With revenues down and collection times up, the number of law firms that are starting to consider the benefits of a two-tiered approach to associate attorneys is growing rapidly. Firms are finding that a two-tiered associate structure can be an efficient profit model in that the second tier of “nonpartnership track associates” are paid sometimes as much as 50 percent less than the first tier of “traditional associates,” but may be billed to clients with rates that are only 25 to 30 percent less than those of the traditional associates. In other words, if a nonpartnership track associate bills 1,800 hours, the firm makes a larger profit and the clients pay less money than if a traditional associate were to bill the same number of hours.
The concept of separate tiers of partners has been around for awhile, and over the past decade, most of the nation’s largest firms have already converted to a multi-tier partnership structure. However, the application of a multi-tier approach to associates is a recent development that is quickly gaining favor among many of the nation’s larger law firms and some smaller regional firms. When implemented correctly, a second tier of nonpartnership track associates can benefit the firm, its clients and the attorneys.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
