Cracks Appearing in Law Firm Associate Model:

Reed Smith, the large Pittsburgh-based law firm, has announced a fundamental restructuring of its policies with regard to associate performance and promotion. According to an article in AmLaw Daily:

The firm has revamped its associate model, doing away with associate classes based strictly on entry date in favor of three associate groups that will have formal training from the time they enter the firm until they are ready to be considered for partnership. . . . The goal of the program is to provide a road map for associates detailing the specific skills required at each of the newly created levels–junior, midlevel, and senior associates. Associates won’t be able to move to the next tier until they have met those requirements. Compensation will be tied to those competencies by 2011 as well.

Reed Smith’s new competency model covers four main areas–legal skills, citizenship, business skills, and clients–with a focus on nine core competencies within those areas. Those competencies include mastering fundamental legal skills, support of the firm’s culture, demonstration of leadership and business skills, and understanding and effectively managing client needs.

Each of the three associate levels will be tied to an “academy.” The firm will continue its “Reed Smith University,” which already offers 140 in-house courses. The new program will expand that training with courses and other opportunities tailored to the nine core competencies.

Or, as the headline in the Philadelphia Business Journal has it: “Reed Smith’s New Personnel Policy Allows it to Ditch Automatic Pay Raises.” Now that’s getting to the heart of the matter!

It’s hard to say whether this is an important departure from the standard model, or just an aberration – time will tell. But it’s a bold move; I wish them well with it, and hope that it is a harbinger of fundamental changes in the relationship between law firm associates and their employers, changes that are surely long overdue. Nobody who spends ten minutes looking at the way law firms are organized (including the way that associates are compensated) would conclude that the model makes a great deal of sense or achieves much in the way of efficiency. Change is undoubtedly coming, spurred on, predictably enough, by economic stress, and to my eye the Reed Smith experiment looks like it makes a good deal of sense. 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.

In addition, to the eyes of a law professor — at least, to the eyes of this law professor — there could be some serious implications (and tremendous opportunities) for law schools here. Plenty of people have been complaining in the last decade or so about the fact that law schools do a poor job of preparing their students for the actual tasks they will be called upon to undertake as practicing lawyers. Much of that criticism is, in my opinion, well-deserved; there are many, many ways in which we could do a better job at helping our students develop the skills they’ll need to practice law. At the same time, teaching anything well is damned hard, and many law schools have lots of people working there who do it damned well. Reed Smith, according to the article and its press release, already offers 140 in-house courses, and will be expanding those offerings in the future as part of the implementation of this new training and promotion policy. Now, I’m sure that there are lots and lots of things that lawyers at Reed Smith can teach better than your average law professor; but I’m also certain that there are lots and lots of things I and my colleagues can teach more effectively than they can. Teaching is damned hard — ask anyone who does it well. If this Reed Smith experiment catches on — if, say, 20% of the large law firms in this country each start to offer hundreds of courses in-house, that’s a whole lot of new courses. If I were running a law school, I’d be looking for ways to collaborate in all of that, because it’s smack in the middle of our “core competencies”; and if I were running a law firm, I’d be really interested in hearing what the law schools have to say, and to think about ways in which the law schools could help them get where they want to get, for the same reason.