Milbank LLP, a prominent U.S. law firm, is set to distribute seniority-based bonuses to its associates and counsel globally, with payouts reaching up to $25,000. This move, announced via an internal memo on Thursday, is likely to prompt similar actions among rival firms.
The bonuses will start at $6,000 for first-year associates and will increase depending on seniority. According to the memo viewed by Reuters, these special bonuses are scheduled to be paid by September 30.
Milbank chairman Scott Edelman acknowledged the firm’s intense workload in the first half of the year. “We know that the first seven months of the year have been extremely busy for the firm,” Edelman stated in the memo. He also indicated that the workload is expected to remain high throughout the summer and the rest of the year.
The decision to issue these bonuses comes in the context of a broader trend within the legal industry. In 2021, many U.S. law firms, driven by a surge in mergers and acquisitions (M&A) activity and stiff competition for associate talent, issued mid-year or other discretionary bonuses. Traditionally, such bonuses were reserved for year-end distributions, but one firm’s decision to offer bonuses often influences others to follow suit.
Although the M&A market has cooled in recent years, the demand for legal services related to corporate transactions is showing signs of revival. A recent report by the Thomson Reuters Institute, covering law firms’ performance in the second quarter of 2024, noted that while transactional practices are recovering, the majority of growth in demand for legal services has been driven by litigation and bankruptcy practices.
Milbank’s announcement follows its 2023 decision to raise associate salaries to $225,000, a move that triggered similar salary increases across the legal industry. The firm is the first major New York-founded law firm to announce summer bonuses this year, setting a precedent that could influence compensation trends in the sector.