The bonuses may have been big an growing in the past couple of years, but 2023 looks tougher with Big Law scaling back the bonuses as Baker McKenzie kicks off the bonus season with the first, publicly declared bonuses.
Baker McKenzie has agreed to pay its US associates end-of-year bonuses of up to $115,000 depending on seniority, beginning at $20,000 (£16,788) for those in the class of 2021 and increase up to $115,000 for its most senior associates.
Colin H Murray, North America chief executive officer at Baker McKenzie, said in a memo send to employees: “As 2022 is coming to a close, we would like to take this opportunity to thank you for your hard work and dedication on behalf of our clients and the firm. You are mission-critical to the outstanding service we provide our clients every day, and we are grateful for your contributions to our collective success.”
Many law firms, buoyed by strong M&A and other transactional work in the past years during the pandemic, now face the problem of potential or actual excess capacity, which will see bonuses either decline or fail to demonstrate the muscular growth previously experienced with Big Law firms.
Large law firms have been in something of a headlong rush to boost associate bonuses and salaries as the competitive nature of the firms exacerbated the demand for legal talent.
There were ‘special’ payments and other bonuses and employment emoluments designed to both retain and attract lawyers.
But things are changing as the 2021 boom eases and some firms are looking at now letting lawyers go, rather than continuing the bonus boom that prevailed previously.