Lockstep compensation for associates appears to be the latest casualty of the recession. Last July, Orrick, Herrington & Sutcliffe dropped it in favor of a performance-based system, and almost 30 Am Law 200 firms have followed suit. Nearly all have set up three-tier structures, where raises, bonuses, and promotions depend on annual performance assessments. Within each tier, some small variation is possible, but most associates will be compressed in a narrow band. (Howrey made a similar move in 2007, before the recession.)

Coming after a year when many firms conducted layoffs disguised as performance reviews, trimmed salaries, and hacked bonuses, these new systems appear to be one more way for firms to cut associate pay. Joel Rose, who runs his own management consultancy, says, “Truth be told, a great many managing partners rued the day that they had to pay associates sky-high salaries along with lockstep. They were waiting for the opportunity to react, and this recession gave them that opportunity.”

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