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We're back, baby! After learning in September that legal salaries were on the rise, The New York Times' Dealbook blog reported Tuesday that BigLaw bonuses were on the rise.
The law profession if profitable! We'll be respected again!
So does this mean that it's time to get into the BigLaw business? Is law school suddenly a good idea for the disenchanted liberal arts major?
A Good Bonus -- If You Can Get It
Eh, not exactly. The Dealbook piece promises "bonuses from $125,000 to $150,000" at Boies, Schiller & Flexner -- but those are going to the most senior associates. Large New York firms are doling out between $15,000 and $100,000 to associates, "depending on their tenure," and that's "on average." (A range of $85,000 seems like a pretty big "average.")
Rather than "it's a great time to be a lawyer," it seems like it's a great time to be a senior associate. Even if "higher bonuses also reflect greater spending by companies" employing outside firms, that's a recurring symptom of the larger problem of overbilling. This problem is why law firm billing actually went down in the first place: Companies were tired of paying $800 an hour for white-shoe firms whose partners spent the day on the golf course.
Maybe that's unfair, though. As Dealbook points out, many of these firms' lawyers are working darn hard, but mostly they seem to be involved in expensive M&A deals, which are worth 49 percent more than last year, at $3.2 trillion. So really, if you're a senior associate at a prestigious New York law firm doing M&As, then you have reason to celebrate.
What About the Grunts?
Sources quoted by Dealbook, including David Lat of Above the Law, confirm that the bonuses are going to people in the top levels of seniority as rewards for bringing in, and retaining, high-value clients. So if you're a Greedy Junior Associate, you won't be making nearly as much. Although if ATL's Elie Mystal is to be believed, you'll be making more than first-year associates did a few years ago, when all the BigLaw firms cut the size of their associate bonuses.
Even though the recession has been technically over for a few years, law firms still haven't been billing as much as they used to. Whether those old billing numbers were bubbles and the recession was just a correction, it looks like law firms are definitely into spreading more money around.