The debate about reforming associate lockstep pay in favour of an increase in variable and more performance-related remuneration structures is set to intensify, according to the Legal Week benchmarker survey. The survey, of more than 900 lawyers, shows that the debate on pay, next to conversations about alternative fee structures and globalisation, is the single biggest issue on the minds of both partners and associates relating to terms and conditions, and one expected to be addressed by respondents over the next five years. A significant number of partners believe that associates will be paid on merit rather than experience or lockstep by 2015, with respondents suggesting that such a change might have more impact on the profession than other structural reforms and multiskilling among associates.
Discussions are already taking place among senior management teams, with 47% of partners suggesting they will be reviewing their pay structure over the next five years. Twelve percent are already implementing such plans and 10% are preparing to affect them in future. Three-quarters of partners, however, suggested that performance-related pay (PRP) should be used to reward associates, as compared to 66% of associates. Only 7% of partners and 18% of associates backed lockstep, with one partner saying: “The firms that will succeed will have introduced true merit-based remuneration for associates,” enabling associates “to be made to feel more a part of the firm’s growth and strategic direction”. Although partners are clearly signalling such changes in associate pay practices, these are not necessarily being communicated to associates, 39% of whom say they are not aware of any plans to change law firm pay structures and 22% suggesting such plans, if discussed, had not yet been implemented
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