Associate Salaries, Killing Lockstep

Morgan Lewis: Details Still Sketchy on its Merit Based Compensation

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Back in July, Morgan Lewis & Bockius became one of the first firms to announce that it was doing away with lockstep associate compensation. Sadly, MLB is still lagging behind other firms in explaining precisely what that change means for its associates.
Morgan Lewis’s chairman, Francis M. Milone, sent out a firm-wide email to MLB associates today. In the words of one tipster: “It’s elusive and vague as expected.”
Regarding the death of lockstep, here is the key paragraph from the memo:

[W]ith respect to compensation, as I previously described, we have moved away from lockstep in favor of a compensation model that places more emphasis on individual performance and contributions. While an attorney’s relative performance has served as the driving factor in awarding bonuses in recent years, it has played less of a role in setting base salaries. This year, in establishing base salaries and bonuses, we gave increased weight to a wide variety of factors such as the quality of an attorney’s work, the value provided to clients, industry level, including pro bono commitments, nonbillable contributions such as Firm citizenship and business development efforts, client service, and experience level. After considering all of these factors, we awarded base salary increases of up to $25,000 and incentive bonuses of up to $35,000 to our highest performing associates. As I advised in my November video presentation, we did not reduce associate base salaries.

They used an awful lot of words to explain that they were not going to let people know how much they are making relative to everyone else.
Did anybody from Morgan Lewis receive a $25K raise and a $30K bonus? Perhaps the more important question is: did more than one person at MLB receive a $25K raise and a $30K bonus?
More from the memo and our tipsters, after the jump.


One thing that Fran Milone is trying to make clear is that the firm is not cutting base associate compensation. Will the firm be offering raises? The memo explains:

Salary increases are effective as of January 1, 2010. Incentive bonuses will be paid at the end of the month. Your local practice group leader will contact you over the next week with your specific compensation information.

What are MLB associates saying about their salaries? One of our tipsters reports:

It hasn’t shown up in my paycheck yet, but it appears I will be getting a raise. Not everybody is in my position.

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Well, that would make sense. Under a merit-based compensation system, not everybody can excel at “value provid[ing]” and “firm citizenship.”
But we expect more salary and bonus news from MLB as associates have their individual performance reviews over the course of the next two weeks.
Vague performance indicators, matched with announcements of top payouts that may be illusory for the vast majority of associates? Welcome to merit-based pay structures. I hope you like it.
Read the full Morgan Lewis memo below.
MORGAN LEWIS & BOCKIUS — MEMO — ASSOCIATE COMPENSATION
TO: All U.S. Associates
FROM: Francis M. Milone
Subject: Annual Evaluation
This week marks the beginning of the annual associate evaluation meetings. Before they start, I want to provide some general information regarding the evaluation process and our approach to compensation.
First, I encourage you to make your individual evaluation meeting productive and to have a candid discussion with your practice group leader and mentor regarding your performance and professional goals. The meeting provides a dedicated time to take stock of your career, and you should go into it prepared with questions regarding expectations and potential areas for growth and development.
Second, with respect to compensation, as I previously described, we have moved away from lockstep in favor of a compensation model that places more emphasis on individual performance and contributions. While an attorney’s relative performance has served as the driving factor in awarding bonuses in recent years, it has played less of a role in setting base salaries. This year, in establishing base salaries and bonuses, we gave increased weight to a wide variety of factors such as the quality of an attorney’s work, the value provided to clients, industry level, including pro bono commitments, nonbillable contributions such as Firm citizenship and business development efforts, client service, and experience level. After considering all of these factors, we awarded base salary increases of up to $25,000 and incentive bonuses of up to $35,000 to our highest performing associates. As I advised in my November video presentation, we did not reduce associate base salaries.
Salary increases are effective as of January 1, 2010. Incentive bonuses will be paid at the end of the month. Your local practice group leader will contact you over the next week with your specific compensation information. In the meantime, please feel free to reach out to your local practice group leader, Charlie Engros or Michele Martin if you have any questions regarding the evaluation and compensation process or any other matter.
On behalf of the partners, thank you for your continued dedication to the Firm and to our clients.
F.M.M.
Earlier: Morgan Lewis Delays the Death of Lockstep

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