SolutionsHire top legal talent for any scope of workGet Started Contact us to find the best fit for any in-house or law firm role Testimonials Trusted by the world's leading legal departments FAQ Frequently asked questions about working with Legal.ioEmployer Resources Tools and guides for hiring managers The firm is offering the bonus to junior lawyers to bring in associates to manage M&A activity and the need for both litigation and corporate talent.
Kirkland & Ellis is making headlines with its announcement of substantial $50K referral bonuses. As demand for associates continues to rise, Kirkland & Ellis is setting a new benchmark in the legal sector, prompting industry-wide discussions about recruitment and compensation practices.
Details of the Bonus
Kirkland & Ellis’s $50K referral bonus is designed to incentivize its employees to identify and refer qualified candidates for associate positions. Installed in October 2023, the $50K bonus was renewed until January 2025. The bonus was previously $25K.
This bonus is part of a broader recruitment strategy aimed at meeting the increasing demand for legal services and maintaining the firm's competitive edge.
The referral bonuses offered by Kirkland & Ellis are significantly higher than the industry standard, signaling the firm’s commitment to expanding its talent pool efficiently and effectively.
The bonuses were matched or exceeded by competitors during the peak of associate demand in 2021 and 2022. Most notably, Willkie, Farr & Gallagher was offering $75K as referral bonus in early 2022. But this year, the average range for most firms’ referral bonuses is between $20K to $40K, according to Matt Schwartz, a Recruiting Partner at Garrison.
Reasons Behind the Decision
Several factors contribute to Kirkland & Ellis’s decision to offer such substantial referral bonuses. Known for its work in mergers and acquisitions, private equity, and litigation, the firm has experienced increased client demand, necessitating the rapid expansion of its associate ranks. This demand is largely driven by the growing need for both litigation and corporate talent, as well as an uptick in deal activity, even if it hasn’t reached 2021 levels again.
Offering such referral bonuses gives incentives to associates to tap into their networks, said Summer Eberhard, a California-based legal recruiter at Lateral Link. “This suggests that corporate transactional work is increasing, which is a welcomed sign that the tides may be turning,” she said.
According to a PwC report, the value of M&A deals rose by 5% in the first half of 2024 compared to the same period last year, but the overall transaction volume fell by 25%. However, the number of mega deals (over $10B in value) climbed. Furthermore, legal experts expect deal work activity will continue to expand this year.
Reactions and Comments
The announcement of the $50K referral bonuses has elicited a range of reactions from within the legal community, from praise for its boldness to concerns about the broader implications for recruitment and compensation practices.
“The expectation is deals are going to pick up,” said recruiter Michelle Fivel of Hatch Henderson Fivel. “Kirkland is always trying to make sure it’s at the top of the market where compensation is concerned, so when things do pick up, they are in the best position to hire the lateral talent they want.”
Scott Yaccarino, Co-Founder of Empire Search Partners, said Kirkland’s referral bonus is not surprising. “Demand for talent has exceeded supply for some time. Seeing Kirkland’s [investments to] maximize the amount of great talent they’re seeing makes sense.”
Katherine Loanzon, a Partner at Kinney Recruiting, noted that referral bonuses are part of an effort by firms to cut costs by moving away from hiring outside recruiting companies to find talent. It may be “that Kirkland is upping the ante because they see an increased fee from recruiters” and the firm projects an increased need for lateral hires. “They think that this might be a good way to find that talent through the internal referrals,” she said.
Future Implications
The decision by Kirkland & Ellis to offer $50K referral bonuses is likely to have long-term implications for the legal sector. As firms continue to compete for top talent, innovative and aggressive recruitment strategies will become increasingly important.
It is likely that other firms may follow suit once again, leading to an overall increase in referral bonuses across the industry. However, smaller firms, which may not have the financial resources to match such bonuses, could find it more challenging to attract top talent, potentially exacerbating disparities within the industry.
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