TMG's Take...On Associate Compensation and Development 
A perspective on legal management issues from The McCormick Group.

Nearly every day, there’s an item on the legal news wires announcing that a firm has abandoned lockstep compensation for associates in favor of the so-called competency model, whereby promotion occurs only when certain legal skills and procedures are mastered. Skeptics see this as another transparent effort by firms to cut associate costs, following such steps as the reduction of first-year compensation (at some firms) to $145,000, deferred start dates for associates, and layoffs.
             
Proponents say that moving to the competency model will produce meaningful changes in the way that work is handled, the quality of the work produced by associates, and the high level of attrition. At the same time, observers warn that a shift to the competency model won’t be easy. Issues relating to workflow and evaluation will inevitably have to be addressed. (See "How to Shift Law Firms to a Performance-Based Compensation System" and "The Issues in Moving From Law Firm Lockstep to 'Levels' Compensation") Beyond that, evaluation issues will abound. How do you compare the skills required by corporate attorneys to those required by litigators? Even among the latter, an associate who handles insurance coverage matters needs to master an entirely different set of skills than one who handles white-collar criminal issues.
             
The shift to the competency model highlights the need for training—an issue that had already become increasingly important. You would think that in an era in which in-house counsel are skeptical that relatively junior associates add value, more firms would institute “boot-camp” style training programs to get new lawyers up-to-speed in hurry. But that hasn’t really happened. Most of the firms that have such programs, such as Howrey or Ford and Harrison, instituted them well before the current recession (One exception is Drinker Biddle, which announced a new training program earlier this year). And most professional development professionals tell us that cost-cutting has hit their departments at least as hard as other areas.
             
Moving to a performance-based compensation and promotion model is long overdue. However, if firms don’t put in the time, effort, and resources in assuring that such a model produces improvements in quality and morale, the result may be little more than superficial.

TMG's Take is a regular e-mail advisory produced by The McCormick Group. The company's Law & Government Affairs and Law Firm Services groups combine the expertise of more than 15 Consultants to help law firms fulfill all of their lawyer and administrative recruiting needs. TMG's Take covers topics across the spectrum of law firm management, including associate and partner compensation, growth strategies, marketing and business development, operations and facilities management, finance and accounting, professional development, and technology. Please direct all inquiries to Steve Nelson, Managing Principal at (703) 841-1700 or snelson@tmg-dc.com.