Big Law hedges associate bonuses to protect partner profits

Milbank LLP is cementing its position as a first mover on associate compensation, even as the latest round of year-end bonuses shows softness in the market for junior lawyers.

At least five major law firms this week moved to match a pair of bonuses topping out at an extra $140,000, and several competitors are expected to follow. The bonuses previously were announced by Milbank, marking the second straight year that the Manhattan-founded firm has been first out of the gate with the extra payments.

That may give Milbank a branding boost, but the stagnant scale for year-end bonuses exposes a shift among top firms toward cutting costs and protecting partner profits as revenue surges.

“Everyone is worried about profitability,” said David Nicol , head of the US practice for recruiting firm Marsden . “Firms across the board will realize that they’re having a great year, but that the costs are huge.”

Big Law’s annual bonuses scale, ranging up to $115,000 based on seniority, hasn’t moved since 2021. The new announcements include additional special bonuses of up to $25,000, which Milbank unveiled in August. Separating the bonuses gives firms cover to stick to last year’s numbers going forward.

“This is firms deciding to split the difference,” said Kate Reder Sheikh , a recruiter for Major, Lindsey & Africa . “That feels like a safer bet than increasing the scale, which then sets precedent that it’s going to be the scale again next,” she said.

Mass Tort Lawyers Trapped in Cycle of Debt as Cases Drag On

Mass tort lawyers and their investors have a problem : Some huge cases are taking longer than expected to pay out as they hunt for the next big one.

Two of the largest multi-district personal injury cases show little sign of resolving soon after running for years. Johnson & Johnson’s multiple attempts at bankruptcy have delayed an $8 billion settlement for claims alleging its talc products cause cancer. A split among courts handling litigation against Bayer over the pesticide Roundup means the US Supreme Court may step in.

High-interest loans that law firms behind those cases use to fund their work are coming due, forcing firms to refinance. An influx of lawyers seeking a piece of the action and a dearth of big budget mass torts on the horizon has sparked concerns that the space is overleveraged.

“All these loans have maturity dates in them,” said Michael P. Kelley , a partner at Parker Poe who advises on funding deals. “So those are coming and going and the question always becomes what happens?”

Many lawyers that don’t know how to identify good litigation opportunities are too eager to deploy money, said Jim Onder , founder of plaintiffs’ firm OnderLaw .

“If the next thing that someone says is good is a really horrible litigation, they’re going to throw their money at it stupidly and blindly,” he said. “And unfortunately, some of the lenders do the same thing.”

Paul Weiss Poaches Patent Litigation Leadership Duo From Weil

Paul Weiss is picking up a pair of patent litigators from Weil Gotshal & Manges as the New York firm’s hiring spree moves to its trial law practice .

Elizabeth Stotland Weiswasser and Anish Desai are joining Paul Weiss as partners in its litigation department, the firm said. The pair has represented tobacco giant Altria Inc., as well as pharmaceutical companies Sanofi-Aventis and Regeneron Pharmaceuticals Inc.

“We are delighted to welcome Liz and Anish, two of the most accomplished and respected litigators in the country with a proven track record in high-stakes disputes, particularly in the life sciences, healthcare and technology industries,” Brad Karp , the firm’s chairman, said in a statement.

Paul Weiss over the last year has aggressively looked to hire away rainmakers from competitors. The firm—known for its litigation and corporate work, including longstanding ties to buyout giant Apollo Global Management Inc.—has overhauled its pay structure and added a non-equity partner tier.

The move was brokered by Sabina Lippman , co-founder and firmwide managing partner of legal recruiter CenterPeak LLC .

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