Regulation Corporations
Bonuses structured as forgivable loans are getting used for companion retention
Some legislation corporations are utilizing forgivable loans to retain worthwhile companions and hold newly promoted companions pleased. (Picture from Shutterstock)
Some legislation corporations are utilizing forgivable loans to retain worthwhile companions and hold newly promoted companions pleased.
New York recruiter Alisa Levin, a principal on the Greene-Levin-Snyder Authorized Search Group, described two sorts of forgivable loans in an interview with Law.com.
Corporations making an attempt to retain a companion could give that particular person a forgivable mortgage that must be returned if the lawyer doesn’t keep for a set time interval, Levin advised Regulation.com. In at the least one occasion, the article says, a BigLaw agency supplied forgivable loans to retain companions throughout merger talks.
Corporations additionally use forgivable loans to handle “the challenges of a transition” when a lawyer used to getting cash frequently turns into a companion, Levin mentioned.
One advantage of forgivable loans is their “stealth high quality,” the article says. Corporations typically don’t report such loans in a companion’s compensation schedule. That retains different companions from looking for a payout.
“When a agency needs to reply to productive companions who’re threatening to go away with out disturbing the present compensation system, a forgivable mortgage, which is usually not disclosed to the entire partnership, is a approach of not directly black-boxing compensation,” mentioned recruiter Matthew Bersani, a founding companion of the Cliff Group, in an interview with Regulation.com.
