But Are Law Firms Using A New Way To Reward Associates
Ben Thomson, LawFuel contributor
Following months of market uncertainty, the summer bonus season at BigLaw has exceeded expectations with Milbank’s announcing special bonuses ranging from $6,000 to $25,000 for associates, a cascade of firms has followed suit. But a new trend is also emerging in the way compensation is being handed to associates.
While partners enjoy increased PEP rates with premium work, the competitive world of associate recruitment is seeing some major changes in the way law firms handle the compensation for their top performers at associate level.
The summer bonus season is seeing that trend play out.
California boutique Hueston Hennigan, which has already rivalled the biglaw firms in the Cravath Scale stakes, raised the game further by announcing summer bonuses ranging from $10,000 to $30,000 regardless of class year.
The move from Hueston Hennigan may be the highest summer bonus scale announced to date. Associates tracking toward 2,700 hours will receive the maximum $30,000 bonus, while those on pace for 2,400 hours earn $20,000. Pretty attractive money, to say the least.
The bonus party began with boutique firm Vartabedian Hester & Haynes offering $5,000 bonuses to all attorneys and staff, followed by Otterbourg’s $15,000 summer bonuses for associates, and Milbank’s market-moving announcement
Salary Stagnation Amid Inflation Pressures
Despite the bonus activity, base salary increases remain elusive. Many BigLaw associates haven’t seen a base pay scale increase since 2023, with the current Cravath scale ranging from $225,000 to $435,000.
Law360 reports that inflation-adjusted associate salaries at large firms have fallen to a decade low.
The M&A market slowdown is dampening expectations for salary increases for associates. Despite deals activity ticking up nearly 19 percent in the first half of 2025, the growth has not been one that has excited firms despite the Republican election victory, particularly when M&A work remains the ‘engine room of (big law) firms’, as Michelle Fivel from Hatch Henderson Fivel was quoted in AbovetheLaw.
The Bonus Pay Outlook
The question that might well be asked now is whether law firms are using bonuses rather than base salary to manage associate retention.
Partners continue to enjoy major profits and PEP growth, as we have reported here in LawFuel, and there may be some strategic recalibration occurring in the ratio between partner profits and associate pay.
This approach allows law firms to maintain flexibility in uncertain economic times while still rewarding high performers. The emphasis on billable hour thresholds for bonus eligibility (typically 2,000+ hours) reinforces the industry’s focus on utilization and productivity metrics.
Geographic and practice area variations continue to influence the pay made by law firms. For instance, mid-sized firms are offering competitive packages with first-year associate salaries ranging from $155,000 to $200,000, compared BigLaw’s ratio of $215,000-$225,000 starting range.
The current compensation landscape reflects a maturing legal market where firms are balancing profitability pressures with talent retention needs. As bonus announcements continue through the summer, the industry will be watching whether this signals a sustainable compensation strategy or merely a temporary response to market pressures.
Who knows? We somehow think this is a trend likely to continue.
The race for legal talent remains intense in a competitive atmosphere, but the shift toward performance-based bonuses rather than across-the-board salary increases may become the new normal as firms find themselves dealing with economic uncertainty while maintaining their competitive edge in attracting top legal professionals.
