Associate Salaries, Killing Lockstep, Salary Cuts, Salary Freeze

Winston & Strawn Kills Lockstep and Adopts a 'Black Box' Compensation System

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Friday brought good news and bad news for Winston & Strawn associates.

The good news is that the double salary freeze, which has apparently resulted in first- through third-year associates at Winston all earning $160,000, may be thawing. Managing partner Thomas Fitzgerald sent a memo — this time to its intended recipients — indicating that raises are on the way.

The bad news is that Winston associates don’t know how much of a raise they’ll be getting — and the most they can hope for is a salary that matches the market. The memorandum contains the standard $160K salary scale — 160-170-185-210-230-250-265-280 — but states that “[s]alary levels in each associate class will range up to the maximum base compensation levels set forth” in the memo (emphases added).

The Winston associates we’ve heard from are upset. They’re unhappy not just about the move away from lockstep, but over the firm’s failure to set forth in detail how salaries will be determined. Most of the other firms that have abandoned lockstep have set forth elaborate systems for evaluating associates to determine their compensation and advancement. The Winston memo simply states: “Individual associate salaries will be determined on a case by case basis based on seniority, performance and productivity factors and will be communicated separately to each associate.”

This is a “black box” approach to compensation. It’s used by other big firms — e.g., Jones Day — but it’s a significant departure from Winston’s historical practice. It’s not what Winston associates signed up for when they joined the firm.

But then again, thanks to the Great Recession, lots of Biglaw associates aren’t getting what they expected when they joined their firms. And if associates aren’t happy, with compensation or any other aspect of their employment, their firms will tell them: you’re free to leave. In the words of an unemployed woman quoted in this weekend’s New York Times, “There are no bad jobs now. Any job is a good job.”

There’s a little more bad news about Winston associate salaries. Find out what it is, and read the full Winston & Strawn memo, after the jump.

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From a Winston tipster:

They made [the raises] retroactive to February 1 only, instead of January 1 — claiming that the reason is that Winston’s fiscal year starts on Feb. 1. Yet, every previous year that they gave a raise, it was retroactive to Jan. 1, so I’m not sure that excuse holds water.

But this is a relatively minor matter, worth a few thousand bucks (at most). The real headline is that Winston is no longer lockstep — and that it has adopted the market salary scale as a ceiling for associate comp.

Here’s the complete memo. Winston associates, read it (again) and weep.

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WINSTON & STRAWN — MEMORANDUM — 2010 ASSOCIATE BASE COMPENSATION

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