Back in 2009, when killing lockstep was all the rage, a number of large law firms announced that they would be moving to some form of a merit-based compensation system. Now that we’re a few years into those systems, how many firms have stuck with the plan? And which systems do associates prefer?
Of the 86 distinct Biglaw firms at which survey respondents work, 63% of the firms pay base salaries on a lockstep system, and the remaining 37% of firms use a merit-based system or hybrid-lockstep system for paying base salaries. The vast majority of respondents, 70%, say they prefer the lockstep model for base salaries because of its transparency and predictability.
For year-end bonuses, 70% of the firms utilize a merit-based or hybrid-lockstep system, while 30% have a lockstep system based either on class year or billable hours. According to 62% of respondents, the most preferred type of year-end bonus allocation system is a merit-based or hybrid-lockstep system.
After the jump, find out how various combinations of compensation systems measure up against market.
The official title of the NALPconference panel that I attended on merit-based compensation contained a playful shout-out to Sarah Palin: “How Is That Performance-Based Compensation System Working for Ya?”
The panel was originally supposed to have featured a representative of the now-defunct Howrey law firm. So the snarky answer to the question presented might be, “Not well.” (In fairness to merit-based compensation, however, Howrey’s dissolution didn’t have much to do with its model for training, promoting, and compensating associates.)
No mention of Howrey was made during the introductory remarks (or anywhere else in the discussion, for that matter). Rather, the panel focused on the positive — and offered useful advice for firms that are contemplating adoption of performance-based systems….
As part of a nationwide tour, Above the Law is coming to the great city of Chicago.
Join preeminent law firm management consultant Bruce MacEwen, Katten Muchin Chicago managing partner Gil Sofer, and JPMorgan Chase & Co. assistant general counsel Jason Shaffer for a panel discussion (sponsored by Pangea3) on the evolutionary and market forces bearing down on the law firm business model. Come on by Thursday, November 20, at 6 p.m., for thought-provoking discussion, food, drink, and networking.
Space is limited and there will be no on-site registration, so please RSVP
Average law school debt for graduates of private universities hovered around $122,000 last year. With only 57% of new attorneys actually obtaining real lawyer jobs, recent graduates have a lot to consider when it comes to managing their student loan payments. Thanks to our friends at SoFi, today’s infographic takes a look at student loan debt, including the possible benefits of refinancing for JDs…
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.