Law firms discourage lateral departures with bonus clawbacks and other financial penalties-ABA Journal

Law firms are increasingly enforcing financial penalties in partnership agreements that discourage lateral departures.

Consultants told the Am Law Daily(sub. req.) that law firms are getting tough with departing lawyers by clawing back bonuses, delaying the return of capital, and limiting earnings to draws at the time of departure.

Law firms making lateral hires, on the other hand, are offering signing bonuses to make up for money given up by departing lawyers, the article reports. The signing bonus is often structured as a loan that is forgiven if a lateral stays at a firm for a set amount of time.

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