November 9, 2010 6:31 PM

Flip-Flopping on Salary: Morgan Lewis Will Stick with Lockstep

Posted by Erin Geiger Smith

Sixteen months after announcing plans to move away from lockstep compensation and implement a merit-based pay system for its associates, Morgan, Lewis & Bockius has decided to keep things as they are. Late last week, firm chairman Francis Milone informed associates via videoconference that they will receive base salaries in 2011 equal to the prevailing market rate for their class year. Also, the firm will maintain its bonus pool--those payments have always been merit-based.

The news was first reported by Above the Law. Our colleagues at The Legal Intelligencer, a sibling publication, have this story on the decision.

Why the change of heart? Morgan Lewis managing partner for personnel Charles Engros, Jr., told The Intelligencer that the firm initially was intrigued by a full merit-based model. Then, they decided to get some feedback. "In talking to associates and clients and partners, we concluded that it really was going to be potentially disruptive and not really help us achieve what we wanted to achieve any more than making some tweaks...to our current system," Engros said.

In addition to attorney fears that peer cooperation could be compromised, associates were unclear as to whether they would be in direct competition for advancement, Engros said. He also noted that clients did not have a preference for either method of compensation.

As the Intelligencer reported, firms like Reed Smith, Drinker Biddle & Reath, and Cozen O'Connor have moved ahead with varied compentency-based models.

Maintaining the lockstep method is likely reassuring for some associates. In February, senior reporter Julie Triedman of The American Lawyer examined whether merit-based systems are one way to enact salary cuts, noting that firms could cut costs--which firm doesn't want to do that?--simply by promoting fewer lawyers to the next tier.

Some Morgan associates, however, may find themselves on a new tier altogether. In addition to the lockstep announcement, the firm said it is creating a new "career track" for some lawyers that will enable the firm to retain associates that began on the partner track but will not make partner. (The firm already has an alternative track for those associates who choose not to be on the partnership track.) Engros said the firm hasn't yet determined how large the class of "career track" associates will be.

While Morgan Lewis associates now know how much they'll make next year, this other piece of the announcement introduces another question to obsess over--is this new "career track" in their future?

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