Decreasing salaries and abandoning lock-step are not things that bring joy to the hearts of hard-working associates.
But law firms are spinning such moves as better for the associates, the firms and, dare they say, the legal profession, in the long run.
Foley Hoag informed associates, via memo, that it is reducing base salaries, a move that is part of a “stategic reform designed to improve attorney development and strenthen [their] ability to recruit and develop talent…”
Above the Law broke the news and has the full memo.
Unlike firms like Morrison & Forerster, which is reducing only first year salaries for now, the Foley Hoag cuts extend at least to third years, with some more senior attorneys getting a pay decrease as well.
Foley Hoag expects bonuses, its memo says, to become a larger part of associate pay — meaning more time each year for the firm to guage what it can afford to pay as well as who deserves what.
While most of the Foley Hoag cuts were made on a lock-step basis, other firms are looking to reduce overall pay by compensating associates on a hybrid lock-step and merit-based model.
Reed Smith will group associates as junior, mid-level or senior, depending on their achievements in certain “core competencies.” (To add a little levity, even if unintentioinally on Reed Smith’s part, the firm’s program is called CareeRS.)
This means, notes the WSJ Law Blog, that a high achieving third-year could outrank a less developed fifth-year.
The move was primarily ito appease clients — “The most painful conversation you can have with a client is to tell him that that all of a sudden, you’re charging more for an associate just because the associate has aged a year,” Reed Smith chairman Greg Jordan said — but the firm believes in the long run that associates will benefit by receiving detailed feedback earlier in their career. Jordan also told the Law Blog that the firm’s training will have to improve or their program will fail.
No associate likes a pay cut, but it’s hard to ignore that merit-based promotions and pay are the way almost every other job in the world works. Most associates we hear from, especially those who are buried in work while some of their counterparts leave at 7:00, don’t mind the idea of being paid based on performance.
But even if it helps to stabilise firms in the long run, compensation change-ups like these do not feel good when they are announced. A field filled with attorneys who were groomed to expect stability seems to offer fewer guarantees each day.
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