Washington DC firm Dickstein Shapiro Morin & Oshinsky is scrapping its lockstep for associates and replacing it with a unique three-tier pay system.
Associates will gain two years' experience and then move to a special tier consisting of a group of associates with different post-qualification experience (PQE) levels.
If associates gain standing in the firm and show an eagerness to handle more complex work, they will move up one tier and earn more money. If they do not show the necessary ability, they will stay in the first tier, earning about $150,000 (£94,000).
Peter Kadzik, chair of the recruitment committee, said: "We needed to get off the lockstep system. Some associates are content to just do work such as discovery for litigation, and some will move forward slowly."
He said the idea was based on the US college system where students can repeat a year of school until they progress. He added that the new system will help the firm keep its charge-out rate down after the recent hikes in associate pay in the US, which has seen many firms pay starting salaries of $120,000 (£78,000).
Associates who make it to the second tier will earn a base salary of $160,000 (£100,000), which can go up to $235,000 (£147,000) if they record 2,400 hours.
In the third tier, associates start on a base salary of $180,000 (£113,000). With bonuses they can earn up to $260,000 (£162,000).
The new pay structure at the 100-partner, 270-fee earner firm will be in place by January 2001. It has no plans to make similar changes to its equity structure.
US legal consulting firm Hildebrandt International advised Dicksteins on the system's launch.
Meanwhile, Los Angeles-based media firm Greenberg Glusker Fields Claman & Machtinger has implemented a holiday bonus scheme called 'Q-Time', which stands for 'quality time'.
The new scheme allows associates to earn one week's holiday for every 50 hours they bill over an annual total of 1,950 hours, up to a ceiling of 2,400. In theory, associates could get a maximum of nine weeks extra holiday.
The firm is reported to have opted for the holiday scheme after it decided its staff put more value on their free time.