Lawyers Compete, Except in Bonuses

An article in today's New York Times called "Lawyers Compete, Except in Bonuses" describes how 12 elite New York law firms just raised bonuses in identical amounts.  The article mocks the business sense of this since bonuses are for people who are already on board, so it won't help recruiting.  But this thinking is based on a former era when these firms were the only game on town if you wanted to join a law firm.

Today law students have the choice of numerous top firms such as Latham & Watkins, Jones Day and DLA Piper if they want to be in New York.  Recruiting is incredibly competitive, so if 12 firms can maintain the myth that they are the elite, that will help them recruit top law graduates in competition against those outside the 12.  That makes good business sense.