Merit-Based Compensation Backlash Has Ex-Partner Evaluating the Merits
Some law firms that adopted merit-based compensation as recently as a year ago are now abandoning the idea, according to a one-time BigLaw partner who wonders if that’s a good thing.
Writing for the Am Law Daily, former Kirkland & Ellis partner Steven Harper says a backlash against merit-based systems is said to be the reason for the about-face. Some had suggested that so-called competency models were enacted to cut associate compensation, and law firms are hoping that abandoning those models will help morale, he says.
Harper, though, sees a problem with lockstep. “Uniform compensation to a class allowed partners to postpone the day of reckoning for those with limited futures,” he writes. “Unpleasant news went undelivered.” Bonuses in such systems were tied to billable hours, without regard to quality.
Harper likes merit-based reviews—if they are based on legitimate distinctions rather than billable hours. But that’s a tall order for law firms focused on the bottom line. Meaningful reviews will require “individual assessments for legions of associates—sometimes hundreds in a single office,” he says. To do the job right, he says, law firms will have to devote nonbillable time to do the reviews the right way.
Harper envisions a system where associates also must devote time to reviews. “When firm leaders decide they really care about morale, they’ll ask associates to evaluate partners on mentoring, training, and overall humanity—and, at least to some extent, partner compensation will reflect the results,” he says.
