Law Firms Risk Bad Optics With Lavish Year-End Bonuses
"It's important to think carefully about these bonuses and rate increases, because decisions that clients view as tone deaf can come back to bite, said Fred Paulmann, a former senior attorney at Pfizer Inc. and founder of the Counsel Management Group.
December 13, 2022 at 07:42 PM
4 minute read
In-house legal chiefs already bristling at outside counsel rate hikes may find themselves chafing at Big Law's rollout of year-end bonuses, many in the six-figure range for eighth year associates. While these events are hardly unexpected, they are also playing out amid widespread tech industry layoffs and an undercurrent of economic precarity that lends an air of insouciance to this year's parade of bonus announcements.
"Law firms face serious pressures to attract and retain talent that is of appropriate quality, and they're certainly entitled to compensate their professionals appropriately. No one is going to debate that fact. The bigger issue is the context. Many in-house counsel are struggling to retain their teams and they're only allowed to give out meager pay increases and modest bonuses, so it strikes many reasonable people as just not fair," said Jason Winmill, managing partner at Argopoint, a consulting firm that advises Fortune 500 legal departments.
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