Associate Salaries, Salary Cuts

Morgan Lewis's New Compensation Structure = Less Base Compensation?

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A month and a half ago, Morgan Lewis announced that it was canceling its 2010 summer program and moving away from lockstep compensation. At the time, some people criticized me for looking at a move away from lockstep compensation as tantamount to a salary cut.
A firm could move away from lockstep to give its associates a larger share of the profits they generate. Is that what Morgan Lewis is thinking?
Morgan Lewis is in the process of holding a series of meetings with associates in various offices. The goal is to let the associates know what the firm is planning to do with salaries starting January 1, 2010.
According to a firm spokesperson, these meetings are preliminary in nature:

As our Chair announced earlier this year, we have decided to move away from lockstep to a performance-based evaluation and compensation model. We are still in the process of developing the new model and are meeting with associates around the firm to solicit their input. We have not yet determined or announced any specific terms of the model, so any reports regarding compensation cuts at this point are pure speculation and false rumor.

Associates who have been in these meetings have a different take on what’s going on.


While the firm is still developing its new compensation plan, associates are getting a bad feeling about what is about to happen to their salaries. One tipster reports:

Details still sketchy, but they made clear that all associates can expect a decrease in base salary between 10 and 40 percent. Also no lockstep, and also a complicated merit pay system based on 10 factors. Major changes, and definitely pay cuts.

Another tipster, from a different office, texted this ominous message:

In MLB compensation meeting now. Base salary will be slashed, 30% maybe. Want to yell, will bend over.

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Other tipsters, in offices where meetings have not yet been held, also report that they’ve heard the new system will include a major cut to base pay and a 10-factor test for bonuses.
Is Morgan Lewis serious about soliciting input from its associates? Let’s not jump to conclusions. It could be that MLB associates are asking for a double-digit salary cut.
Earlier: Morgan Lewis Cancels 2010 Summer Program

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