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“It's a very deliberate move on the part of these firms to signal to the market and potential new members, ‘Hey, you come here ... you're going to make even more.” – Jeffery Lowe, CenterPeak

With lower overhead and a focus on highly specialized work, several elite boutique law firms have topped Big Law associate bonuses this year. The increasing number of boutiques offering above-market bonuses in 2024 reflects the growing talent battle for top associates and the healthy demand for litigation and boutique business this year, analysts say.

More than half a dozen boutique firms have said that they will hand out year-end bonuses that will match or exceed the bonus scale set by Milbank, which formally kickstarted bonus season last month. Those boutiques included Cohen Ziffer Frenchman & McKenna; Selendy Gay; Wilkinson Stekloff; Vartabedian Hester & Haynes; and Gjerset & Lorenz, among others. Some are also offering "special" bonuses that match Milbank's.

The latest news comes from Elsberg Baker & Maruri—a spinoff boutique of Selendy Gay—which announced Monday that its associates will receive a year-end bonus that is 175% of the market scale, in addition to a special bonus.

While it’s not a new phenomenon for some boutiques such as Selendy Gay and Wilkinson Stekloff to surpass the market year-end bonus scale in recent years, the small number of boutiques that are offering these eye-popping bonuses appears to be growing.

“I think we’re starting to see more do it,” said D.C.-based recruiter Jeff Lowe at CenterPeak. “It's a very deliberate move on the part of these firms to signal to the market and potential new members, ‘Hey, you come here ... you're going to make even more.'”

Indeed, the bonuses come in a year when the talent battle is escalating, in a year of double-digit profit increases for some firms. And associate sign-on bonus season may be just around the corner.
It also comes as litigation and counter-cyclical legal services business continues to see high demand.

"Litigation is a booming market now, and one that is a hot talent market. So I think there is a talent retention element to it, but I think it also is just reflected in the demand for services and how busy they are,” noted Lisa Smith, a legal industry consultant at Fairfax Associates.

Profitability Levers

However, the handful of boutiques that are offering these above-market bonuses tend to be market leaders, according to Kent Zimmermann, a consultant with Zeughauser Group.

“One of the benefits of market leadership and being focused, not trying to be all things to all people, is pricing power even in the face of high demand, which yields a level of profitability that allows a market leader to be highly competitive on [compensation],” said Zimmermann.

Boutiques are in a better position to offer these above-market bonuses as they generally have less overhead expenses compared with Big Law firms, freeing up more money to pay their associates.

“When you are not a giant, 28-office firm with multiple overseas offices and huge staff in every department, if you're successful, you can have a lot of extra money to use to pay your associates,” said Lowe.

The pool of associates that these bonuses are going to is also much smaller than Big Law. Selendy Gay, for instance, has nearly 50 associates, while Gjerst & Lorenz has approximately 10 associates, according to their websites.

“Some of the smaller boutiques tend to have lower expenses" and may have relatively higher profit margins, noted Smith at Fairfax, adding these boutiques may also have more consistent performance in the associate ranks. “When the firm is busy, then typically all the associates are going to be busy.”

A number of Big Law firms, including Davis Polk & Wardwell; O’Melveny & Myers; Cadwalader, Wickersham & Taft; and Cleary Gottlieb Steen & Hamilton have already announced they will match the 2024 year-end bonus scale and special bonuses set by Milbank, though a number of other firms have yet to formally confirm their decision.

A look at boutiques announcing year-end bonuses:

New York-based trial firm Elsberg Baker & Maruri said Monday that it will offer 175% above-market bonuses for each associate class year, starting at $26,250 for the class of 2024 and running up to $201,250 for the class of 2017. The firm will also be giving its associates special bonuses starting at $6,000 and going up to $25,000, according to a memo seen by The American Lawyer. 

The bonuses will be paid out to all associates on Dec. 20. The firm has 12 associates, according to its website.

“In just 10 months since our launch, our associates have performed brilliantly, including in four trials and arbitration hearings, and we already have five scheduled to take place in 2025," said founding partner David Elsberg, in a statement to the American Lawyer.

After leaving Quinn Emanuel Urquhart & Sullivan in 2018 to co-found Selendy Gay Elsberg, trial lawyer David Elsberg launched Elsberg Baker with several of his former colleagues at Quinn Emanuel this past February.

Washington, D.C., litigation boutique Wilkinson Stekloff announced it will give 150% above-market bonuses for each associate class year, starting at $22,500 for the class of 2024 and topping out at $172,500 for the class of 2017 and beyond, in addition to special bonuses starting at $6,000 and running up to $25,000, founding partner Beth Wilkinson confirmed to the National Law Journal earlier this month.

It comes as Wilkinson Stekloff has been employed to defend Visa in a Justice Department antitrust suit. The firm also continues to represent Microsoft in defense of its $68.7 billion acquisition of Activision Blizzard, both on the Federal Trade Commission’s appeal pending and in the FTC’s challenge to the merger through an administrative proceeding.

New York-based litigation firm Selendy Gay said last week it will pass out year-end bonuses that exceed market rates for each associate class year, starting at $17,250 for the class of 2024 and topping out at $132,250 for the class of 2017 and beyond, in addition to special bonuses starting at $6,000 and running up to $25,000. The firm has nearly 50 associates, according to its website.

New York-based Cohen Ziffer Frenchman & McKenna, a boutique focused on insurance recovery, advisory and commercial litigation, will also exceed market rates for year-end bonuses for each associate class year, starting at $20,000 for the class of 2023 and running up to $115,000 for the class of 2017 and earlier, according to a memo reported by Above the Law. 

The firm has approximately 19 associates, according to its website. Cohen Ziffer did not immediately reply to an inquiry seeking comment on its bonus scale.

It comes as the firm has had a busy year, helping secure a ruling setting aside a jury verdict against their client, Conduent Healthcare, in a nine-figure dispute.

Austin, Texas-based Gjerset & Lorenz, a health care boutique, is also offering above-market bonuses to its associates. The firm is offering its associates base year-end bonuses for 1,900 hours billed, with more money tacked on top of that for 2,000; 2,100; and 2,200 hours billed, according to a memo reported by Above the Law. Associates will also have the potential to earn even higher bonuses based on merit. 

Year-end bonuses for the class of 2024 start at $15,000 for 1,900 hours billed, running up to $55,000, the maximum potential. For the class of 2017, year-end bonuses start at $115,000 for 1,900 hours billed, topping out at $330,000 for the maximum potential.

Gjerset & Lorenz has roughly 10 associates, per its website. The firm—which also surpassed the Big Law associate salary scale this year — did not immediately respond to an inquiry seeking comment on its bonuses.

Texas trial firm Vartabedian Hester & Haynes announced last month a year-end bonus scale that matches Milbank's year-end bonus scale, which also incorporates the firm's earlier summer bonuses. 

The firm will pay bonuses ranging from $21,000 to associates from the class of 2024 and up to $140,000 for associates from the class of 2016, according to a memo Vartabedian partners sent to associates, only two days after Milbank's announcement.

Delaware litigation firm Ross Aronstam & Moritz is matching the year-end bonus and special bonus scales set by Milbank. Year-end bonuses will start at $30,000 for the class of 2022 and running up to $115,000 for the class of 2016. The firm will also offer special bonuses starting at $10,000 for the class of 2022 and going up to $25,000 for the class of 2016, as reported by Above the Law.

New York-founded Axinn, Veltrop & Harkrider, an antitrust, intellectual property and commercial litigation firm, is also matching the year-end bonus and special bonus scales set by Milbank. Year-end bonuses will start at $15,000 for the class of 2024 and run up to $115,000 for the class of 2017 and earlier. The firm will also offer special bonuses starting at $6,000 for the class of 2024 and go up to $25,000 for the class of 2017 and earlier, as reported by Above the Law.

New York-founded Holwell Schuster & Goldberg, a commercial litigation boutique, said in late November it was matching the associate bonuses set by Milbank and followed by Cravath. The boutique has seen some big trial wins in the last year, including securing a $101 million jury verdict against Walmart and in a jury verdict finding Boeing liable for $81.3 million for misappropriating trade secrets. The boutique, founded in 2012, has nearly 80 lawyers.