I’ve said it before,
but it appears to be a source of chronic pain, so I will re-state my
firm belief that, like pregnancy, you cannot be "half" lockstep
and half not.  The logical universe of choices is:

  • Pure Lockstep:  Fabulous if you can pull it off, but it’s
    the increasingly rare firm with the history, the culture, and the
    relative freedom from exogenous shocks (e.g., lateral defections)
    that can stay so true.
  • Eat What You Kill:  Generally dismal places to work, but unquestionably
    an example of capitalism at its most raw.  In my experience,
    such firms can be unstable for the long run, and major dislocations
    like the retirement of a big rainmaker can bring down the house.
  • Modified Lockstep:  Not an oxymoron, but rather the practice
    of starting out with the presumption that compensation is lockstep,
    then modifying it in individual cases to reward/punish over/underachievers.  Permits
    the greatest flexiblity, as well as the chance to provide incentives
    for non-billable, firm-building efforts (serious pro bono efforts,
    associate development, bar leadership, etc.)

Clifford Chance has famously not achieved equilibrium on this issue,
and the ongoing failure to bite the bullet continues to threaten their
foray into the U.S. in general and New York in particular.  The
most recent famous defector, Jim Benedict (to Milbank), summed it up
with pith:

“I looked at the vote last fall [veto’ing "superpoints" for
some New York partners] as saying that the purity of lockstep was more
important than success in the U.S.”

As any veteran of corporate-land
mergers could have predicted, merging compensation systems at the
most senior level simply cannot be avoided, elided, postponed, or
finessed. And as any veteran of launching forays into New York could
have predicted, superstars will demand their rewards.

Related Articles


Sign-up for email

Be the first to learn of Adam Smith, Esq. invitation-only events, surveys, and reports.