Milbank has spent several recent compensation cycles doing the same thing: publishing an associate bonus scale before anyone else, and forcing every peer firm to decide within roughly seventy-two hours whether to match it, beat it, or say nothing. Those three days often decide whether a mid-level associate at a large New York firm ends the year with a five-figure or a six-figure supplement to base salary. The memo itself is rarely longer than four paragraphs, and it is usually sent late in the afternoon.
What follows is a practical map of how that cycle works: who moves first and why, how a scale is built by class year, which conditions never make it into the press release, and what an associate should actually do in the hours after a number becomes public. Career profiles such as Intelligent and Outgoing: Attorney Loreal palmer Balances Work and Extensive Community Leadership are a useful counterweight to all of this, because compensation is only one of several things a legal career is measured by.
Why Milbank keeps firing the starting gun
For most of the postwar period the reference point was the Cravath scale. Cravath, Swaine & Moore published lockstep salary and bonus levels keyed to graduating class, and the rest of the elite market moved in behind it. That convention loosened around 2018, when Milbank raised base salaries first and the market followed Milbank rather than waiting for Cravath. Since then Milbank has repeatedly opened bonus season, and the trade press now treats a Milbank memo as the opening bell rather than as one firm’s internal decision.
Going first costs the firm comparatively little. It was going to pay close to market in any event, so the incremental expense is small, and in exchange it buys recruiting attention, associate goodwill, and a reputation as the firm that does not make its people wait until December to find out what they earned. The cost is on the other side of the ledger: the first mover sets the floor, never the ceiling.
The spring 2021 special bonus round is the clearest illustration. Milbank announced an off-cycle scale reported at $10,000 for the most junior class rising to $64,000 for the most senior, payable in installments. Davis Polk responded within days with a scale that started higher, at a reported $12,000 for first-year associates, and firms that had already matched Milbank had to go back and match again. Being leapfrogged in public is the structural risk of moving early, and the leapfrog becomes the new market.
How a bonus scale is actually built
Almost every scale at this tier of the market is lockstep by class year rather than by tenure at the firm. Your class year is normally the year you graduated law school, adjusted for clerkships and, for laterals, for whatever year was negotiated at hire. Two associates sitting in adjoining offices with identical workloads can be a full step apart on the scale simply because one of them clerked for two years. Confirming your class year of record with HR is therefore not a formality.
The year-end scale
The year-end bonus is the backbone of the system. In recent cycles the published market scale has run from roughly $20,000 for the newest class up to about $115,000 for the most senior class covered, with each intervening class stepping up by a defined increment. Payment usually lands in December or January, and nearly every firm conditions it on being employed and in good standing on the payment date. That single condition drives an enormous amount of behavior in the lateral market each autumn.
Special, summer, and appreciation bonuses
Special bonuses are off-cycle payments made when transactional demand spikes and firms need to hold on to associates who are being called daily by recruiters. They have been branded as special, appreciation, or summer bonuses depending on the year. They are typically smaller than the year-end number, paid in two or more installments so that leaving forfeits the remainder, and described in the memo as non-recurring, which is the firm’s way of making clear that the payment does not reset the baseline expectation for next year.
| Bonus type | Typical timing | Keyed to | Usual conditions |
|---|---|---|---|
| Year-end bonus | December or January | Class year, lockstep | Employed on payment date; frequently an hours threshold |
| Special or appreciation bonus | Announced mid-cycle, paid in installments | Class year | Employment at each installment date |
| Summer bonus | Announced in spring, paid mid-year | Class year | Same as special; framed as non-recurring |
| Discretionary or merit bonus | Paid with year-end | Individual review rating | Firm discretion; criteria often undisclosed |
| Retention or stub bonus | Ad hoc, individually negotiated | Negotiated terms | Often subject to clawback if you leave early |
The conditions that never make the press release
Hours thresholds
A firm can announce that it is matching market and still pay a large part of its associate population less than the headline. The most common mechanism is a billable-hour threshold, often set at 1,900 or 2,000 hours, below which the bonus is prorated or withheld. What counts toward that number varies widely: some firms credit pro bono without limit, others cap it; some credit recruiting, training, and firm committee work, and others credit none of it. Parental and medical leave is usually prorated rather than excluded, but the formula differs by firm and is rarely published.
Discretion and tiering
The second mechanism is tiering. A firm can match the scale for associates rated in the top bands and quietly pay below it for everyone else, or defer an associate a class year after a weak review. When a memo says the firm will pay bonuses at market levels, the question worth asking is whether the number is the floor for everyone in the class or the target for a fully performing associate. Those are very different promises, and the difference is usually visible only in how the memo is worded.
- Whether the scale is stated per class year or only as a headline range
- The exact payment date, and whether employment on that date is required
- Whether an hours threshold applies, and precisely what counts toward it
- How parental, medical, or sabbatical leave prorates the figure
- Whether the payment is styled as special or non-recurring, signaling it will not roll into next year’s baseline
- Whether the firm commits in advance to matching any higher scale announced later in the same cycle
- Whether non-New York offices are on the same scale or a local one
What an associate should do once a number is public
- Confirm your class year of record in writing with HR or professional development. Clerks and laterals are the most likely to find an error, and the correction is far easier before payroll runs than after.
- Pull your year-to-date hours and compare them against the threshold while there is still time to close a gap. A shortfall found in November is a staffing conversation; a shortfall found in January is a lost bonus.
- Do not resign before the payment date unless you have priced the forfeiture. This is the single most expensive avoidable mistake in the autumn lateral market.
- If you are interviewing, ask prospective firms in writing whether they will make you whole for a forfeited bonus. Sign-on payments covering a lost bonus are common and negotiable, and they are far easier to secure before you accept than after.
- Model the tax. Bonuses are supplemental wages, and federal withholding on supplemental wages up to one million dollars is commonly applied at a flat 22 percent rate, which for most associates is below their marginal rate. The paycheck can look better than the eventual April position.
Reading the cycle as a market signal
Bonus behavior is a reasonable proxy for transactional demand. Rich, early special bonuses cluster with capital markets and M&A booms, when firms are competing for a fixed pool of experienced associates. Muted cycles, late announcements, and a drift toward fully discretionary bonuses tend to follow slower deal years. Divergence is informative too: when only two or three firms go above market, that usually reflects heat in a specific practice, such as private credit or restructuring, rather than a broad repricing.
For anyone using compensation to judge the standing of a firm rather than the health of the market, the scale is a poor instrument on its own. Rankings and market overviews such as 2024 Best National Law In The USA Journal: A Comprehensive Overview capture practice strength and client base, which is what actually sustains a bonus scale over more than one cycle. A firm that matches market in a boom year and cannot repeat it tells you more by what it does in the following December.
Frequently Asked Questions
Does every firm have to match the first scale announced?
No. Matching is a market convention, not an obligation, and plenty of firms deliberately sit out. Some pay above market in strong practices and below in weaker ones; others run entirely discretionary systems and never publish a scale. What matching does provide is a defensive benefit: a firm that visibly declines to match in a competitive year usually loses associates to firms that did, which is why most peer firms follow within a week.
Are special bonuses paid on top of the year-end bonus?
Yes, in the normal case. Special, appreciation, and summer bonuses have historically been announced as additions to the year-end scale rather than advances against it. The memo language matters here, because a firm can characterize a mid-year payment as an advance, in which case it is deducted in December. If the memo does not say clearly, ask before you plan around the money.
Do I lose the bonus if I resign before the payment date?
Usually yes. Almost every published scale conditions payment on active employment and good standing on the stated payment date, and courts have generally enforced those conditions where the policy is clear. Some states have wage payment statutes that treat earned bonuses differently from discretionary ones, so the outcome can depend on how the firm described the payment. Check the memo wording and your offer letter before giving notice.
How many billable hours do I need for a full bonus?
There is no universal number. Thresholds commonly sit at 1,900 or 2,000 hours where a firm uses one at all, and a meaningful minority of firms publish no threshold and decide case by case. The more useful question is what counts toward the total, because generous pro bono and non-billable credit can be worth several hundred hours a year and is often the difference between clearing a threshold and missing it.
Do offices outside New York get the same scale?
Increasingly yes at the largest firms, but not universally. Many national firms moved to a single scale across US offices to compete for the same lateral pool, while others keep local scales in markets with lower billing rates. Firms with substantial offices in London, Hong Kong, or continental Europe almost always run separate structures, because local salary conventions, tax treatment, and bonus timing differ materially from the US model.
The Bottom Line
Treat the memo as the beginning of a short, high-value diligence exercise rather than as news. Within a day of a scale becoming public, confirm your class year, check your hours against any threshold, and read the payment-date condition word for word, because those three items determine what you personally receive far more than the headline number does. Associates weighing a move in the same window, or readers comparing firms from the outside, can start with the Find A Lawyer coverage and work backwards from practice strength to pay.
This article is general information about legal industry compensation practices and is not professional legal, tax, or financial advice.
