Law Firms Fight Lateral Departures

Law firms are clawing back bonuses, delaying return of capital, and limiting earnings to draws at the time of departure in an effort to staunch lateral departures. However, law firms luring lateral hires are offering signing bonuses to offset such penalties. The bonus is often structured as a loan that will be paid after the lawyer spends a certain amount of time at the firm. In the past, law firms would only enforce penalties when a departure had a significant impact on financial stability. Those days have passed, legal observers say.