Fee earning no longer seen as primary driving force behind US lawyers' pay

A survey of US firms has shown for the first time that hours billed is no longer the key factor in determining what they pay their lawyers.

The survey of 195 US firms, which was conducted by the publishing arm of legal consultants Altman Weil Pensa, reveals that they now believe that the ability of their fee earners to generate new business is more important than the individual fees they clock up.

And although fees billed came second in a list compiled by the consultants of the 14 most important factors that US firms take into account when calculating lawyers' salaries, client care and management skills were also considered to be very important.

The report also showed for the first time that 40 per cent of the 195 practices surveyed took a retrospective approach to profit-sharing, and waited until the end of the year before deciding on the share out. The last time the survey was conducted, in 1993, there was an almost even split between the number of US firms that took a forward-looking, retrospective or combined approach to compensation decisions.

The publisher of the survey, Charles Huxsaw, said that the findings revealed a “maturation and more objective approach to determining compensation for lawyers”.

He said that there has been a move away from the traditional and simplistic approach of grouping lawyers as “finders, minders and grinders”.

“This more complex approach shows a recognition that the lawyer's role has become more involved,” Huxsaw commented. “And firms are taking this into account when deciding what to pay their staff.”

But one New York legal recruiter said US firms attached equal importance to the business generation and billing capabilities of fee earners.

“Lawyers are expected to be able to handle both parts, but billings remains very important,” he said.