If you are an associate at a large law firm in the United States, it is important to know about the bonus system. This system determines how much money you can make each year, and it can vary greatly from firm to firm. In this blog post, we will discuss the common minimum billable hours targets are for bonus eligibility and when firms tend to pay those bonuses. This will also be a great article if you are considering making a lateral move in the new year to another firm.
The bonus system in the large law firm world is based on billable hours. Associates are typically required to reach a minimum amount of billed hours before they can become eligible for a bonus. This number will vary from firm to firm, but it is usually around 1,800-2,000 hours or more per year. In addition, to become eligible for a bonus, associates are expected to maintain an acceptable level of work quality.
Once the associates reach their minimum required billable hours and pass quality control, they become eligible for a bonus. The amount of the bonus will depend on the hours billed over that minimum target. Most firms also have a tiered system where associates who exceed their targets receive a higher bonus than those who just meet them. However, the associate compensation scale is predominately determined by the market rate, meaning that most firms will pay a similar amount for bonuses as their competitors, and the number of years of experience.
Once you are eligible for a bonus, the payment date will vary from firm to firm. Some firms pay out bonuses during the year after each associate hits their target hours, while most associates can expect to receive their bonuses at the end of the full fiscal year – meaning firms usually pay out their bonuses in January or February. It’s important to be aware of the bonus schedule of your firm in order to plan accordingly.
So, why should law firms’ bonus systems matter to associates looking to make a lateral move?
Many associates looking to transition in their law career to a new firm care about achieving specific goals – such as increased pay. Understanding the bonus system at your current firm, as well as competitive firms, can help you make a more informed decision when considering leaving your job. Some firms may have higher bonus amounts than others, and understanding the differences in bonuses and how they can impact income goals is an important factor in deciding where to work.
Knowing this information can help get a better idea of your earning potential and help you make sure you get the maximum amount of money that you deserve. It is possible to find a firm that offers what you are looking for and pays excellent bonuses. If you are ready to start your lateral search in San Diego, Orange County, Los Angeles, San Francisco, or Silicon Valley, Vine Attorney Search is here to help. We will help with your resume, provide effective interview prep, and conduct a personalized search for the best new opportunity that meets your goals. Submit your current resume to our search team HERE.
To see a list of some of the actual bonus numbers, we recommend checking out Above the Law’s live tracker of 2022 firm bonuses HERE.
