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Author Topic: BigLaw Bonuses  (Read 2781 times)

sarbinson1

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BigLaw Bonuses
« on: January 25, 2007, 12:53:02 PM »
I know this is premature since I haven't even had my 2L summer yet, but do you normally get a bonus for just hitting the minimum billable hours (2000)?  I had thought it was only for doing extra hours but I've heard some people say hitting 2000 will get you a bonus of 20K or more in Chicago (and also that it's taxed more heavily than regular income).

NotReally

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Re: BigLaw Bonuses
« Reply #1 on: January 25, 2007, 03:45:00 PM »
You will probably get a bonus if it is a highly profitable firm.  It shouldn't be taxed at any higher rate unless it moves you into a higher income bracket...  Take Fed Tax for more info.

Felsen

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Re: BigLaw Bonuses
« Reply #2 on: January 25, 2007, 03:53:40 PM »
From what I've read, hitting the minimum billable hours is often used as the threshold level for getting the bonus.  The minimum billable hours target is not always 2000, but it is a nice round number to work with.

A firm might say that bonuses are paid only to those who hit the billable hour number.  So if you hit 1999 billable hours you get $0.  If you hit 2000 billable hours you get some $.  How much money will vary by firm policy.  They may just give a straight bonus value.  They may give a bonus that is a percentage of salary.  They may have a minimum hours amount and a target amount, and you get more money if you hit the target (possibly even more if you exceed the target).  They may also just decide the minimum hours is a qualification and meet behind closed doors to decide on additional factors (quality and quantity of work done in those hours, client contacts, how successful your cases have been, etc.).

I don't think there is an absolute standard out there on the bonus.  I know that in other industries the bonus systems vary greatly from company to company and even change every few years within the same company.  So you'll have to ask the individual firm you're interested in.

UChi2L

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Re: BigLaw Bonuses
« Reply #3 on: January 25, 2007, 06:13:37 PM »
Every single firm is different.  Some have lockstep bonuses for everyone, some call you "bonus eligible" if you hit minimum billables (sometimes 1800, 1900, sometimes 2000), some go up for every hundred hours, some are totally discretionary, etc.

You have to find out from people at the firm.  Either that, or go to the Greedy Chicago board on Infirmation.com for some gossip-type info.
I have to believe in a world outside my own mind. I have to believe that my actions still have meaning, even if I can't remember them. I have to believe that when my eyes are closed, the world's still there. Do I believe the world's still there? Is it still out there?... Yeah.

shady2009

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Re: BigLaw Bonuses
« Reply #4 on: January 25, 2007, 06:32:24 PM »
I believe that whenever you get a bonus they are required to withhold at the highest marginal rate (nearly or over 40% when you include state withholding).  You get the money back when you file your taxes (if you end up being in a lower tax bracket).

Burning Sands

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Re: BigLaw Bonuses
« Reply #5 on: January 26, 2007, 07:12:40 PM »
I believe that whenever you get a bonus they are required to withhold at the highest marginal rate (nearly or over 40% when you include state withholding).  You get the money back when you file your taxes (if you end up being in a lower tax bracket).

Sad to say it fellas but this is correct. 

The bonuses get taxed at a higher rate of about 40%.

Agree with what everybody has said so far.  Every firm is different.  My firm gives a bonus for every 100 hours you go over the minimum billable (1900).  So if you hit 2000 you get X dollars, if you hit 2100 you get Y dollars, etc.  I know many are set up this way over here (NYC).
Burning Sands

ladyofthelaw

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Re: BigLaw Bonuses
« Reply #6 on: January 27, 2007, 10:19:23 AM »
If you really want to know there are websites showing billable hours and salarys, like greedyassociates.com.  It seems dumb to me though as you have several years to go, you probaby will not get a big law job (all 1ls think they will, most do not).  If I were you I would focus on my current classes not how much you are not going to make.

sarbinson1

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Re: BigLaw Bonuses
« Reply #7 on: January 27, 2007, 06:08:01 PM »
If you really want to know there are websites showing billable hours and salarys, like greedyassociates.com.  It seems dumb to me though as you have several years to go, you probaby will not get a big law job (all 1ls think they will, most do not).  If I were you I would focus on my current classes not how much you are not going to make.

I guess I should have clarified- I am already a 2L and will be working at a big firm this summer.

Bored 3L

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Re: BigLaw Bonuses
« Reply #8 on: January 27, 2007, 07:29:05 PM »
It of course varies by firm, but there are some general market trends.  For example, many firms in NY pay lockstep bonuses -- i.e. generally everyone in class gets the same amount and it's not tied to billable hours.  In DC, most firms give a bonus after around 2,000 hours billed, with the potential for more based on merit and of course more hours.

If the Chicago firm you're talking about is Kirkland, then this is good news (for bonuses, anyway).  Kirkland gives very large bonuses accross offices.

It will be interesting to see if the past increase to 145,000/135,000 and the recent increase to 160,000 will affect bonuses.


UChi2L

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Re: BigLaw Bonuses
« Reply #9 on: January 27, 2007, 08:21:27 PM »
Did Kirkland officially up to $160?  If so, as far as I know, it'd be the first Chicago non-Skadden firm to do it.
I have to believe in a world outside my own mind. I have to believe that my actions still have meaning, even if I can't remember them. I have to believe that when my eyes are closed, the world's still there. Do I believe the world's still there? Is it still out there?... Yeah.