As law firms dangle bigger paychecks to recruit associates, Crowell & Moring is adding a twist—a two-tier compensation system based on how many hours the new hires bill.
The system pays between $205,000 and $365,000 based on 2,000 billable hours, according to an internal memo viewed by Bloomberg Law. For lawyers who bill 1,900 hours, perhaps because they want to pursue pro bono work or other interests, or spend more time with family, the range is between $185,000 and $340,000.
“We created this to give room for flexibility,” Phil Inglima, Crowell & Moring’s chair, said in an interview. “We tried to incorporate as much choice as possible.”
Crowell’s approach expands an industry-wide focus on associate paychecks that has grown out of the whopping success major law firms have chalked up since the coronavirus pandemic hit, particularly in transactional practices.
Firms kicked off the pay race in early June when Milbank announced a new set of associate salaries that bumped up the starting pay to $200,000 from $190,000. Davis Polk & Wardwell quickly matched, and several other competitors followed.
The new Big Law scale stretches from $205,000 for first-year attorneys to $365,000 for senior associates.
These were the first raises since 2018, although last year some firms—with David Polk setting the pace—handed out special bonuses to reward additional associate work to meet new demands from the coronavirus pandemic.
Crowell didn’t immediately enter the race to boost salaries, although it “was certainly influenced by what was going on in the market,” Inglima said.
The firm held focus groups with associates and counsel, and discussions with partners, to gather their views, he said. The process was influenced “by so many people who worked very hard in the pandemic to meet their hours,” Inglima said.
The firm had more than $514 million in gross revenue last year, ranking it No. 77 among the Am Law 100.
Crowell’s new compensation plan is effective on Sept. 1, and the alternative tracks apply to full-time associates and counsel based in the firm’s Washington, New York and California offices.
Incoming first-year associates, who start on Oct. 18, begin with a base salary of $205,000 and a billable target of 2,000 hours. After the end of their first year—in January 2023—the 2021 associates will move to the second-year compensation level of $215,000 with a 2,000-hour billable target.
After their second year, those associates will be placed in a tier based on their billable history, according to the firm memo.
At Crowell, associates are considered for counsel after five or six years, then later for promotion to partner.