Friday, June 29, 2007

Merit-Based Pay at the Law Firm

Howrey "is ditching its lockstep compensation for its associates. Traditionally, Big Law pays its associates based on seniority — $160,000 for first years, $170,000 for second years and so on. But beginning next year Howrey reportedly will introduce a merit-based system of advancement and compensation for associates."

Look, merit pay, for teachers, lawyers, whomever, is great in theory. But it's very hard in practice to make subtle distinctions in performance between people in these professions. It's not like baseball, where performance is fairly easy to measure. At Howrey, the result is likely to be that everyone who does not get the top salary will be pretty pissed, which means that most of the lawyers there will be even unhappier than usual.

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