McDermott abandons associate lockstep in favour of merit-based pay

McDermott Will & Emery has become the latest firm to move away from lockstep and introduce a merit-based pay system for associates, reports The National Law Journal.

The process will result in pay cuts for some of the firm's associates, with first-year salaries set to drop from $160,000 (£98,000) to $145,000 (£89,000) this year, according to Jeffrey Stone, the chairman of the firm's management committee.

Associates who started at the 1,000-lawyer firm last year will see their salaries reduced as of 1 April, while those starting this year came in at that lower level, said Stone, although he added that there will be opportunities to earn more through a bonus.

By next year, associates and senior associates will be placed in one of three pay levels based on skills achieved and business experience. Partners will evaluate associates to determine at which level they belong.

Stone emphasised that the change is not a cost-cutting move, but rather an effort to reward associates who are the best performers and to provide greater value to clients by encouraging such work.

"The old lockstep system rewarded longevity. It failed to reward increases in competence," Stone said.

Stone also said that some associates' hourly billing rates may be lowered as part of the change, making their services more competitive.

McDermott follows a number of other US firms in shifting associates away from the lockstep model, including Reed Smith, Wilmer Cutler Pickering Hale and Dorr, and DLA Piper.

McDermott's training will also be adjusted to focus on the core competencies deemed the most significant at each pay level. Individual practice groups will set distinctive criteria appropriate to their areas.

The National Law Journal is a US sister title of Legal Week.