How Do BigLaw Bonuses Work?

BigLaw bonuses are a huge part of total comp, but the system is confusing if nobody explains it to you. There are multiple types of bonuses, different eligibility rules, and timing that varies by firm. Here is how it all works.

Year-end bonuses

This is the big one. Most BigLaw firms pay a year-end bonus in late November or December, and the amount is tied to your class year. The market rates generally follow whatever Cravath announces each fall. First-years typically receive around $20,000, and the number climbs with seniority up to $142,500 for eighth-years.

The catch: you usually need to hit a minimum billable hours threshold to qualify. At most firms, that is 1,950 to 2,000 hours. Fall below the threshold and your bonus shrinks or disappears. Some firms have tiered systems where hitting higher hours targets earns a larger bonus.

Signing bonuses

Some firms offer signing bonuses to incoming associates, usually in the range of $10,000 to $25,000. These are most common at firms trying to compete for candidates from top schools or specific practice areas. Not every firm does this, and the amounts vary. You can compare what different firms offer in the firm directory.

Special bonuses

These are one-time payments that firms announce periodically, often in response to market competition. When one major firm announces a special bonus, others often follow. In recent years, special bonuses have ranged from $5,000 to $40,000 depending on class year. They are unpredictable by nature, so do not budget around them.

Clerkship bonuses

If you clerk before joining a firm, most BigLaw firms pay a clerkship bonus on top of your regular compensation. Federal district court clerkships typically earn $50,000 to $75,000. Circuit court clerkships earn $75,000 to $100,000. Supreme Court clerkships can be $400,000 or more at certain firms. Firms like Kirkland & Ellis and Gibson Dunn are known for competitive clerkship bonuses.

When do bonuses get paid?

Year-end bonuses typically arrive in December. The exact date varies by firm, but most announce the amounts in the fall and pay before year-end. Signing bonuses are usually paid with your first paycheck or shortly after your start date. Clerkship bonuses are paid when you join the firm.

The tax hit

Bonuses are taxed as supplemental income, which means they are subject to a flat 22% federal withholding rate (or 37% for amounts over $1 million). Combined with state and city taxes, you might see 40-50% of your bonus disappear on the pay stub. You may get some of that back when you file your return, but the initial withholding stings.

Understanding how bonuses work helps you plan your finances and compare offers. Check out the BigLaw Bear firm profiles to see how compensation stacks up across firms.