| Associate Compensation: Weighing Current Market Trends & Alternatives |
As noted in previous issues, 80 million baby boomers are on the verge of retiring, and only 40 million members of Generation X are around to take their place. This will almost certainly create a seller's market for associates, as the demand for talent will outpace supply.
At the same time, many large firms are starting to give smaller raises to associates, and some have even instituted pay freezes. This is the inevitable backlash from the recent skyrocketing of associate salaries at major law firms.
These opposing forces are about to meet in a head-on collision. Is your firm prepared to deal with the coming storm? Do you have a plan in place for compensating talented associates without breaking the bank?
Paying straight salaries was always the traditional method for compensating associates. However, more than ever, firms are exploring and implementing alternative compensation schemes, including junior partnerships, production bonuses, and payment based on a percentage of fees generated and/or collected.
The competition to attract and retain top associates is fiercer than ever. You cannot afford to wait to adopt a plan while your competitors are outpacing you. In the coming years, talent will be in greater demand, and harder to find. CCM is here to help.
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| Growth in Associate Compensation Outpaces other Sectors |
NALP, and association for legal professionals, conducts an annual survey of law firm starting salaries. According to the statistics from the last twelve years, the salaries of new attorneys have grown far faster than the average growth in other professions, with salaries at the largest firms nearly doubling in that time. (NALP - no subscription or registration required)
How Much do Law Firm pay New Associates?
A 12-Year Retrospective as Reported by Firms
Read the article. |
| The Missouri Bar Explores Billing Alternatives |
The Missouri Bar set up a commission to specifically explore issues surrounding alternative billing methods. Among the alternatives discussed in the commission's final report are fixed or flat fees, contingent fees, blended hourly rates, and unit fees, as well as combinations of different alternatives. The report makes for very interesting reading. (The Missouri Bar Association - no subscription or registration required)
Report of the Missouri Bar Alternative Billing Methods Committee
Read the article. |
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The Factory Mentality |
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When law firms focus solely on the almighty "billable hour", the result is often dissatisfied attorneys and clients. Attorneys are trapped by the need to churn out billable hours, shifting the focus from the value of the service to the process itself. The author of this article advocates a shift to alternative billing methods, which he claims will be both beneficial and attractive to clients, who are primarily concerned with receiving value for a reasonable fee. (The American Bar Association - ABA Section of Business Law - no subscription or registration required)
Thinking Outside the Box
Read the article. |
