LONELY BONUS – OK, this is getting creepy. Baker McKenzie announced associate bonuses last week and… other firms aren’t tripping over themselves to follow their lead? How unsettling! As of mid-afternoon on Nov. 23, no other large firms were discovered to have announced their bonus scales, leaving Big Law associates to speculate among each other on the size—or even the sheer existence—of their bonuses. But, particularly at firms most affected by the slowdown in corporate work and subsequent layoffs, it actually wouldn’t be the first time annual bonuses were cut altogether. However, Michelle Fivel, a partner at Major, Lindsey & Africa, told Law.com’s Dan Roe that firms dealing with capacity or profitability issues will more likely pull back from broad-based special bonuses, discretionary bonuses and one-time payments, which firms instituted in lieu of raising the base bonus scale to give themselves flexibility in a downturn. Meanwhile, law firm management consultant Kent Zimmermann said he expects all but the largest and most profitable firms to rein in the swagger they projected in recent years while announcing larger bonus packages.
HIKE! – Ah, now this is the Big Law we’ve come to know and love. Law firms are preparing “aggressive” billing rate increases for 2023, seeking to overcome inflation amid challenges in their demand and productivity, according to legal industry analysts. Law firm leaders told Wells Fargo Legal Specialty Group they will raise rates on average around 7% or 8%—before discounting—in 2023. “We’re seeing higher planned rate increases at this point than we’ve ever seen, and we’ve been tracking this for 15 years,” Owen Burman, senior consultant for the legal specialty group, told Law.com’s Andrew Maloney. Another recent survey found similar results. About 98% of firm managing partners and C-suite leaders said they will “probably” or “definitely” increase billing rates next year to improve their financial performance, a “stunning” number that shows firms “clearly see their path to continued profitability running through the valley of steadily rising billing rates,” according to the 2022 Law Firm Business Leaders report from Thomson Reuters. That’s an increase from last year’s survey, when about 85% said they would probably or definitely increase rates. “Clearly, there seems to be an almost singular focus among law firm business leaders toward raising rates as the performance strategy of choice…,” the analysts wrote.
ON THE RADAR – Warner Music and other plaintiffs sued London-based skincare and cosmetics company Iconic London (Holdings) Limited on Friday in California Central District Court over copyright infringement claims. The court case, brought by Mitchell Silberberg & Knupp, accuses Iconic and its social media influencers of using the plaintiffs’ works in the company’s online marketing and advertising videos. Lawyers have not yet appeared for the defendant. The case is 2:22-cv-08602, Atlantic Recording Corporation, a Delaware Corporation et al. Stay up on the latest deals and litigation with the new Law.com Radar.
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