December 2011 By Reynolds Holding

Despite rising revenue, the big U.S. firms held year-end bounties to 2010 levels. That may reflect a junior-lawyer glut, routine-task outsourcing, client-forced savings – and some firm-owner greed. Legal grunts aren’t hurting, but the days of lavish perks and pay may be waning.

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Year-end bonuses for associates at the biggest U.S. law firms generally remained at last year’s levels, despite rising profits. They ranged from $7,500 for first-year lawyers to $37,500 for seventh years at Cravath Swaine & Moore, Skadden Arps Slate Meagher & Flom and other Wall Street firms.

The amounts were about the same as in 2010 and only slightly higher than in 2009, when they hit a post-meltdown low. In the boom year of 2007, they were about $60,000 for seventh years. The starting annual salary is $160,000 for associates at the biggest firms and about $265,000 for the most senior associates.

Meanwhile, profits per partner for the first six months of 2011 rose 3 percent at the nation’s 125 largest law firms, according to a survey by Wells Fargo Wealth Management. At firms with profits per partner of at least $1.8 million, the increase was 7.6 percent.

At Cravath, the first big firm to announce associate bonuses, profits per partner were about $3.17 million in 2010, up from $2.7 million in 2009, and were expected to increase again this year, according to The American Lawyer magazine.

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