The legal industry loves its traditions, and one of the most entrenched — embraced by virtually every Am Law 100 firm — is lockstep associate compensation. But over time, even the best traditions can become anachronisms, and that is the case with lockstep. For several years, the Law Firm Group (LFG) at Citi Private Bank has been urging firms to get rid of lockstep, in which associates receive an automatic annual pay raise, promotion and bonus. In its place, the LFG advocates a performance-based program, in which associates are paid and promoted according to their mastery of skills and competencies, and receive bonuses based on individual and firm performance.
Until recently, the LFG’s campaign to kill lockstep fell largely on deaf ears. But the recession brought home many of the problems inherent in lockstep. In the last year, several Am Law 100 firms have announced that they have shifted to, or are in the process of shifting to, a performance-based program. An LFG survey in July revealed that almost half of the top 50 firms in The Am Law 100 said they plan to switch to some form of performance-based system.
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