Crowell splits associates into two tracks, pegging salary to hours

REUTERS/Andrew Kelly

(Reuters) - Crowell & Moring is the latest law firm to boost associate pay, but with a twist: The firm will sort associates in its major markets into two salary tracks, both higher than their current salary scale, based on billable hour targets.

Base compensation for incoming associates and counsel who bill at least 2,000 hours will be $205,000-$365,000, depending on class year, a scale that mirrors upper-end pay increases at other Big Law firms in recent weeks. A 1,900 billable hour track will have a base salary scale of $185,000-$340,000, according to a memo reviewed by Reuters.

All incoming first-year associates will start in October on the 2,000 billable hour track and move up to $215,000 as second-years. At the end of their second year, "adjustments may be made based on your billable hours history," the memo said.

"Our goal is to set reasonable targets for our lawyers and to position them well for bonus eligibility," Philip Inglima, chair of the Washington, D.C.-based firm, said Friday. "If an associate does not meet their hours target after a particular year, we will review and consider adjusting their target to a more attainable one."

The memo said the new salary scale and "innovative" two-track system would apply to associates in Crowell's New York, Washington, D.C., and California offices.

Inglima described the new model as an "increase in choice." He said Crowell was already looking at its compensation system for associates and counsel, and then when other firms began boosting pay in the spring, the firm started to talk about how to respond to the market changes.

"It's allowing people to feel like they've got a hand in crafting where they're going and how they're getting there. And yet, they all can end up at the same goals, the same career aspirations with these different options," he said.

Inglima said an associate's track alone will have "zero negative impact" on the ability to make partner, noting that the firm has had partners elected in the past after doing "balanced hours." The firm has already had an option to have balanced hours upon approval, he said.

Lawyers in the 2,000 billable hour track can claim up to 100 hours of billable hour equivalent credit for pro bono work, diversity, equity and inclusion hours, and certain lawyer development activities, he said. Those in the 1,900-hour track can apply a mix of pro bono hours, up to 50 diversity, equity and inclusion hours and the investment development hours, Inglima said, noting that the option has a "somewhat larger range of flexibility" in how they balance client hours and billable equivalent hours.

Asked how he expects the tracks to be apportioned among practice groups, Inglima said some partners in internal discussions were "very supportive" of the structure, noting some regulatory and advisory work can generate fewer hours than certain litigation or deal practices.

There may be "less of an easy task towards 2,000 hours" in some practices, he said.

Aside from rethinking associate compensation systems, law firm leadership teams have been busy in recent months weighing return-to-office policies and how — and where — they expect lawyers and staff to work going forward.

Crowell's memo said first-year associates are expected to start in-person on their first day, and orientation will be in a hybrid format. The firm also "actively encourages" lawyers and staff to get vaccinated, and beginning July 12, those who want to enter the firm's offices have to either be vaccinated or receive a negative COVID-19 test in the past 72 hours, the firm said.

Read more:

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Sara Merken reports on privacy and data security, as well as the business of law, including legal innovation and key players in the legal services industry. Reach her at sara.merken@thomsonreuters.com