When Cleary fired a group of partners earlier this year while they prepared to bolt for Freshfields, folks started wondering if the era of lockstep partner compensation may have finally come to an end. The true traditionalists out there — including Cleary, Debevoise, and Cravath — continue to adhere to a partner pay model that hands out firm profits based on seniority rather than an individualized assessment of the partner’s value to the firm. It’s a window back to a more collegial time in the profession’s history.
Law.com reports that Debevoise just completed a comprehensive review of its comp before deciding — despite the slings and arrows of modern law firm competition — to stay the course. Moreover, the firm’s partnership agreed unanimously not to make any changes.
[Presiding partner Michael] Blair said he believes lockstep is the best system to attract and retain the best talent. “We think it’s a competitive advantage, and our clients tell us it’s a competitive advantage,” he said. “Our lockstep system frees us from any misaligned financial incentives that could get in the way of delivering to clients the best teams for the project.”
That competitive advantage manifests itself in allowing the firm to offer one-stop shopping to clients, willing to provide services that generate less revenue to address the needs of clients bringing in big money for other practice groups. It allows the firm to avoid a Balkanization of the workforce with associates held in inefficient fiefdoms unable to flow to their best use because of rainmaker demands. And Debevoise has turned those advantages into record profits.
A Law.com source said Cleary had explored a comp change as well, but the firm was more tight-lipped about it that Debevoise — likely because such a review could be cast as reactive given the high-profile firings this year. But it’s more than likely that Cleary sticks with its peer group and holds the line on compensation, if only because bailing now would make the whole Freshfields affair for naught. The extreme move of firing a group of departing partners was a principled stance in defense of a way of life — or at least a way of practice — that’s taking hits across the profession. Don’t give in now.
Lockstep may not be a viable option for everyone, but for the sliver of firms with the wherewithal to make it work, there’s no need to join the nouveau riche.
Debevoise Sticks With Lockstep Partner Pay After Compensation Review [Law.com]
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
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