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This explains why law students apply to clerkships, not why firms pay bonuses for former clerks.



Not really. Firms want clerkships to be a valid signaling device for excellence. If there were no bonuses, then clerkships would be seen as appealing primarily to students who are more well-off, because if you have $200k in loans you don't want to take a clerkship that pays 1/3 of starting salaries firms (and less if you include bonuses).

One effect of having clerkship bonuses is that clerkships become economically viable for anyone, so long as you can survive on your clerkship salary for 1-4 years.




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