While expressing a commitment to maintain its new, incredibly transparent, merit-based salary structure, Orrick is
moving its base salary back to reaffirming its commitment to $160,000 for first-year associates working in major markets. That’s right, the time for $145K in big offices is almost at an end.
UPDATE: Initially spokespeople from Orrick termed the move as one back to $160K, but our previous reporting didn’t indicate that Orrick ever came off the $160K starting salary — even after its switch to merit-based compensation. Sources now confirm that Orrick was at $160K all along; today’s salary announcement will primarily affect veteran associates.
From the memo associates received from Orrick’s CEO, Ralph Baxter:
I am pleased to announce an increase to our 2011 base salary schedule for partner track associates in our US offices. This salary schedule will be effective January 1, 2011. We will continue to monitor the legal market and will make any further adjustments necessary to remain competitive.
This change in our salary scale reinforces our continued commitment to be competitive with the world’s leading law firms and to attract and retain the best legal talent. We will continue to ensure that your total compensation reflects the increasing value you contribute to our clients and the firm through the new talent model’s performance-based career progression and bonuses that are driven by merit rather than solely by billable hours.
And there’s more good news: Orrick bumped up each of its associate “tier” levels. This means that, assuming Orrick associates get promoted “on time” relative to their peers at lockstep firms, Orrick’s base salary will once again match the market…
Here’s the 2011 Orrick salary scale, in an easy-to-understand chart:
It’s no coincidence that the few Biglaw firms who were off of the $160K starting salary have seen the light of
payday just as fall recruiting gets started in earnest. If you want to compete for top talent, you’ve got to pay top dollar.
Beyond that, this coming bonus season is going to set up a very interesting test for the merit-based compensation systems. Firms using these systems have been touting the possibility of above-market bonuses for top performers. If these top performers are now getting paid the same base salary as their peers at lockstep firms, then above-market bonuses could actually mean something.
Stay tuned. One of these years, firms are going to stop playing follow the leader behind Cravath or S&C. Maybe this will be the year.