By Samson Amore | March 14, 2025 at 11:22 AM
Lower rates for specialized IP work is driving compensation down, one recruiter alleges.
What You Need to Know
Knobbe Martens issued surprise spring bonuses to associates and counsel in February.
Sources said the firm was doing so to retain talent amid a string of departures.
A recent Robert Half survey on attorney job satisfaction found that 73% of lawyers surveyed stayed at their jobs because of competitive pay.
Knobbe Martens, faced with dozens of attorney exits in the last 15 months, is pushing to retain current associates and counsel, deciding to issue spring bonuses amid a wider talent battle in the industry.
Overall, about 12 partners and 23 associates have left the firm since last January 2024, alongside three counsel lawyers, according to a Law.com tally of exits. The intellectual property boutique founded in California has worked to replenish those numbers and hired at least 35 associates in the past year, according to Law.com data.
The 272-lawyer firm, which has seven offices on the East and West Coast, announced last month its springtime bonuses for associates and counsel. A source closely familiar with the law firm said Knobbe Martens likely issued the spring bonuses as part of a bid to retain associates.
The source said that in recent years, members of the firm's executive committee have disagreed on approaches to partner compensation, including how much to pay high-performing partners. This in turn was a factor in some partner exits, according to the source.
Irvine-founded Knobbe posted revenue growth last year, up 8% to $296.9 million, according to American Lawyer data. The firm’s revenue per lawyer was up 8.3% year over year, amid a flat head count.
“We can’t speculate on an individual partner’s reasons for pursuing an opportunity elsewhere,” the Knobbe spokesperson said. “While the number of partner departures varies slightly from year to year, we are proud that our culture—driven by leaders across the firm—fosters a strong sense of collegiality where everyone contributes to the success of the firm, and where everyone benefits from that success.
Earlier this month, the Knobbe spokesperson said the firm “elected to pay special Spring bonuses in appreciation of our associates’ hard work and dedication to our clients. We look forward to building on this success in the years ahead.”
“In terms of the special bonuses, 2024 was a very strong financial year for the firm, and our associates were instrumental in contributing towards that success,” the Knobbe spokesperson continued.
While some industry observers have questioned Knobbe’s retention success for lawyers, the Knobbe spokesperson noted that “many Knobbe Martens partners began their legal careers as summer associates at our firm, and our attorney retention rate regularly outpaces industry averages.”
Bonus as Retention Tools
Departures at Knobbe—including five IP partners who recently left for Morgan, Lewis & Bockius—have been more frequent at the firm in recent years.
Several former Knobbe partners have started their own boutique IP trial law firms, including Irvine-based Via LLP and Armond Wilson, based in Newport Beach.
About a week after the group of partners left for Morgan Lewis, Knobbe on Feb. 18 announced plans to issue special spring bonuses of up to $25,000 to its associates and counsel. Firm mentor committee chair Shannon Lam wrote to staff in a Feb. 14 email, obtained by The American Lawyer, that the bonuses would be paid out to full-time associates and counsel "in good standing" by March 31.
The spring bonuses come in addition to the year-end bonuses, which ranged between $5,000 and $30,000, that the firm issued in December 2024.
Many top law firms, prompted by Milbank, also gave “special” bonuses to law firm associates by year-end, as recognition of the extraordinary client demand and financial gains of law firms last year.
Meanwhile, some IP lawyers may be in demand after IP litigation practices saw a bump in practice demand growth in 2024, according to Thomson Reuters’ State of the Legal Market report. IP litigation practices saw 0.2% demand growth last year, compared with a contraction in the prior year.
Still, Jennifer Henderson, a recruiter based in Orange County and co-founder of legal search outfit Hatch Henderson Fivel, said it was unlikely that other firms would jump to follow suit, noting it may be “a one-off.”
Law firms pay out bonuses “because they want to keep people, it is a retention tool,” Henderson said, speaking generally about law firm bonuses. “I do think there’s a practical aspect to it but there’s also an emotional element to it too, and necessarily that builds loyalty.”
Jamy Sullivan, executive director of Robert Half’s legal practice, echoed this, noting retention bonuses have typically been “designed to keep employees during business critical periods.”
“It’s an effective response [to] maybe merger and acquisitions, or if there’s a leadership transition or rapid growth,” Sullivan said.
Knobbe itself had about 138 partners, 10 non-equity partners, 117 associates and about seven counsel attorneys last year, according to Law.com data. In all, it had 272 full-time equivalent lawyers last year.
“The firm, unlike other Big Law firms, is really not very leveraged, [more than] half of the firm are partners,” Henderson said. “That means there’s a bigger portion, comparatively, of people at the firm billing at a higher rate.”
Because of this, offering a bonus to associates and counsel “just makes sense,” Henderson said. “Making a gesture like this is going to give them that loyalty, but it’s really probably not as impactful to the bottom line if only half the firm, if that, is associates.”
The amount Knobbe was offering associates was “not as high, typically, as Big Law would be doling out for spring bonuses,” Henderson noted.
Stay for the Pay
Competitive pay is one of the main reasons attorneys are either satisfied with or depart their jobs, Sullivan said. Robert Half’s recent survey on legal job satisfaction found that overall, 73% of lawyers said competitive compensation was the main reason for being happy with their current role.
“A strategy that is working for employers to attract and retain talent is to have a clear compensation plan that is transparent and is communicated and is competitive,” Sullivan said. She added it’s important for any firm to “always re-evaluate their what your retention plan is to make sure you have one in place.”
Firms that are strong communicators from the beginning of onboarding a new lawyer, have clear expectations, offer career advancement, and are flexible with work-life balance will have an advantage in retaining talent, Sullivan said. “Positive workplace culture really ties in,” Sullivan added. “If you’re doing all those other things, you’re going to create a positive culture to retain your staff.”
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