JD Journal » merit-based pay

Reed Smith Joins the Move Away from Lockstep

joshua — Tue, 27 Oct 2009 21:25:19 +0000

Citing client concerns with billing practices, Reed Smith announced a new compensation plan today. The new plan, which the company cleverly named CareeRS, separates associates into three tiers and three compensation plans based on performance. Associates will either be junior, mid level or senior, depending on how well they have demonstrated “core competencies”.

Founded in 1877, Reed Smith LLP employs 1500 attorneys in 23 cities worldwide. The firm counsels 28 of the top 30 US banks, and 10 of the world’s 12 largest pharmaceutical companies. In addition to the United States, Reed Smith has offices in the United Kingdom, continental Europe, Asia and the Middle East.

Squire Sanders Moving from Lockstep

joshua — Wed, 21 Oct 2009 00:32:18 +0000

Squire Sanders has joined the march away from lockstep compensation, and will implement a merit based pay system starting next year. Details are still being worked out. The firm says the move away from lockstep is due to the changing economy and the expectations of clients.

Squire Sanders has had a rough year. As we’ve reported previously, they’ve made several cost cutting decisions, including lowering base salaries, layoffs, and cuts to their summer program.

Squire Sanders was founded in 1890 in Cleveland, Ohio, and has 32 offices today in 15 countries.

Morgan Lewis Cancels 2010 Summer Associate Program

Erik Even — Tue, 14 Jul 2009 20:44:07 +0000

Morgan Lewis has announced a series of steps designed to save cash, including the complete cancellation of its 2010 Summer Associate Program.

The firm will do no on-campus interviewing this Fall; and current summer associates are seeing their start dates pushed back to 2011.

The firm also intends to end lock-step compensation in 2010, switching to a merit-based system.

Morgan, Lewis & Bockius LLP is a law firm that was founded as Morgan & Lewis in Philadelphia in 1873. It has 1,400 lawyers in 22 offices worldwide.

Sonnenschein to Slash Associate Pay [Update]

Erik Even — Tue, 26 May 2009 16:40:43 +0000

Sonnenschein Nath & Rosenthal plans to cut associate salaries, beginning June 1st.

First year salaries, previously a Biglaw standard $160,000, will be reduced to $145,000.

Sonnenschein seeks to make associate salaries performance-based, and will create an associate-partner committee to work out the details. This year, the firm will have a merit-based bonus program; bonuses will be paid in January 2010.

Sonnenschein Nath & Rosenthal LLP is an international law firm with 700 lawyers and other professionals in the United States and Europe. Founded in Chicago in 1906, it has 14 offices in the US and Europe.

UPDATE

Online sources have obtained further details about the salary reductions for Sonnenschein associates — the longer a lawyer has been with the firm, the more their pay will be cut.

If an associate started in 2004 or earlier, the pay cut is 15%. Those who started in 2005/6 take a 14% cut. And the 2008 class is taking a 10% cut.

Nixon Peabody Slashes Salaries

Erik Even — Mon, 27 Apr 2009 20:52:33 +0000

Nixon Peabody, which laid off 20 attorneys and 36 staff in February, is now cutting salaries.

All associates, including incoming and summer associates, will see a reduction to $145,000 in Boston, Washington DC, New York, Chicago and California; less in other locations. There will also be additional performance-based cuts.

Meanwhile, associates can look forward to merit-based bonuses, based on such criteria as hours worked, new business brought in, community leadership, and “extraordinary contributions to the welfare and advance[ment] of the firm.”

In other words, management will pay whatever they want to pay, with criteria that squishy.

Nixon Peabody LLP is one of the largest multi-practice law firms in the US, with offices in 17 cities in the United States and one in London, and more than 700 attorneys in 25 major practice areas.

More Firms Adopting Merit-Based Pay for Associates

Erik Even — Mon, 16 Mar 2009 16:33:24 +0000

Many law firms are using the economic meltdown as an excuse to end seniority-based pay for associates, adopting “merit-based” systems similar to those used outside the legal profession.

Examples in the US include Orrick, Herrington & Sutcliffe, Shearman & Sterling and WolfBlock.

Firms are also cutting salaries for starting associates, just two years after top firms raised pay to compete for talent.

“In the current economic crisis, we see the final demise of the Medieval guild in the American legal profession,” consultant Joel Henning tells Bloomberg.

Orrick will introduce new tiers of associates, replacing the traditional single-track system where some become partners who share in the firm’s profits after about eight years. Under the new structure, associates will be able to stay at the firm permanently, drawing salaries; and will not have to leave the firm if they are unwilling to work long hours.

Clients typically pay much less for work done by a law firm associate than that performed by a partner.

Howrey introduced a similar plan in January, and McGuireWoods started one two years ago.