In what seems to be a shift from tradition, the well-established partner and associate lockstep compensation systems, in existence since the early 1900s, may need to be reassessed. Used extensively among old “White Shoe” law firms, the pay structure was designed to boost cooperation and collegiality among partners, and in time, associates as well. The concept then evolved into what’s known as the “Going Rate Firm” (GRF), where each associate’s compensation was determined by their graduation year, and annual raises were afforded to each member concurrently.
This gave rise to another system, the “Near Going Rate Firm” (NGRF), that offered nearly similar remuneration for associates but was slightly below the rates of the GRF. However, some now argue that this standardized compensation method should be replaced with a system that targets individual performance and productivity.
Under the umbrella of seeking positive change, the implementation of a pay-for-performance scheme might prove effective. This new approach could encourage better individual performance among associates, while also promoting a more productive firm culture. Interested legal professionals might want to study the ins and outs of the proposed system, its potential benefits and consequences, and the process of transitioning from the dated lockstep compensation structure to this new method. For further analysis, you may wish to read the full discussion on the topic here.