Law Practice Management

Orrick Axes Lockstep Pay and Staffing, Amps Up Training in New Practice Model

In a press release posted on its website today, Orrick trumpets a new “talent model” that will, as the law firm puts it, “re-engineer the way the law firm delivers high-value legal service.”

Central to the plan is the elimination of a so-called lockstep pay scale that ups the ante each year for partner-track associates based on the year they graduated from law school, the 1,100-attorney San Francisco-based international firm explains in its press release. The plan will also eliminate so-called lockstep attorney staffing that assumes all associates in the same graduating class are capable of working at the same level.

Under the new plan, nonpartner attorneys will be divided into three groups: partner-track associates, career (i.e., staff) attorneys and custom-track associates. Within the partner-track group, attorneys will be classified as associates, managing associates and senior associates, with compensation based on which of the three groups they are considered to be a part of.

Partner-track associates will advance to the next higher-level associate group based on “well-defined performance criteria,” as their skills develop, the release recounts, explaining that Orrick is enhancing associate training, mentoring and feedback under the plan.

Career attorneys will handle tasks such as legal research and document review.

The custom-track associate category is intended to allow lawyers with outstanding skills to step aside from a partnership-track role, either temporarily or permanently, according to the release. “Associates on the custom track will be able to set a different pace for advancement or customize a long-term role that enables them to contribute in a meaningful way but does not necessarily lead toward partnership with the firm,” it explains.

“The traditional associate lockstep staffing and compensation model is based upon outdated assumptions,” says Laura Saklad, the firm’s chief attorney development officer, in the release. “Our new talent model recognizes that not all associates advance at the same pace, tenure is not a proxy for advancing skill and clients should not bear the cost of training associates. In the end, our goal is to deploy the right lawyer or professional for the right task at the right cost.”

While the new model won’t make any immediate change in attorney compensation, a pay overhaul is planned in 2010, firm partners tell the Wall Street Journal Law Blog.

In the future, bonuses will make up a larger percentage of total associate compensation, Siobhan Handley, the firm’s managing partner for innovation, tells the WSJ. And the amount of hours billed, while it will remain one factor considered in bonus awards, won’t be as heavily emphasized, she says.

Hat tip: Above the Law.

Related earlier coverage: “Pay Cuts Accelerate at Law Firms Across the Country” “Some Law Firms End Lockstep Pay for Associates, as Economy Plummets” “Orrick’s New Talent Model: 3 Stages to Partner; More Contract Lawyers”

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