Job Searches and Bonus Season
by Jon Lewis
Now that we have hit November, a number of significant occasions loom larger on the horizon: Thanksgiving, Christmas, New Year’s Eve and, last but not least, law firm bonus announcements are all just around the corner. This time of year, legal recruiters hear the following from candidates with great frequency: “I’m putting my search on hold until after I collect my bonus; call me back next year.”
It is of course understandable that at this point in the calendar candidates focus significant attention on annual bonuses. After all, they’ve worked hard for ten months to put themselves in position to receive what can be a very substantial pay-out. That said, is it really a good idea for those seeking a new position to suspend their job search from November to January or February? Perhaps not, for the following reasons:
- Timing Considerations: As a practical matter, starting a search for a new job in the late fall will very often have no impact whatsoever on the eventual receipt of a bonus from a current employer. Job searches usually take a significant amount of time to complete, particularly this time of year when the interviewing process tends to slow because of the holidays. Thus, even very attractive candidates who send out resumes in November will often not complete interviews/receive offers until after bonuses have been paid out anyway. Moreover, even in those instances where the process happens to move more quickly, most prospective employers are well aware that candidates do not want to walk away from sizable bonuses from their current employer, and are often willing to negotiate start dates that will permit candidates to collect their bonuses before giving notice/beginning new jobs. It is also important to bear in mind that it is very difficult to ever get the timing of a job search just right from the standpoint of future bonus payments. Wait until January or February to send out resumes and you may not get an offer for an attractive position for three-to-six months or more, in which case you would likely still wind up leaving on the table at least half of the bonus for next year when you make your move.
- Less Competitive Job Market: Precisely because so many candidates do decide not to commence searches in the fall, the candidate pool can be much smaller this time of year, even for very attractive positions that firms/in-house legal departments are anxious to fill quickly. For this reason, those who do pursue new opportunities towards year end often face less competition for choice positions than they would if they waited until January or February, when bonuses have been paid and more candidates enter the market.
- Benefits v. Costs: Yes, annual bonuses for attorneys can be very substantial. That said, is the prospect of a bonus really a sufficient reason not to pursue an attractive position that may no longer be around by the time the new year arrives? Understand that a position you find appealing will likely also appeal to others, at least some of whom will be willing to act promptly to pursue the opening. A bonus, no matter how sizable, is a one-time event, whereas the right new job can have a much more long-term, career transforming impact. Also, when considering the true value of an upcoming bonus it is important to weigh not the larger gross number trumpeted by firms in their annual announcements, but rather the smaller net number that will actually wind up in your pocket. Remember, that $50,000 bonus payment will really be worth more like $30,000 after the tax bite. It is still a significant amount of money to be sure, but less of a justification for staying in a job you are unhappy with/passing up a better opportunity.
The Bottom Line
It is of course important to consider upcoming bonus payments when contemplating a job change, but reflexively postponing a job search from the end of one year to the beginning of the next based on bonus considerations may be a serious oversimplification with negative consequences.