Why Are Lawyers Still Expecting Spring Bonuses?

by lawshucks on January 20, 2012

Exhibit A:

The Goldman Bonus ‘Bloodbath’

By bloodbath, we’re talking bonuses ranging from flat to down 30 or 40%, depending on area, but at least base pay is flat, unlike…

Exhibit B:

Bonus Watch ’12: JPMorgan

First year associate base pay down to $120 from $125, second years to $140 from $150, bonuses flat.

Exhibit C:

Layoffs Watch ’12: Jefferies

Layoffs from MDs to admins

Exhibit D:

Morgan Stanley beats expectations with cost cuts

It was the last among major banks to dive into the Wall Street layoffs bloodbath last year, announcing plans only in mid-December to cut 1,600 employees from its payroll across all levels of banking and trading operations. [Ed: we're not even going to try to list all of the other banks' layoffs here]The bank had already cut hundreds of underperforming financial advisers from its wealth management business earlier in the year. The business ended 2011 with 887 fewer financial advisers than at the start.On a net basis, including strategic hires, Morgan Stanley’s workforce declined by 643 workers, or 1 percent, last year. The cuts were on par with the decline in workers at JPMorgan’s investment bank, but less than Goldman’s 7 percent decline.

Exhibit E:

DEALBOOK; Royal Bank of Scotland Plans to Cut 3,500 Jobs and Sell Assets

Exhibit F:

MetLife Will Layoff As Many As 4,300 Employees, Closing Mortgage Unit

Exhibit G:

The Dawn of Lower Pay on Wall St.

Overall compensation on Wall Street this year is expected to drop at least 30 percent, reflecting the dismal financial results reported this week by the industry standard-bearers Goldman Sachs, JPMorgan Chase, Bank of America and Morgan Stanley. The compensation ratios are hard to evaluate because this year’s payouts include the deferred portions of previous years’ awards, and include only the current components of this year’s.

And on and on and on…

So why do we think things are just peachy in BigLaw?

  • Guest

    because PPP at most major firms will be up at least 10% this year. I would expect some firms (the top 3-5) to be up as much as 20%. Because PPP has risen over the last 3 years at those firms and is now higher than it has ever been. Because while PPP has risen, bonuses have dropped so that they are a significantly smaller percentage of what they were pre-recession.

    And for the same reason why we dislike all the firms that follow Cravath in the first place — because bonuses should be tied to an individual firm’s health and profits over the previous year, not the “market.”

  • http://www.mesrianilaw.com/ Rodney Mesriani

    Because there has been so much cost-cutting in these firms that there should be other forms of compensation too. And that includes bonuses.

  • Pigfucker

    what do profits at financial firms have to do with law firm bonuses? law firms have increased PPP across the board this year.

  • Pingback: Dewey Laying Off 5% of Attorneys, 6% of Staff

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