Pillsbury Winthrop Shaw Pittman has temporarily reduced pay for some associates and counsel based on productivity levels, in the latest sign that big firms are questioning their traditional compensation models, writes The Recorder.

The firm would not confirm how many of its 200 associates have been affected, or by how much their pay was reduced. Some reports have suggested pay has been cut by 10%-20%; however, the firm said these figures were "not entirely correct".

Pillsbury will continue to offer bonuses and may pay lawyers more if productivity returns throughout the year. The firm has yet to make a decision on compensation for 2010.

Jeffrey Grill, the chairman of Pillsbury's attorney development committee, said in a statement: "We believe that this flexible approach is appropriate for our firm, especially for those lawyers in our busier practice areas."

While Pillsbury's changes are limited to 2009, other firms – such as Howrey and Orrick Herrington & Sutcliffe – have fully embraced the idea of moving away from a lockstep pay scale to one based more on merit.

Howrey was one of the first leading US firms to move to a merit-based system, with the plans announced in 2007 and implemented at the beginning of this year.

Orrick is planning to move to a new compensation system based on overall competency and workload rather than hours worked. The plan will include multiple tiers of lawyers and is slated to take effect in early 2010. Details are still being hammered out, but firm chairman Ralph Baxter said revamped associate salaries will be the first step in the reinvention of the law firm.

The lockstep associate pay and bonus structure found at most big firms has been criticised for creating an incentive to overbill and for its focus on quantity over quality. Firms that are implementing merit-based pay said they are doing it to encourage more efficiency so they can charge clients lower rates. Sonnenschein Nath & Rosenthal has also said that it plans to move to merit-based pay next year.