Last week, Steptoe chair Gwen Renigar announced a new associate compensation system and it’s a major victory for work/life balance. As Steptoe partner Kate Cappaert said, “The program is focused on recognizing that each associate’s career path may be different. Not everyone fits in the same box, and we’re really trying to meet associates and let them take ownership and control over their career path and develop a program that allows them to do that.”
So, what’s the new system?
In broad terms, the firm will offer three tracks that have different billable hour expectations that coincide with different salary bases. As reported by Law.com, it breaks down as follows:
The first option allows associates to continue on their current compensation scale, with a billable hour reduction to 1,800 hours. The firm declined to specify the details of its current compensation scale, but, according to 2024 NLJ 500 data, Steptoe’s associate compensation scale reportedly starts at $215,000.
The second option offers a billable-hour budget of 2,000 hours, with a compensation scale starting at a $225,000 base salary for first-year associates and going up to $502,500 for eighth-year associates.
The third option comprises a billable-hour budget of 2,200 hours, with compensation starting at a $236,250 base salary for first years and running up to $581,750 for eighth-year associates.
All three billable levels will have the same opportunities for promotions. Associates will be awarded bonuses for meeting their billable targets, extra bonuses for exceeding them, and an option for additional discretionary bonuses.
There will also be an option to have a billable budget below 1,800 hours at a prorated salary.
More of the logistics are detailed here:
Each associate will be given an associate billable hour budget and compensation for 2025 based on “a review of their historical utilization and performance,” according to Renigar’s note. However, associates will be able to select a lower budget than assigned to them if they so chose.
The assigned budget and compensation will apply for 2025, though associates will have the choice to change budgets year-to-year.
The level of flexibility this program provides to associates is potentially revolutionary. And the inherent uncertainties of billable targets like if you’re on the 1800-hour program but get put on a drawn-out trial or if the M&A market takes another dip, can be accounted for in the new bonus system at the firm. Kudos to Steptoe for realizing good lawyers don’t always want to spent every waking moment billing.
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @[email protected].
