As associate salaries climb (further) into the stratosphere, will firms start experimenting with different compensation schemes? Is lockstep compensation for associates headed for the dustbin of history?
As we mentioned yesterday, Thelen Reid just moved to a two-tier system. And now we’re hearing that Howrey LLP may have something odd up its sleeve.
Today the firm had a meeting / conference call about compensation matters. Here are two reports:
“They are planning to adopt a sweeping salary change that amounts to ‘it depends.’ It seems that they will determine salary based on individual evaluations and various forms of progress indicators. Who knows what this means. They said that “market rate” is not the upper cap, and that all-stars could make more than market. This plan is basically final, but they will be speaking to people in focus groups to fine tune the policy.”
“Switching to a ‘competancy’ model as of 2008. First years at 160 but from there based on skills – some above and some below market. Details not released yet as focus groups will be used to fine tune the program.”
Interesting, albeit vague. We’re eager to see what results from this process.
Is Howrey adopting an innovative approach, one that will result in a more flexible and/or meritocratic associate compensation structure? Or is it just an attempt by the firm to get away with paying below-market salaries?