Milbank Stays Quiet as Big Law Bonus Season Revs Up (2)

All eyes are on Milbank LLP as Big Law’s annual bonus season heats up and associates at top firms await word on extra pay.

Wall Street’s Cravath Swaine & Moore on Tuesday said it would pay associates a pair of bonuses ranging up to $140,000, based on seniority. A handful of firms—Fried Frank, Paul Hastings, McDermott Will & Schulte, Dechert LLP, Ropes & Gray, and Cadwalader Wickersham & Taft—have since followed.

Notably quiet so far is Milbank, which has established a reputation as a first-mover on associate compensation in recent years. The Manhattan-founded firm in August doled out special bonuses ranging up to $25,000, which Cravath and others said this week they would add to year-end extra payments.

That has some associates holding out hope of a bonus war to drive up the total extra payments across leading firms. Many expect Milbank to hand out year-end bonuses that bring associates to the same level as at Cravath, but it wouldn’t be surprising if steps up its bonus scale, according to David Nicol, head of the US practice for recruiting firm Marsden.

“If any firm is going to raise Cravath, it’s going to be a firm like Milbank or a firm with a top-of-market M&A practice,” Nichol said.

Representatives for Milbank did not respond to requests for comment.

Large law firm revenue was up 11.7% through the third quarter, compared to the same period last year, according to a survey by Wells Fargo’s Legal Specialty Group. The demand is being fueled by litigation, employment, and infrastructure work, Wells Fargo said.

Strings Attached

Associates have to hit hours and sometimes other requirements at many firms in order to be eligible for bonus money. Certain firms are also dangling extra incentives for high billers.

Special bonuses at Fried Frank are offered to associates and special counsel who recorded a minimum of 1,850 hours (including billable, pro bono, qualified nonbillable, and “firm matter” hours), according to the Wednesday internal memo. The firm also said it would pay premiums on year-end bonuses—amounting to an extra $3,000 to $34,500—but the eligibility requirements were not immediately clear.

Bonus pre-requisites are becoming increasingly more common, according to Stephanie Biderman, an associate recruiter for Major Lindsey & Africa.

“That is a way to really just reward the most high performance associates,” Biderman said.

Dechert said Wednesday it will match Cravath’s bonus scale, but offer associates premiums as high as 40% for hitting 2,200 to 2,400 billable hours. Ropes & Gray requires associates to hit at least 1,900 “creditable” hours, but said it would up bonus money by as much as 150% “for those who have annualized materially more” than that amount.

Cravath did not specify any hours requirement for its associates to qualify for extra payments.

King & Spalding, meanwhile, wants its junior lawyers to log 2,400 “productive” hours per year. At least 1,950 of those hours must be billable work for clients for associates to qualify for annual bonuses. The firm has yet to issue end-of-year incentives.