Summary List Placement
Editor’s note: This story was first published on April 19, 2021 and was updated on May 19 to reflect new reporting on Kirkland & Ellis signing bonuses.
Big Law firms have been slammed in the first half of 2021, advising clients on SPAC deals and corporate transactions, and many are scrambling to keep up with the workload.
US mergers and acquisitions hit $563 billion last quarter, according to Mergermarket. Special-purpose acquisition companies raised more in the first quarter of 2021 than they did in all of 2020, and it was the busiest quarter for operating-company initial public offerings since 2000.
The flow of deals shows no sign of stopping, and neither does the work for law firms, with some associates billing more than 300 or 400 hours a month. On top of extra bonuses for junior lawyers, top firms are rushing to hire associates, even offering signing bonuses to get more talent in the door.
Kirkland & Ellis, known for its deals prowess and busy restructuring practice, has offered signing bonuses of up to $250,000 for junior lawyers. Some of these offers have been conditioned upon a lawyer staying for a certain length of time, according to three people familiar with the offers.
Davis Polk, whose lawyers have faced a crush of SPAC deals and other capital-markets activity, recently offered signing bonuses at or above $20,000, according to two people familiar with the offers.
And Schulte Roth & Zabel, a firm that has major investment-fund clients, has also offered signing bonuses, a source said.
Some people who spoke to Insider did so on the condition of anonymity to avoid jeopardizing industry relationships or running afoul of their employers’ policies.
Representatives for Kirkland, Davis Polk, and Schulte Roth did not respond to requests for comment.
Not every associate working in a sought-after practice area is getting a bonus, and some young lawyers are switching firms for nonfinancial reasons. But Michelle Fivel, a recruiter at Major, Lindsey & Africa who works with associates, said the Big Law scramble for talent was “frenetic” and “unprecedented.”
“The last time the market was this busy was before the ’08 recession,” she said. “I don’t recall it being this frenzied even then.”
Law firms are moving faster than ever to make hiring offers
There are signs that nonstop deals are wearing junior attorneys out, and dozens of law firms have disclosed plans to pay extra bonuses to associates who can hang on through 2021. Some firms have offered spring, summer, and fall bonuses contingent on associates hitting a certain billable-hours threshold.
Anticipating some attrition, firms are also moving quickly to hire. One corporate lawyer said he scheduled multiple interviews with a firm but was given a job offer at the end of the first one. A fifth-year investment-funds lawyer who recently moved firms said he got five offers from a mix of white-shoe firms in two weeks.
Signing bonuses “happened very sparingly in the past,” Ru Bhatt, another recruiter with Major Lindsey & Africa who works frequently with Big Law associates, said. “For a long time after the recession, people were just excited to be employed.”
When firms did offer signing bonuses, they typically offered them to New York associates relocating to other parts of the US, according to Bhatt. But that’s changed in the past year.
Bhatt said most of the signing bonuses he’d seen were in the $20,000 to $25,000 range for associates doing SPAC-related work. He didn’t mention any specific firms.
“Most associates are not really changing much when they make a move right now because the deal flow is going to be similar wherever they’re going,” Bhatt said. “They’re still working from their apartment. And so when you find someone who does want to go on the market and change their practice, firms are moving a lot quicker to get to offer.”
Firms are so desperate ‘they just need bodies’
There are also signs that old taboos, like moving firms before you hit your second or third year as an associate, are falling by the wayside. One second-year corporate associate at a Big Law firm said she got a signing bonus for more than $30,000 when she recently moved jobs — which another firm offered to match. She expects to get a similar amount in bonuses throughout the year, on top of the usual base pay of $200,000 for people in her year.
“The market is just so hot, and people are just so desperate for people — good people,” the associate said. But the work hasn’t been easy, with her billable hours sometimes crossing 400 hours in one month, even with partners turning away work.
To be sure, not all associates are moving for the money. Some associates who moved said other factors — a desire to relocate, work with partners who are better mentors, or have the cachet that comes with being at a more prestigious firm — were the key reasons for their moves, even if they also received a bonus. And some firms aren’t offering bonuses because they don’t want to hire associates who join only for the money, one recruiter told Insider.
One recruiter, who spoke to Insider on the condition of anonymity, said some elite firms were also interviewing associates from midsize firms they didn’t normally recruit from.
“I don’t think these are partner-track hires, necessarily,” the recruiter said. “They just need bodies.”