New Reed Smith pay structure sorts associates into 'the A squad and the B squad,' blog says
Reed Smith has confirmed that it is changing the compensation structure for associates, but it’s not getting into specifics after a leaked memo said the law firm was creating two tiers of associate pay based on billable hours. (Image from Shutterstock)
Updated: Reed Smith has confirmed that it is changing the compensation structure for associates, but it’s not getting into specifics after a leaked memo said the law firm was creating two tiers of associate pay based on billable hours.
Above the Law, which obtained the memo, called the two salary levels “the A squad and the B squad.” Reed Smith may be the first top firm to institute such measures, according to the blog.
Associate pay at Reed Smith will increase July 1.
The most junior associates will receive “straight Cravath matches,” meaning that their pay is $225,000 per the Cravath, Swaine & Moore scale, Above the Law explains. Other associates will be divided into two salary levels. Salary Level A is for those who bill 2,000 hours or more, and Salary Level B is for those who bill less than that.
Those at Salary Level A will receive market rate pay, except for the most senior associates, who will receive a somewhat lower-than-market salary of $415,000. Those in Salary Level B will receive “tens of thousands of dollars less in compensation,” the blog reports.
An associate placed in Salary Level B who manages to bill 2,000 hours for the year will receive a bonus that will put their salary at the level of Salary Level A.
Law360 noted another change. Rather than paying associates according to class year, Reed Smith is compensating them based on a ranking system.
Reed Smith confirmed a change in pay structure in an email to Law360, but it didn’t get into specifics.
“We are making changes to U.S. associate compensation in an effort to attract and retain the strongest legal talent to support our clients in their most sophisticated matters and to provide a place where our lawyers can thrive both professionally and personally,” the firm said.
Reed Smith also noted that it also has a discretionary and nondiscretionary bonus program. It also has an “Associate Life” program, “which provides extensive benefits to our associates and contributes to Reed Smith being a place where junior lawyers want to develop their careers,” the firm told Law360.
Updated March 26 at 10:30 a.m. to correctly report that those in Salary Level B will receive “tens of thousands of dollars less in compensation.”
