Is this the uptick law firms have been waiting so long for? After some good news about raises in bonuses for three major New York law firms, lifting year-end bonuses by as much as $40,000, there has been a resurgence in merger and acquisition work and something else: more confidence.
The news of bonus increases las year at Simpson Thacher, Paul Weiss and Cleary Gottlieb was welcomed not only by the associate lawyers, but also by others beyond just Wall Street who were seeing increased work and confidence beginning – hopefully – to pervade the depressed law business.
The WSJ Law Blog now reports that on Monday Cravath, Swaine & Moore LLP, a firm that often sets the standard for bonuses, announced that its associates would be similarly compensated. Those bonuses will be paid out on Dec. 19, according to an internal firm memo reviewed by The Wall Street Journal.
Undergirding the bonus boomlet: a modest uptick in confidence among law firm leaders.
Managing partners at major law firms displayed greater optimism about the economy—and about their firms’ prospects—in the third quarter of 2014, according to a survey released Tuesday by the law firm group at Citi Private Bank, a major lender to law firms. Law firm leaders indicated they plan to hire more junior lawyers, though some continued to worry that price-cutting could eat into profits:
Greater confidence in revenue growth, while expense projections remained steady, translated into increased optimism about profit growth. Confidence in demand growth was still strong, though more moderate than in 2Q’14, and despite stronger revenue projections, concern about discounting pressure grew slightly. While associate headcount projections increased, equity partner growth projections were more modest.
Earlier this month another law firm lender, Well Fargo Private Bank’s legal specialty group, also projected renewed vigor in the legal sector, noting that “2014 is shaping into a much better year than previous years.”
Read more at the WSJ Law Blog
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