While associates at big law firms might be riding high on their recent salary increases, a new report finds that their prospects for signing bonuses might be a little bleaker.
The report by legal support services provider Special Counsel found that signing bonuses for its law firm associate clients have declined since 2017. The data collected comes from 84 of the 617 placements made by Special Counsel who reported receiving a signing bonus through October of this year. Of those 84 placements, 37 associates were placed within Am Law 200 firms and 32 attorneys were placed within non-Am Law firms.
In 2017, the average signing bonus was $27,000 for associates, with the highest at $90,000. But in 2018, that number dipped to $17,000, with $60,000 being the highest signing bonus paid out this year, the data found.
This decline was most likely due to the associate salary increases that took place this summer, the report suggested.
“It’s not overall that surprising, since most of the larger firms raised salaries for the second time this year,” said Amanda Ellis, senior vice president at Special Counsel who leads its legal staffing and attorney search division, Parker + Lynch Legal.
In June, Milbank, Tweed, Hadley & McCloy announced that it would raise starting associate pay to $190,000, and fourth-through-eighth-year associates would receive $15,000 raises. Cravath, Swaine & Moore quickly upped the ante, going $5,000 and $10,000 beyond the Milbank scale for its midlevel and senior associates. A wave of increases at other firms followed.
But as Special Counsel looked firm by firm and placement by placement, a clear trend emerged.
“One thing that stood out was that several of the firms that did not match the Cravath-Milbank scale are the ones who are offering the higher end of the signing bonus,” Ellis said. “They’re the ones offering that $40,000 to $60,000 range versus the firms that are paying Cravath-Milbank scale.”
This is a trend that other legal recruiters are also taking note of.
“Some firms I advise are thinking about relying more on bonuses and less on salary increases in the leadup to a potential economic downturn, and due to the associate salary bubble that has developed,” said Kent Zimmerman, a law firm management consultant at the Zeughauser Group.
The data compiled by Special Counsel also showed how signing bonuses depended on the legal market where associates were placed. On average, candidates placed in Boston, Washington, D.C., New York, Chicago and Cleveland were likely to be offered a higher signing bonus than in other markets, Ellis said. However, Special Counsel did not breakdown the average signing bonuses for junior, midlevel and senior associates.
The data collected for the report will be available in Special Counsel’s January 2019 salary guide.