In an annual rite, some of New York's most overcompensated entry-level employees clutch their swivel chairs in anticipation of their year-end bonuses. As soon as they are announced, the numbers are posted on sites like greedyassociates.com and printed in The New York Law Journal. This year's numbers are stunning: $40,000 for first-year associates, bringing total compensation for newly hired lawyers to a record citywide average of $165,000. "It makes me vomit," says one first-year associate. "I don't even deserve it." Just a few years ago, bonuses consisted of a small, merit-based amount that was only a fraction of total compensation. Then, in 1997, firms began to tack on extra "boom year" bonuses of $10,000 or more, reflecting the raging market for legal services. Now, for the first time, many firms are no longer distinguishing the two sums, instead folding both into one package. But if times turn tougher, will law firms, like investment banks, cut bonuses? In the late eighties and early nineties, firms folded, froze salaries, and laid off lawyers. But bonuses were safe then, and now, having tossed the "boom-year" tag, firms seem to have left themselves no recourse: "They'll never cut bonuses," says one mid-level associate. "They never have."

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• Archive: “Gotham: Life in the New City”
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• Table of Contents: December 11, 2000 issue of New York | Subscribe!