Steptoe & Johnson LLP’s latest strategy in the highly competitive legal industry is introducing a unique compensation model for associates, aiming to address both competitive pay scales and work-life balance concerns. The firm has rolled out a novel system allowing associates to select their own billable hour targets, with compensation adjusting accordingly. This system, set to be implemented in the new year, aligns with efforts to rival top industry firms while catering to the desire for a balanced lifestyle.
The system permits associates to decide their yearly billable hours ranging from 1,800 to 2,200, influencing their compensation with potential earnings up to nearly $582,000 based on seniority and billable hours focused. The firm’s approach contrasts with the traditional “Cravath scale,” and allows for greater flexibility, as seen in a recent survey on associate satisfaction.
The new policy emerged from feedback solicited by Steptoe from its associates, reflecting diverse career stage considerations and promoting a structured yet adaptable career path approach. “To my eyes, this is the way of the future,” commented recruiter Kate Reder Sheikh from Major Lindsey & Africa.
While Steptoe is not on par financially with giants like Kirkland & Ellis or Cravath, the initiative showcases a strong response to associate dissatisfaction with compensation linked closely to high billable hours in an environment demanding round-the-clock availability. The firm seeks to distinguish itself by allowing its associates an element of choice regarding their work intensity, resonating well with those looking for a less disruptive work schedule despite potentially lower pay, Reder Sheikh noted.
However, there are concerns this flexibility could impinge on client service if a significant number of associates opt for minimum billing targets. “Clients are very demanding and have many options in the marketplace,” remarked Matt Schwartz, a recruiter with Garrison. Steptoe has indicated it will address potential coverage issues if they arise under the new system.
This move is part of a broader effort by Steptoe to enhance the associate experience, following a low ranking in the American Lawyer’s 2024 mid-level associate satisfaction survey. Despite potential challenges, this initiative marks a shift in Big Law firms’ approach to better align with associates’ personal and professional aspirations.
Read the full details of this compensation model on Bloomberg Law: Choose Your Own Adventure Pay Gives Steptoe Edge in Comp Wars.