The Bonus Economy: The Trick Is Getting In, Then Probably a Shelf Life of Four to Five Years

 Trend watchers can't miss this: 'Tis the season for gangbuster bonuses. That extends from Wall Street banks to law firms. 

For example, elite law firm Paul, Weiss is providing annual and special bonuses. In addition, in early 2026 there will be discretionary bonuses for those assessed as "contributors" in performance. Also, I have been told that associates who hit 200 billable hours in a month receive for that month $1,000 for a nice dinner.

Simultaneously, two other trends are emerging - and intersecting. They are:

Freeze on starting salaries

Reduction in the number of entry-level positions

Here is some of the documentation on how that's playing out.

Financial Times broke that story for the management consulting sector. Here's a version of it in international media:

"An increasing reliance on AI is prompting the world’s largest consulting firms to freeze graduate pay and reduce new hires. This approach may significantly alter the industry’s traditional pyramid model. While the aim is to improve profitability by increasing productivity, it also threatens to limit opportunities for entry-level talent."

Essentially, chair of Paul, Weiss Brad Karp forecast the same reduction in hiring of new graduates. Last March, in Lawyer Monthly he went on record indicating AI will significantly push demand downward for junior lawyers. In contrast the law firm's demand will surge for technologists and data scientists.  

Note also that there has been no recent increase in starting salaries at Paul, Weiss and throughout large law firms. 

Connect the dots: The bonus game facilitates keeping motivated those who are already in. It is also not a fixed cost in the budget. In a bad year the amount can be downsized. Meanwhile, since there will be fewer slots at the low end of the ladder there doesn't have to be the sweet incentive of a higher and higher annual salary to attract the best and the brightest.

Much of this has also taken over the rest of professional services, including public relations. Talk to professors teaching public relations courses. Many are witnessing the tragedy of their students not being able to land jobs in that sector.

What I am advising parents of young people is this: Have your offspring start early in getting a hang on how to bring in income. From anything (legal). That set of behaviors, along with the do-it mindset, gives them a leg up in being able to earn a living from their labor over a lifetime. Meanwhile the shelf life of any individual career might be about four to five years. After that burn out or the collapse of the sector probably could happen.

Thrown off your game, maybe the first time since you started working? You made all the right moves and then the world moved in another direction.

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