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Drinker Biddle Makes Second Round of Associate Layoffs, Moves to Merit System
The Legal Intelligencer
November 02, 2009
Drinker Biddle & Reath conducted a second round of associate layoffs -- dropping a reported 22 on Friday -- and is set to inform the remaining associates that they will be placed in four levels as opposed to associate classes as the firm moves to a merit-based system.
Legal industry blog Above the Law reported Drinker Biddle has cut 22 associates, mainly in Chicago, with some in Philadelphia. A Drinker Biddle spokesman said the firm doesn't comment on personnel matters. The firm was also silent when it engaged in a round of layoffs in late 2008.
One source told The Legal Intelligencer the latest round of cuts was firmwide. The firm has nearly 300 associates currently listed on its Web site.
A firm spokesman said Friday neither firm Chairman Alfred W. Putnam Jr. nor executive partner Andrew C. Kassner would make themselves available to discuss either the layoffs or the firm's conversion to a competency-based program until this week.
According to a memo sent to associates Friday, there will be a meeting Wednesday to discuss the new system, which "reorganizes all associates into four 'levels' based on achievement of certain competencies instead of groupings by law school class or tenure at the firm."
Like their counterparts in other firms that have moved to competency-based advancement programs recently, Drinker Biddle associates will have to meet the competency requirements before moving to the next level. The program will begin with the start of the firm's next fiscal year on Feb. 1. Associates will be placed into their levels after the meeting and performance reviews will begin this year.
The firm instituted a training program for first-year associates this year that dropped their starting salaries to $105,000 from $145,000 in Philadelphia so that the associates could focus on intensive training programs rather than bill hours to clients. The firm said it was done in an effort to make younger associates more "sellable" to clients.
Drinker Biddle's spokesman said there are no plans to do away with the training program and that it was his understanding the new associates would enter at "level 1" after they completed the program.
He couldn't discuss whether compensation would be tied to the new model, but the firm has previously said that it was reviewing its associate compensation model.
Measures taken by the firm to retool the way young associates were used and bring in smaller numbers of young lawyers didn't prevent the latest round of associate cuts.
Part of the reason the firm instituted its training program for first-year associates was to avoid having to defer them. Putnam had said a deferment would not make the associates any more "sellable" to clients a year later. Drinker Biddle also gave offers to a smaller percentage of its summer associate class than it had in years past, though it was a bigger percentage than many of its Philadelphia firm counterparts offered this year. The firm gave offers to 68 percent of the class, or to 25 of the 37 2Ls it had in 2009.
When the training program was announced, Putnam had said the days of using "armies" of associates on matters were over and that the firm would most likely be more conservative in the number of younger attorneys it brings in. Marketing partner Gregg Melinson has commented in the last few months that the idea of first-, second- or third-year associates and beyond would most likely heed way to a different organizational model.
Drinker Biddle's announcement that it was moving to a competency-based advancement model comes on the heels of a similar announcement by Reed Smith last week. A small but growing number of national firms have switched to this model in the past year, while an even smaller group has been using it for years. Countless other firms have said they are moving from lockstep to merit-based pay, but they haven't quite moved away from the class-year model.
Reed Smith's program, which it named "CareeRS," looks to provide a road map for associates detailing the specific skills required at each of the newly created levels -- junior, midlevel and senior associates. Associates won't be able to move to the next tier until they have met those requirements. Compensation will be tied to those competencies by 2011 as well.
The model covers four main areas -- legal skills, citizenship, business skills and clients -- with a focus on nine core competencies within those areas. Those competencies include mastering fundamental legal skills, support of the firm's culture, demonstration of leadership and business skills, and understanding and effectively managing client needs.
Each of the three associate levels at Reed Smith will be tied to an "academy." The firm will continue its "Reed Smith University," which already offers 140 in-house courses. The new program will expand that training with courses and other opportunities tailored to the nine core competencies.
Moving to a competency-based advancement model involves a whole new form of assessment for firms and can be a daunting task in the larger firms. One legal industry watcher said similar models are being developed or contemplated by most large firms but only a few have made it to the implementation stage so far. He said it typically takes upward of a year to convert to the program.
Go to The Layoff List on AmericanLawyer.com.
