It’s not easy putting a price tag on a law firm associate.
When Morgan Lewis announced in July that it would be moving toward merit-based pay, the firm did so because, like most firms these days, it needed to reduce expenses and respond to demands from clients in the “new reality” of the legal world.
But four months later, the firm has put its move from lock-step to merit-based pay on hold “indefinitely,” though not forever, Above the Law said.
As firms continue to move to a more individualized pay scale, the trick is of course going to be how to do it fairly. And though law firms have always been rare in that everyone at the same year gets the same compensation, firms do have a whole lot of factors that would make truly individualized pay a lot of work.
Firms are generally divided into sections – corporate, litigation, etc. And then there are subgroups within those groups, and within those subgroups, partners often head up even more specialised type of work.
Some associates work with multiple partners and some work with just one, but no matter what, the vast majority of partners in large firms never work with a vast majority of the associates.
And that means evaluating an associate’s “merit” would require gathering a lot of information from a lot of people and then trying to find a way to ensure some sort of continuity to those reports. There are always bosses who are tougher or more critical than others, but if you are the associate who works only with the hyper-critical partner, you are necessarily going to be frustrated by your peer down the hall who spends his time working with Mr. Happy Go Lucky and ends up with a better salary because of it.
Further, partners themselves often disagree on associate pay, and since associate salaries come directly out of the pockets of partners, partners will be inconsistent on their pay suggestions for associates depending on how they feel about associate pay in general.
Add to all of the above the fact that practices are simply cyclical and what makes up “merit” in an attorney highly objective, associate evaluations will need to be frequently reevaluated to be fair.
The truth is many firms have a hard time getting yearly evaluations to their associates, which makes us think partners might, in the end, rather default to lock-step than put in the work necessary to create a reliable system.
Merit-based pay is something that sounds completely rational, but it’s also something that, in the politics-ridden mini-fiefdoms that are law firms, is nearly impossible to do fairly.
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