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Yes.
Rising Star
Yes. Partners at law firms most likely finally took Econ 101.
Yes. Honestly if no one matches this small increase, what are the actual consequences? Cravath, Kirkland, Skadden, and Sidley can all not match and law students will still choose these firms over milbank because of prestige. Same goes with laterals.
Now if this was a larger increase over market, then it might change things.
Rising Star
It's rather costless to apply to firms, so I would send some applications and see if anyone would bite (despite the after tax amount to be really small).