‘Cutting Edge’ Tiered Associate Programs Identify Those with Partner Potential
Some law firms experimenting with new pay models are making early assessments about which new lawyers have partner potential.
These firms create two levels of associates—those with partner potential and those without it—and they pay accordingly, the New York Times reports.
Law firm consultant Peter Zeughauser says these two-tiered programs are “cutting edge” and a good alternative to the traditional lockstep model that paid new associates the same starting salary and the same raises with each additional year of work, the story says.
The Times identifies two firms trying this new approach: Howrey and Orrick, Herrington & Sutcliffe.
At Howrey, about 20 associates are hired for the partner track. They make lower salaries—$125,000 the first year and $150,000 the second—and have lower billable hour requirements. During this time, Howrey trains and mentors these lawyers, who don’t move up to the next level until their skills merit the promotion.
Howrey also hires “specialty lawyers” who aren’t on the partnership track at a beginning salary of $80,000, the story says.
Other firms abandoning lockstep include DLA Piper; Sonnenschein, Nath & Rosenthal; and Wilmer Cutler Pickering Hale and Dorr, the American Lawyer reports.
But not all law firms are doing away with lockstep. Linklaters—considered something of a bellwether for the London market—has announced it is sticking with the system and avoiding pay freezes as associates move up the ladder, the American Lawyer says, citing a story in Legal Week.
The New York Times story highlights yet another approach, one deemed bad for morale by Indiana law professor William Henderson. The law firm is Kaye Scholer.
Eighteen out of 31 associates hired by the firm in 2008 were told they would be paid only $60,000 and they would be doing pro bono work. All accepted the offer. Then, two months after they began their new jobs, 17 out of the 18 were taken off pro bono, assigned to a document review project and paid an extra $30 an hour.
Henderson criticized the approach in an interview with the Times. “They won’t work toward building the franchise,” he said of the associates. “It’s like having a slow, low-level cancer around.”
