Holding Associates Accountable
A law firm's talent-development program for associates -- which ties core competencies to advancement -- is attracting some attention. Even some observers who believe economics is playing a bigger role than admitted to by the firm say the program may offer a good model for other firms to copy.
By Kristen B. Frasch
Many eyes seem to be on a Pittsburgh law firm's rather bold move to hold associates more accountable in terms of skills and competencies before they move up the ladder toward making partner.
In announcing its new talent-development program called CareeRS late last month, the firm -- Reed Smith -- referred to it as "a new competency-based program focused on developing the talent of its personnel," and said it was being rolled out to associates across its offices worldwide, effective immediately.
A second phase, yet to be rolled out, will be geared toward support staff. Reed Smith employs about 1,700 lawyers in more than 20 offices in the United States, Europe, the Middle East and the Asia/Pacific region.
"Essentially, the competency model provides a 'roadmap' detailing the specific skills required at each level," the firm's announcement states. "Under the new program, associates are no longer classified by year, but by competency level -- junior, mid-level or senior."
Just as low-performing associates will find it harder to move up the ranks as a result of this change, the model will also make it possible for high-performing associates to make partner sooner, according to the firm.
"Clients demand and deserve the best-quality legal talent, firms require highly skilled lawyers to compete successfully in today's global markets and associates expect meaningful opportunities to expand their knowledge and develop their skills," Gregory B. Jordan, managing partner at the firm, said in making the announcement.
"The most painful conversation you can have with a client is to tell him that, all of a sudden, you're charging more for an associate just because the associate has aged a year," Jordan said in a separate interview with the Wall Street Journal. "Something needed to change. The recession made that clear."
That said, the firm maintains that the program, which was nearly two years in the planning, is not being implemented in response to the economic downturn.
Some observers, however, believe that compensation may play a bigger part in the program than the firm says.
Jeff Blumenthal of the Philadelphia Business Journal writes that "the law firm's new CareeRS program ... will allow the firm to ditch traditional lockstep advancement and annual pay raises for associates."
Ditching such raises, writes Temple University law professor David Post on
The Volokh Conspiracy
blog may be "getting to the heart of the matter!" but, he hopes the program "is a harbinger of fundamental changes in the relationship between law-firm associates and their employers, changes that are surely long overdue.
"Change is undoubtedly coming," he writes, "spurred on, predictably enough, by economic stress and, to my eye, the Reed Smith experiment looks like it makes a good deal of sense."
Nicky Dingemans, Reed Smith's global chief people officer, says the competency model covers four core areas -- legal skills, citizenship, business skills and clients, with a focus on nine core competencies.
Among other things, she says, those competencies address the mastery of fundamental legal skills, support of the firm's culture, demonstration of leadership and business skills, and understanding and effectively managing client needs.
"We believe CareeRS holds the key to reduced associate attrition and higher client satisfaction," Dingemans says. "We see Reed Smith in the forefront of talent development, expanding the opportunities for our associates to grow as lawyers and to become well-rounded leaders, managers and citizens through cutting-edge programs like [this one]."
But whether this approach -- essentially holding associates more accountable for their performance -- will actually improve their performance and, indeed, expand their opportunities, "remains to be seen," says John J. Myers, a labor and employment attorney with Eckert Seamans Cherin & Mellott in Pittsburgh.
"Associate development is critical to the life of a law firm and it appears that this program has the attention of Reed Smith's senior management, which is a good thing," says Myers.
"Terms like 'core competencies' make the hearts of human resource professionals go pitter patter, but unless this program actually accelerates the opportunities for associates to take on increased responsibilities apart from legal research and third-chairing the defense of depositions, it is not going to breed a new generation of skilled lawyers."
Indeed, says Garry Mathiason, a senior partner in the San Francisco office of Littler Mendelson, a critical component of the program's success will be the firm's "commitment to actually teach core competences and measure performance."
Also, he says, "efficiency and innovation will need to be rewarded. Information can [and should] be organized into a knowledge-management system that supports attorney development and facilitates expertise."
Another key to "the success of the Reed Smith program and the many more [that will soon be] following the same path, will be how it is perceived by those covered," says Mathiason. "It cannot become a cover for pay reductions, longer hours and a competency-based exit strategy -- although, as a byproduct of the program, many of these events may happen.
"Some more objective merit-based standards need to be established and, more importantly, followed," he says.
Post notes that "compensation is, after all, supposed to bear some relationship -- a close relationship in a competitive market -- to the actual skills that individuals possess and the manner in which they can deliver value to firm clients; tying that compensation rigidly to associate seniority makes about as much sense for law-firm associates as it does for elementary school teachers -- i.e., none at all."
Mathiason says that "one of the reasons the system of lockstep promotion and compensation has become so engrained is the lack of other evaluation standards. My guess is that, eventually, this program will succeed best with a combination of merit-based metrics and some traditional elements measuring economic contributions and dedication."
According to an article by The Legal Intelligencer that was posted on Am Law Daily, Reed Smith joins "only a handful of other Am Law 100 firms in instituting such a talent-development program that elevates attorneys through three different tiers based on a set of core competencies rather than by class year."
Associates, according to the new competency model, won't be able to move to the next tier until they have met the requirements of the one they're in, and compensation will be tied to the new competencies by 2011.
But in Eckert Seamans attorney Myers' estimation, applying pay-for-performance to law-firms, especially in a recession, is harder than you think.
"In tough economic times," he says, "it can be a real challenge to ensure associate growth, because some partners are reluctant to give associates free access to key client contacts [and] to hand them the reins at trial or take the lead in client meetings."
Nevertheless, "the concept of basing compensation and billing rates on an attorney's stage of development, rather than on the attorney's seniority in the profession, is a sensible and fair concept," he says, "and one I believe many firms have either already implemented or are considering."
"Of course," he adds, "since most top law students who are exposed to similar opportunities will tend to improve professionally with experience, one still finds that the most valuable associates are usually the ones with the most seniority."
Mathiason says that partners stand to benefit from such programs as well.
Establishing competencies for associates, "also sets a standard of performance for partners," he says. "In a perfect world, a talent-based program would start at the top and, by example, reshape the culture of the entire law firm."
For Reed Smith to respond to the harsh realities affecting the legal occupation -- with salary cuts for incoming associates and significant layoffs -- by instituting such a program makes sense, he says, adding that "sometimes, the best innovation comes from a time of crisis."
November 25, 2009 Copyright 2009© LRP Publications
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