Sonnenschein, Nath & Rosenthal is the latest Am Law 200 firm to move away from lockstep compensation for associates, and in its decision — and others — we are beginning to see a new consensus emerge on how exactly firms believe a merit-based system should be structured.
Like Orrick, Herrington & Sutcliffe, Sonnenschein’s plan, which the firm is announcing Tuesday and will roll out in early 2010, will involve a three-tier system in which associates will advance once they meet various merit-based criteria. The firm did not immediately release base salary figures for associates in each tier. Bonuses for individual associates will be tied to the same criteria instead of being linked “almost exclusively to billable hours,” as under the old system, the firm said. The system is designed so that “high-performing associates will be able to earn above-market compensation faster than they would have under the old model,” the firm said.
