Missing: Biglaw's Summer Bonus Matches

0:11Hello, and welcome to the latest episode of Thinking Like a Lawyer. I am Katherine Rubino. I'm an editor at Above the Law. And today I'm joined by my colleague, Chris Williams. Hey, Chris. What's up? We are notably not joined by our other colleague, Joe Patrice. He is once again in legal tech world. Is he ever not? I think mentally he certainly always is. But this time it is also physically. He is actually at the ILTA conference, which is, I guess, repetitive, right? Because the con part means the conference. But he is, that's what is in fact where he is. So he's in Washington, D.C., I believe, this year's conference's location.

0:55Nice. But before we have to deal with any of that, we can get to dun-da-da-dun, small talk. See, we don't have the mixing board. That is a proprietary Joe Patrice world. The good news is we can still talk in the small format. Anything new and interesting going on in your life, Chris? Oh, you know, just engaging some water sports over the weekend. I went tubing. Okay. Okay. Very quick, very quick, very quick clarification after very deliberate speech. I was like, okay. We're going to go like that. Okay. All right. Hey, listen, listen. But it was cool. I did not know that tubing would be a core exercise.

1:45So I may have just been doing it wrong. But the tube I was on, it was like it was a it was a donut, but it didn't have any back support. And I had a stick that I decided to turn into a paddle to help direct me down the water. So I was like constantly. So I was like constantly leaning up. Yeah. So my so my core was engaged for like the three to four hours that we were floating down. Yeah. So it's not not quite like plank level bad. But yeah. I guess if you were more like, I will go where the river takes me, then it might have been more relaxing, both emotionally and for your core. Yeah, the river kept taking me to the bank where the trees were.

2:24So I had to push it away. Sure, you did not want to meet the tree in that way. Yeah, yeah. I'll leave that to the Lorax. Yeah, I just got back from visiting family. My sister lives in Texas as a teacher, and I helped her set up her classroom. They moved locations. She had to get a new classroom. And so I helped her set it up, and I had sort of a long day of travel yesterday. I was traveling solo with a baby, two-year-old. It's not actually a baby anymore. I suppose I should say more accurately, toddler. But I had a long day and thought that I would get to bed early, early to bed, have a good, long, productive day ahead of me today.

3:08And then our good friend Taylor Swift messed with those plans. You may or may not have heard, Chris, but last night, or rather this more accurately, we record this on a Tuesday before the day before it comes out. But at 12, 12 in the morning, there was a massive announcement in the Swifty land. TS-12, her 12th studio album, was announced. It's going to be called The Life of a Showgirl. and more details will be revealed on Wednesday on the Travis Kelsey podcast. He has a podcast? Is that a joke? No, I thought he was a football guy. Yes, yes. I am not literate in sports ball. I thought the only sports people that had a podcast were, what's the name?

3:57Ocho Cinco and Shannon Sharp. Okay, well, a lot more do, first of all. Okay. So let's start there. Pat McCaffrey has a pretty popular one as well. But no, The New Heights is the Kelsey Brothers podcast. Both Jason and Travis do it. And it is definitely a sports ball podcast, as you said, but they do talk about plenty of other things. And from the clips we've gotten so far, tomorrow's episode will be released at 7 p.m. And we'll contain more information about the brand new Taylor Swift album. Maybe the actual release date. We don't know exactly when it will be, but we do know it will be before October 13th because on her website, that's when the merchandise will ship.

4:45So we know it has to be before then. But that's the only information we currently – well, that's not true. We know the color scheme for the album is going to be mint green and orange. Mostly orange, I think, but very, very interesting on that front. I've heard a lot of theories about what it all means and all that kind of stuff but yeah it's going to be a big deal so does the album debut as her version or will that be the deluxe so no so the her version thing was a legal issue if you recall to kind of bring it back to what this podcast is about was because she didn't own the original masters for her first set of albums that were released she had a different production company back then and she did not own the masters and then they were sold out from under her to Scooter Braun.

5:31But earlier this year, she bought back the originals and she had two more albums left to release as Taylor versions, her debut album and her Reputation album. And she said that she's not going to do Reputation as a secondary version because she really feels that the original Reputation album was perfect as is. And so nothing she could add in a re-release would change the, would be, would better the original, unlike the other albums that she's released, which she felt like there were some changes that she wanted to make. And so no, there will not be a Taylor's version of this album. It's just the album.

6:06And that has been true. Reputation was the last album that she recorded under her old record label. So everything since then, so from Lover on to TS-12 now, she's already, always already owned. Yes, very good for Taylor. You know, it also has the benefit of being a bit of a legal story. So, you know, there we go. But yeah, that's the situation. That's the story there. But that is why I did not get to sleep nearly as early as I thought. I thought it'd be a normal day. I thought I could just go to sleep. But no, but no, Taylor Swift, 12-12. Also, I mean, I get it's her 12th album. She announced it on the 12th at 12-12.

6:43Like, you know, this is the sort of thing she does. But I did wish I was asleep. Well, unless we want to talk extended even more about Taylor Swift, which, you know, I'm always up for. Hell no. Hell no. Let's talk about Milbank. OK, let's talk about what the biggest story of last week, which is Milbank announced summer bonuses. Milbank, a firm that has sort of taken the lead, I think, in a bunch of ways about doing things. compensation, announced that they would be making special summer bonuses for associates ranging between$6 ,000 and$25 ,000. Quite a bit of money if you're on the more senior end of that.

7:31Sort of as a thank you for all their hard work. A couple of things I think I want to talk about on this. The first is wither the matches. So Milbank is the first. There have been a couple of boutique or smaller firms that have done summer bonuses. Some have even outstripped the size of those Milbank bonuses. But Milbank thus far, sort of one week later, has been the only big law firm to announce summer bonuses. Will that stand? Will anybody else choose to match these summer bonuses? What do you think, Chris? I mean, yeah, of course. I mean, it would be weird if they didn't match. It's just a question of when.

8:13And what I'm always curious about is why don't firms rush to be the first to give the bonus? Because even if it's not as much as it will be maybe later in the season, at least they have the stain of being like, we were the first ones to do right by our employees. Yeah, I mean, I think that there's definitely like that kind of little C conservative kind of vibe, right? In big law, I don't think a lot of firms want to stick their neck out. And, you know, in a lot of ways, kudos to Milbank, right? They weren't for years and generations. They were not the firm that anybody thought of when you're talking about compensation leader, right?

8:53That was Cravath, maybe Davis Polk. They just weren't it when it came to compensation. And under the leadership of Scott Edelman, he was like, we can be though, right? We have the money. We have the whatever we're going to do right by our associates. And, you know, listen, if there wasn't if if there weren't special bonuses, if there were if this didn't happen, you know, that extra money is just profit that gets split amongst the partners, according to that partnership agreement. Right. So there's plenty of reason to not give the bonuses. but once the sort of seal has been broken and someone in big law makes those bonuses, I think you're right.

9:26I think that the top of big law, you know, and I would loosely define the top of big law as the, as at a minimum, sort of the top 50 law firms as per the sort of AM law ranking, which is just by sort of gross revenue. But there will be some below that kind of threshold mark that have great profits per partner. Maybe they're a smaller firm, but they have really good profits per partner. So they will, I think, also participate in these special bonuses. But I think that your second part of your answer there is really the question, it's the when. I think a lot of firms will hold off until year end to actually give the money to associates.

10:09So I think that as part of those year end bonuses, there will be a special column. They always produce these little tiny, not even spreadsheets. I can't even be like they bust out Excel. They like insert columns in Word to create these memos. And I think that they will have a new column that will be like special bonus number and that will match these Milbank numbers. But I mean, I think it's a little half-hearted and firms have gotten away with that strategy over the last series of special bonuses that usually Milbank has led in big law. and I kind of think it's bullshit. People want their money now.

10:49It also is a way to extend those golden handcuffs, right? Because now you got, at Millbank, you have your summer bonus. If you have a lateral opportunity, that's something that you can or cannot take at your sort of discretion. But if you're waiting for all of your money to the year end, it just doesn't make sense to leave before you see what those big numbers are. Because, you know, if you're missing out on$25 ,000 plus year end bonuses, that can be quite a pretty penny. So it's just a way of sort of further tightening those golden handcuffs and kind of forcing the lateral associate market to be pushed out until January or February.

11:30Even some firms don't actually, they might announce their bonuses in December, but don't actually pay them till March as I think some of the later ones. So it's quite a while from now that people who might want to leave are sort of forced to stay where they are i think i think you're right um as far as the the chaining aspect of the announcing of bonuses being tied like well can't can't go away now um which makes me think earlier to the point you made about like you know lower c conservative point of not wanting to shake stuff up but i feel like when when we see firms that announce bonuses early it's like wow they're on top of their game they must be making a lot of money and then when we see firms like months maybe behind the curve eventually about in that lineup like why aren't they announcing bonuses it's like well maybe they're struggling financially right it seems like why not just announce early and just have a late payoff time for the bonuses you know yeah i mean i think that you know who cares who's the audience not who cares but who's the audience for these early announcements right it's associated so it's like a lateral market issue if you're not doing a ton in terms of hiring the lateral market, there's no harm, no foul.

12:45As long as you eventually make folks whole, your internal folks will probably be okay with it, right? Or at least won't put up that much of a fuss. Maybe they don't love it, but they don't hate it. Eventually they'll get their money kind of a vibe. And if you're not trying to recruit a ton of laterals, maybe that's okay. And the truth is in terms of the other form of, I mean, partner or rather clients, clients don't care when you announce it. They just, you know, they care about the results, I think more than, you know, as long as the financials generally check out. I don't think that they're looking that closely as to when, you know, firms are announcing bonuses.

13:23But also at the same breath, lots of clients also give a lot of shit to firms who like Milbank, who push the envelope in terms of compensation because they say, well, does that mean my rates are going to go up. It's like, well, your rates were going to go up anyway, friends. It's just about who's going to benefit from those increased rates. Is it the associates who do a large chunk of the work that you are benefiting from? Or is it just the partners, which you may have one or two that you kind of manage your client relationships? So I always find those client comments a little bit, well, pretty darn short-sighted and myopic.

13:58But that's kind of the other set of it. But the other sort of group that law firms are potentially talking to besides laterals when they're announcing bonuses or associate compensation generally are law students. And honestly, I think that law students, except for ones maybe that have like a strong family history or background in the industry are kind of bombarded by so much information that it's hard to that kind of granular distinction, I think, is is hard to understand and hard to master.

14:32Da-da-da-da-da-da. That's my impression of the hold music your callers hear right before they hang up. Smith AI pairs AI with real live agents to answer calls, qualify leads, book consultations, and even send retainers 24-7. Better intake, fewer missed opportunities. No more hold music solos. Try it free at smith.ai. Mention Above the Law or use code NOHOLD at sign up to claim 20 % off your first two months of service. So our next topic of conversation is theoretically, or at least according to the federal government, a little glitch that I think has some pretty, pretty profound impacts. Joe, our colleague last week, covered the story where all of a sudden on the congressional website, part of the Constitution just disappeared.

15:31it couldn't have been a big part what was it what was it oh oh interesting it was article one sections nine and ten and notably notably section nine is the uh habeas corpus uh section of the constitution you know not great not great uh since there are a ton there's a ton of litigation right about habeas right now. Just ongoing. Yeah, it's pretty vital, actually. I just imagine there's some textualist judge like, well, since the text was gone. Also included in the completely accidental deletion was the part of the Constitution that prevented accepting signs of nobility from foreign nations. Yes, yes.

16:16All the good stuff. All the good stuff. All the very timely good stuff. So Sir Sam Alito cares a lot about that, but or doesn't more accurately. And it's interesting. And kind of as I alluded to at the top of this, the Library of Congress officially came out and said that it was like an oopsie. We didn't mean to delete this very important part of the Constitution. And there was some update being done on the back end and it resulted in a deletion. And listen, we work on the Internet, Chris. Yes, we are well aware that there are times when updates to your website result in unintended consequences.

16:51That is certainly fair and true. But you have to wonder what update were they making to Section 9? Why? Why was that? Why was that the only part of the Constitution that magically got deleted? What were you doing? And it's also an annotated version, right? So that is probably my guess. They're probably doing something to the annotations of section nine. Probably, I mean, you know, not in a good faith way, right? In a trying to minimize the import of habeas or make some sort of a change on that level. And then inadvertently got the entirety of the section deleted. And, you know, now that the spotlight is on, when stuff was in fact returned.

17:37So, you know, you can, I love that, you know, which is an absolutely an update to Joe's story. but people are still emailing in. No, it's there now. And it's like, yeah, there is absolutely an update at the end of the story. Don't get too excited. But it's, you know, it doesn't help the dystopian feeling that a lot of people feel right now. I do wonder why the, as silly as the, oh, there was a coding error is the explanation. It would explain why the second, why the 22nd Amendment was still up. Because if you're going to get rid of things, just just establish the reign constitutionally so that that may be the saving grace like if it was deliberate it would have been worse but you know but yeah well and women can still vote so well speaking of the term limits step parts of the constitution this isn't the first time right that there's been a version of the constitution that uh did not have some some some parts of it, you know, Donald Trump actually sells a version of the Constitution for$60, you know, that does not have equal protection clauses.

18:46It does not have the 14th Amendment in it. It does not have the 22nd Amendment in it. You know, the parts that he really, really doesn't like. This Constitution is also part of the Bible and where he also changed it to read Trump wet. Fair, fair. No, the Trump version of the Bible, excuse me, the constitution uh said what i said uh well it goes from the sort of bill of rights the first 10 amendments and skips uh amendments 11 through 27 which are some of the ones that the trump administration is doing some violence to right now so weird how that works yeah one last biblical bastardizing i would imagine what happened in the trump library in the trump in the trump bible that little section about uh it being more difficult for a rich man to get through an eye have a needle than to get into heaven it's just the hole for the rich are big it's big they just let us in anywhere you know it's like it's difficult to be a rich man because everybody likes me but you know god yeah you know everybody's like he's him he's him he's rich he's him but no but only he is him i'm just a follower you know okay so now we're talking about some lateral moves some big law partners moving, moving and grooving.

20:05We've written about this a bunch, and that's because the overall amount of partner lateral moves in 2025 is up. People are moving earlier and earlier in their career as well. So it's not really seen as kind of a stain to kind of move places. Yeah. So these partner moves are happening faster and faster in folks' career, And a ton of them are happening right now. And, you know, part of that is definitely their bigger paydays available at a lot of firms. Firms, we've covered this on the podcast before as well, but firms are changing their partnership agreements such that they have more flexibility to offer upwards of$20 million to lateral partners who are willing to sort of come and make their move.

20:53And along that line, there was a particularly large lateral move that happened last week that our colleague Stacey Zareski covered. And Crowell added in the neighborhood of 40 partners, 40 attorneys, 16 of which were partners from Reed Smith. Yeah, a firm left the firm. That's fair. Yeah. That's fair. So question, just for curiosity, like now, like you said earlier, it wouldn't have a negative connotation to the fact that like 40 folks just up and left at once. Like, sure, it's not the best, but it happens. What would the coverage of this? What would the coverage of the story look like if it happened a decade ago?

21:35I think it would be pretty similar. Right. And I mean, listen, it's not sort of a negative to someone's career to lateral. I think that that remains true. But I do think that there's still a kind of vibe when that many attorneys leave from a place like Reed Smith. And this was, you know, an entire group. And so the question remains, will this will Reed Smith continue to have a presence in that particular practice area? Or will they start focusing their energies and their additional lateral hires on other areas? Who's left that still practices in that group? You know, will they also start looking maybe not not a crow, but maybe there's other places where they might sort of lateral.

22:20I think that there's definitely that when when it's when it's that many people lateraling the the firm that they're jumping from, I think, still has some questions to answer. And I think that you can kind of tell the the Reed Smith statement was very like trying to put a happy, slappy face on it. And, well, we're going to focus on other areas that, you know, blah, blah, blah, like all sorts of PR speaking, you know, whatever you kind of you don't you know, it's expected to kind of put a PR. spin on this, right? Sure. I just imagine the empty cubicles, like, the next day. Like, where's the folks, you know?

22:57Yeah, it is interesting. And it was healthcare litigation attorneys from different offices around the country that all left en masse, which, you know, is definitely, it's definitely a moment. And I think what's interesting about the lateral hotness right now is that litigation is really, really feeling the moment. I think that it was overall, according to some recent report, that litigation demand is up something like 2 % year over year, which is a tiny number, but a lot of cases. So I think that that is definitely part of it. And also sort of dovetails with another story that we did last week about the lateral markets, And that is that private equity is not feeling the love, even though, you know, you think of private equity as this sort of, you know, big corporate kind of practice.

23:49And it is, but actually the lateral moves for PE partners are down. And so I think that is really interesting. And what some folks are pointing to and one of the factors that I think is driving this is that lateral moves, particularly in the PE space, are pretty risky. You know, there's really a big question about, you know, somebody currently works on this size book of business, but is that something they'll be able to port? Will they be able to continue to bring all those clients over with them? And with these partner paydays getting bigger and bigger, there's just more diligence, I think, that has to be done and will be done as these kinds of moves are contemplated.

24:31P.E. is just not feeling the love right now. But yeah, very much dovetails with the increase in the sort of import of litigation and the sort of ability for those partners to move into kind of the demand overall for litigation services. It's just on the upswing for sure. Yeah. Thinking back earlier to you were saying about like associates that would have left but for being told about the bonuses coming. I'm wondering how many private equity partners would have been elsewhere but for the tariffs bouncing back and forth. Yeah, I mean, I think you're absolutely right that the economic uncertainty kind of of the moment is absolutely playing into the cautiousness that firms are exhibiting when they're thinking about potentially lateraling new PE partners.

25:22There are tariffs. There are all sorts of interest rates. There's lots of economic uncertainty, trade wars that are going on that really have a big impact on something like the PE practices where litigators are kind of in their own little bubble. and you know tariffs and interest rates have have less of an impact on a litigator's book of business although you know there's there's there's certainly complications i think for litigators right now right because you know there's a vindictive president that has gone after people for representing certain clients particularly in litigation against the administrations or our interests that donald trump has generally so there's always also that kind of going on but but uh there's just like you know how what what's going on with interest rates is a big big question in the pe world also this was this didn't make it be one of the big stories one thing i'm interested in following it looks like the department of commerce is trying to sweeten up the pot for harvard to take the knee by targeting their uh patents sure and i'm just interested in seeing how that story develops over time so just one thing for like listeners keep your ears up In just case you hear anything, it's just interesting to see the way that the markets and litigation is playing out.

26:43Absolutely. Well, that's pretty much all the time we have for this week. Please read us on Above the Law. You can get a glimpse of these stories as they break and as they come out. You can follow us on social media. It's at ATLblog. I'm at Catherine Wan. Chris is at Rights for Rent. And be sure to listen to this podcast and give us a rating as well as the other offerings from the Legal Talk Network. I also host the Jabot podcast. And Joe is a participant on the Legal Tech Writers Roundtable, I think it's called. Listen, Joe doesn't get it right and he's on the damn show. You did it better than him.

27:25Better than him. There you go. Full credit. Full credit. I am asserting that I receive full credit. So follow us on social media. Give us a rating. not just the stars that obviously we'll take in but written reviews help us move up the algorithm and help other people find us as a legal podcast and with all that also word of mouth tell your tell your co-workers especially the ones you don't like let's be talking about it alright y 'all peace peace

28:03Thank you.