You can please some of the partners some of the time, but you certainly can’t please all of the partners all of the time. That’s what bigwigs at Shearman & Sterling, a major New York law firm are discovering as they tinker with their pay rates for partners.
According to Reuters, Shearman & Sterling is reducing the pay of senior partners and increasing the pay of junior partners and associates in an effort to reward younger, business-generating attorneys and attract star talent from other firms. Senior partners will now be more reliant on the firm’s bonus structure, which rewards both outstanding partners and successful practice groups within the firm.
Unsurprisingly, this policy has miffed the senior partners. Reuters reports that while some of the senior partners understand that changing business policies are required in a troubled economy, the majority were unhappy that their pay had been cut, as almost anyone at any job might be.
This new pay policy is something of a reversal for Shearman & Sterling, who spent the previous three years cutting the pay of junior partners and increasing the pay of more senior attorneys. This policy obviously upset the mid-level attorneys, and Reuters reports that this was creating a lot of resentment throughout the firm.
This flip-flopping of pay policy is no doubt aggravating to attorneys at Shearman & Sterling, regardless of their status within the firm. Shearman & Sterling is known for their close business relationship with Citigroup, and like most big law firms across the country, is tightening their belts in this less-stellar-legal climate. The firm’s profits have been declining since 2008, and the firm hopes that this new pay system, which is based more on merit than the previous system, will reward attorneys of all levels for their ability to generate business, perform for clients, and utilize teamwork to increase efficiency.
Reuters attempted to contact several of the firms’ senior partners, but they declined to comment. A spokesman for Shearman & Sterling said that the firm’s revenue has increased slightly over the past two years.