The new $50,000 bonus for junior lawyers

A billing timeout to start: PwC China has told its clients that it expects Chinese authorities to impose a six-month ban on the company from doing business as early as September. The ban is said to be part of a penalty for the audit of bankrupt real estate developer Evergrande.

In today’s newsletter:

• Bonuses for young lawyers reach new highs

• Walmart sells shares in Chinese e-commerce giant

• US court overturns non-compete clause

$50,000 referral bonuses for junior lawyers

Would you like to buy a new Tesla– Or charter a boat off the Amalfi Coast?

If you’re a junior lawyer at one of the largest U.S. law firms, all you have to do is recommend one associate to the group. The prize: $50,000.

As the war for talented lawyers between law firms reaches new heights, groups are offering their junior lawyers up to $50,000 to recommend well-known young lawyers for jobs, report the FT’s Suzi Ring and DD’s James Fontanella-Khan.

Part of the bonus rush is due to the return of dealmaking after high interest rates cooled the market. (Mars closed a deal to buy last week Kellanova for USD 36 billion.)

Kirkland & Ellis increased its existing referral bonus from $25,000 to $50,000 last October and recently extended the program through January 2025.

A&O Shearman followed suit and introduced the same bonus for referrals from US employees in May (when the British “Magic Circle” company Allen & Overy and New York’s Shearman and Sterling officially merged). Goodwin And Paul Weiss also offer the same high amount.

As a concept, referral bonuses are not new. But in recent years, $50,000 has been considered an outlier, said Katherine LoansonManaging Director at Legal Headhunter Kinney Recruitment in New York. Now they are practically the norm.

The size of these payments has increased sharply since 2021 and is just one sign of the increasing war for top talent that is gripping law firms, with junior salaries and welcome and retention bonuses all increasing.

In London, Britain’s “Magic Circle” firms are trying to defend their territory by raising salaries for newly qualified lawyers to £150,000 as their US competitors enter the market.

But when it comes to referral rewards, the UK still lags behind its counterparts across the pond.

One magic circle firm in the UK pays its employees £15,000 for successful referrals, while lower-end firms pay up to £5,000, say people familiar with individual firms’ offerings.

With rewards of this magnitude, you could perhaps afford a nice vacation instead of a Tesla or a chartered boat.

Walmart changes its China strategy

Walmart says goodbye to JD.com.

The world’s largest retailer has sold its entire stake in the Chinese e-commerce giant to focus on expanding its own brands in the country.

In a submission to the US Securities and Exchange CommissionWalmart announced that it has sold its nearly 10 percent stake in JD.com for $3.6 billion. JD.com made $390 million from the stock sale, but still saw its share price plummet.

The news that another major foreign investor is exiting Chinese technology companies pushed the share price down by two percent. Hang Seng Tech Index.

Walmart’s journey with JD.com began in 2016 when the company replaced its Chinese e-commerce site, Yihaodianfor an initial stake in the group. Later that year, the company paid more than a billion dollars to double its stake.

Walmart has bought in to learn about Chinese retail from locals, but today it can manage just fine on its own.

Chinese buyers flock to the Sam’s Club Member stores offer high-quality, safe products at great prices, and the club’s pink-uniformed delivery drivers are a common sight on Beijing’s streets.

JD.com, on the other hand, is struggling to stand out from the growing number of Chinese e-commerce platforms. Founder Richard Liu He is planning to expand overseas from a mansion in central London.

US court blocks non-compete clause

The US Federal Trade Commission caused a stir in April when the company announced a ban on non-compete agreements – rigid contracts that prevent employees from moving to competing companies.

But on Tuesday, the ban suffered a severe blow when the U.S. District Court Judge Ada Brown in the Northern District of Texas Blocking the scheme. She said the regulator lacked the authority to stop the arrangements.

The rule is “arbitrary and capricious because it is unreasonably broad without reasonable justification,” Brown said in the decision.

But the FTC under the leadership of Lina Khanprobably won’t give up yet.

“We are seriously considering a possible appeal, and (Tuesday’s) decision does not prevent the FTC from enforcing non-compete agreements through individual actions,” an FTC spokesman said. Victoria Graham it said in a statement.

The rule was due to come into force in September and would have invalidated contract clauses prohibiting employees from working for a competitor of their employer in certain regions for a certain period of time or from setting up a competing company.

Non-compete agreements have long been a hallmark of Wall Street: major banks, brokers, asset managers and hedge funds all use them.

Sometimes these companies even require non-compete agreements and confidentiality agreements, which further increase the restrictions on employees.

It was believed that the rule would undermine long-standing Wall Street institutions, such as the ability of corporations to enforce paid leave or withhold deferred bonuses when an employee moves to a competitor.

While the ban hangs in the balance, Wall Street’s biggest firms are undoubtedly working on contingency plans for both scenarios.

Job change

• Disney has named James Gorman as Chairman of the Succession Planning Committee. The former Morgan Stanley The CEO joined the Board earlier this year and oversaw the Bank’s recent succession planning.

• Western asset management companylong-standing Co-Chief Investment Officer Ken Leech has taken a leave of absence pending a government investigation. Michael Buchananwho previously served as Co-Chief Investment Officer alongside Leech, will assume the role with immediate effect.

• Paul Weiss has stopped Asda Co-owner TDR CapitalTop Lawyer David Holdsworth while the law firm in London continues to expand.

Intelligent reading

Coal moment Coal producers in the US have been plagued by bankruptcies and ESG issues for years. Now they are a huge moneymaker for their shareholders, writes Lex.

Schwab’s resurrection Charles Schwab makes a lot of its money in banking. Now the company is trying to restructure the business – and investors are skeptical, reports the Wall Street Journal.

Flying cars The idea of ​​flying cars has long been a pipe dream or science fiction, but Boeing and upstarts like Ehang and Joby are banking on the multibillion-dollar potential, Bloomberg reveals.

News overview

BlackRock’s support for ESG measures falls to new low (FT)

Five bodies found on Mike Lynch’s superyacht (FT)

Oaktree is close to acquiring a majority stake in two B Riley units (Bloomberg)

Target praises “remarkable” consumer resilience in the face of positive sales (FT)

Britain needs private financing for transport projects based on the European model, according to a study (FT)

CrowdStrike sharply criticises its competitors’ “shady” attacks following a global IT outage (FT)

Ford cancels production of electric SUVs and warns of write-downs of $1.9 billion (FT)