Orrick Gives the Boot to Lockstep-Associate Model

[WSJ_law_blog]

Add Orrick to the list of firms rethinking the associate experience.

The firm announced today it will no longer promote associates in lockstep fashion, according to their start date. Instead, junior lawyers will now be fitted into one of three slots: the “partner” track for gunners; the “custom” track for lifestyle-minded associates who plan to make partner in their own sweet time, or not at all, and finally the “career attorney” track for those who will focus on more mundane work, such as document review. (For the visually inclined, click here for a graphic of the three-tiered associate model.)

The way it would work is this: Most law grads will begin in the “partner” track, where they will toil for some period of time. Later, some percentage will either choose or be encouraged by the firm to move to the “custom” track. Many “career attorney” track lawyers will be hired into that role.

We caught up with Siobhan Handley, Orrick’s Managing Partner for Innovation (cool title!) and Laura Saklad, the firm’s Chief Lawyer Development Officer (ditto!), to learn a little more about what’s afoot at Orrick.

For starters, the new associate scheme may mean some “some reduction in how many people make partner,” Handley says.

The firm, however, is not immediately altering its associate compensation scale, even for associates who are bumped off the partnership track. But Orrick will adopt a new comp schedule in 2010. The “custom” track lawyers will be paid some amount less than the “partner” track lawyers. In addition, Handley says, bonuses will make up a larger percentage of associates’ overall compensation. Bonuses, she says, will not be tied as directly to hours billed as they were in the past. “Productivity will be considered [in awarding bonuses], but it will be considered along with other factors, such as efficiency and overall contribution to the firm,” Handley says. “The goal [of the new program] is not a reduction in associate compensation.”

The Orrick move is motivated in part by the same sorts of client pressures that prompted Howrey and Drinker Biddle to alter the way they train, compensate and bill associates, at least in the near term. (Here’s a post on Howrey and one on Drinker.)

Companies, in short, increasingly are fed up with associates. The young ‘ens just don’t provide enough bang for the buck, according to some in-house counsel, who grouse that they have been forced to bear too much of costs of training associates. The main culprits, of course, are law firms, which traditionally have viewed young associates as a profit center and have billed them out at more than they are worth. Firms, in short, now seem resigned to make less off the back of associates.