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December 8, 2009 3:13 PM

DLA Abandons Lockstep

Posted by Zach Lowe

DLA Piper today became the latest Am Law 100 firm to abandon lockstep compensation for associates, according to The National Law Journal, an Am Law Daily sibling publication. The firm will divide associates into three tiers and pay salaries that equate to about 85 percent of their current salaries, the NLJ reports. The firm's management will have discretion over the remaining 15 percent of salaries.

The firm will decide (at least initially) who gets placed into which tier based mostly on seniority, with associates expected to remain in a tier for somewhere in the range of two-to-four years. So this is certainly not a complete break from a seniority-based pay system.

Associates in tier one (and working in major markets) will earn a base salary of $145,000; associates in level two will earn between $170,000 and $200,000; and salaries in the highest tier will be about $250,000, a firm spokesman told the NLJ. Associates will also be eligible for bonuses. 

The firm expects the new system will end up paying most associates--who also will be eligible for bonuses--more than what they earn now, the NLJ reports. Those bonuses--like an associate's general placement within the tier system--will have nothing to do with the number of hours the associate bills, the firm tells the NLJ.

Orrick, Herrington & Sutcliffe announced plans to move to a similar three-tier system last week, joining a growing group of firms saying goodbye to year-by-year lockstep. That group includes Howrey, Morgan, Lewis & Bockius and Dorsey & Whitney.

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