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Vol. 70, No. 9, September
1997
News Briefs
Survey compares law firm
compensation systems
U.S. law firms' attempts to reform their compensation systems to better
satisfy both owners and associates has created a trend toward basing individuals'
pay on the amount of business they generate.
| Legal consultant explores salary and bonus policies. |
Business origination and personal fees collected ranked as the two most
important factors in determining compensation among 195 law firms responding
to a national survey conducted by Altman Weil Pensa Inc., a legal management
consulting firm in Newtown Square, Penn. A report on the 1996 survey, Compensation
Systems in Private Law Firms, breaks down the survey responses by firm
size and form of organization.
The report compared the survey to a similar 1993 survey and discovered
a trend toward compensation reform at many law firms. Forty percent of the
firms surveyed, compared with 33 percent in 1993, now use a "retrospective"
compensation system, basing pay on the past year's performance.
Compensation factors
The trend toward more objectivity in compensation decisions reduces the
importance of pro bono and other nonbillable work in making compensation
decisions at many law firms, according to the report. Firms rank community
service, years of practice and professional involvement lowest among 14
factors considered in determining compensation.
The 14 factors formally considered by firms using an objective system
to determine a lawyer's compensation are, ranked by order of importance:
business origination, fees collected, case responsibility, client responsibility,
fees billed, hours recorded, legal expertise, firm management, relative
ownership percentage, seniority with firm, cooperativeness, community involvement,
seniority since bar admission and professional involvement.
Of the firms reporting in the survey, 30 percent use a lock-step salary
schedule. An associate's pay level is determined by classification within
these firms. At half of these firms, the lock-step salary schedule is permanent.
At the other half, pay levels follow a set schedule only during the first
four years of employment, on average.
The survey also found:
- 71 percent of firms with 20 to 99 lawyers have written compensation
policies, compared to 57 percent of firms with two to 19 lawyers and 50
percent of firms with 100 or more lawyers;
- 46 percent of all firms use compensation committees to make or advise
on compensation decisions.
Signing bonuses
Twenty-six percent of all responding firms pay associates signing bonuses.
Of those firms, recent graduates are eligible to earn bonuses at 90 percent,
lateral hires with less than three  years' experience are eligible at 35 percent
and lateral hires with more than three years' experience are eligible at
35 percent.
At 71 percent of the firms paying signing bonuses, the bonuses are paid
in flat amounts with firms of two to 19 lawyers paying an average of $2,000,
20 to 49 paying $2,750 and 50 to 99 paying $3,000 (no firms of 100 or more
lawyers reported bonus amounts).
Current associates can earn performance bonuses at 85 percent of all
responding firms. One percent of the firms in that total pay bonuses in
flat dollar amounts. At 75 percent, bonus amounts are determined on a discretionary
basis. At 24 percent, bonus amounts are determined using a formula.
Of the firms using a formula to determine bonuses:
- 62 percent consider fees produced;
- 43 percent consider hours recorded; and
- 30 percent consider clients originated.
Survey reports are available for $225 from Altman Weil Pensa Publications
Inc., P.O. Box 625, Two Campus Boulevard, Suite 200, Newtown Square, PA
19073.
New hire requirement aimed at deadbeat parents
A provision of last year's federal welfare reform bill requires all Wisconsin
employers to report new hires to the state's Department of Workforce Development
(DWD) within 20 days of an employee's start date beginning Jan. 1, 1998.
| Employers to report new employees Jan. 1 |
The new hire requirements aim to strengthen states' child support enforcement
systems. The chief obstacle in implementing wage withholding for child support
is locating absent parents' places of employment, particularly those who
change jobs frequently.
The information gathered by each state will be incorporated into a national
directory and used to locate noncustodial parents who have left the state
in which they owe child support. Employers with employees in more than one
state need only report to one state.
Employers must report a new employee's name, address, date of birth and
Social Security number, and their own name, address and federal identification
number. The information may be submitted on paper or electronically. No
special form is required. However, the Wisconsin Department of Revenue (DOR)
modified Form WT-4, the Employee Exemption Withholding Certificate, to include
the additional new hire information. The form will be enclosed in the packet
the DOR mails to all employers in December.
Though the New Hire requirement brings more paperwork for employers,
the State Bar's Family Law Section views it as relatively innocuous compared
to other reporting rules previously imposed by the state. The requirements
also could be viewed as good public policy, according to Milwaukee attorney
Christopher Walther, section vice chair.
"A lot of deadbeat parents constantly skip from job to job,"
Walther said. "It's expensive and cumbersome to track them down to
issue a new income assignment with each new job."
Wisconsin's child support collection rate of 38 percent compares favorably
to the national average of 18 percent. But that still means that money remains
uncollected in 62 percent of Wisconsin's child support cases.
The DWD will operate the program jointly with the Division of Unemployment
Insurance and the Bureau of Child Support in the Division of Economic Support.
The DWD offers to explain the new hire requirements at informational meetings
for employer groups statewide. To learn more call Karen Gerrits, program
coordinator, at (608) 267-9015.
FYI
Favorite computer products named
Law Office Computing magazine recently asked its readers to vote
for their favorite legal computer products. The top choices by category,
with winners listed first and in boldface followed by other finalists, included:
Word Processing
- WordPerfect
- Microsoft Word
Software Suite
- Microsoft Office
- Corel WordPerfect Suite
- Lotus SmartSuite
Time and Billing
- Timeslips
- TABS III
- PC Law, Jr.
Personal Information Manager
- Lotus Organizer
- Time Matters
- ECCO Pro
Online Research
Litigation Support
- Summation
- Gravity Verdict
Case Management
- Abacus
- Amicus
- Casemaster III;
Document Management
- Groupwise
- DOCS Open
- Soft Solutions
Legal Add-On
- Visioneer Paperport Deluxe Software
- HotDocs
- OmniPage Pro.
State Bar members can subscribe to Law Office Computing for $44.99,
a $25 discount on the regular subscription price. Call (800) 394-2626 and
have your State Bar member number handy. The discount is given to new subscribers
for one year only.
Federal appeals court accepts CD-ROM brief
A brief filed by Virginia attorney Charles Gholz July 25 with the U.S.
Court of Appeals for the Federal Circuit in Washington, D.C., was the first
recorded on CD-ROM accepted by the court.
The court, which only recently invited brief submissions on this relatively
new technology, directed Gholz to provide the court commissioner with the
software necessary to view the hypertext brief.
Lawyers can record on one CD-ROM a brief with hypertext links, such as
those found on the Internet. Just as in browsing a home page, with only
a mouse click, a judge can easily jump to additional text of supporting
cases, multimedia depositions or other key exhibits all within one small
package.
The U.S. Court of Appeals Seventh Circuit, which serves Wisconsin, Illinois
and Indiana, requires briefs on both disk and paper. The Seventh Circuit
currently lacks the technology to accept briefs on CD-ROM, said Clerk Thomas
Strubbe.
AIDS Network seeks lawyers
for Legal Services Program
The AIDS Network needs lawyers statewide to provide legal services pro
bono or at reduced rates for Wisconsin residents living with HIV or AIDS.
Most cases handled by the network's Legal Services Program fall within
one of these areas: wills, trusts and estate planning; family law; insurance;
bankruptcy; credit collection; government benefits; powers of attorney;
HIV confidentiality law; and employment and housing discrimination.
For more information contact the AIDS Network, Legal Services Program,
600 Williamson St., Madison, 53703. Call (608) 252-6540 in Madison or (800)
486-6276 statewide.
Internet sites list lawyer job openings
Attorneys @ Work, a subscription-based
Internet site connects law students and lawyers looking for work with law
firms and law departments at major corporations. Students pay nothing to
enter their name at the site that is now used by the law schools at Harvard,
Stanford and Georgetown universities. Attorneys pay a fee, currently $50,
to place their name in the database. Law firms pay an annual subscription
for unlimited access.
Find the legal job listings from Wisconsin Lawyer and the Marquette
University Law School Alumni Employment Opportunities page on WisBar.
Figuratively
Speaking
"Road Rage"
Since 1990, the percentage increase in the rate of "aggressive driving"
incidents in which one driver attempts to kill or injure another driver
following a traffic dispute, according to the American Automobile Association:
51
Percentage who used firearms against other drivers: 37
Percentage who used another form of weapon: 28
Percentage who used their automobile as a weapon: 35
Since 1990, the number of people killed in traffic: 250,000
Number of fatalities that were directly related to aggressive driving:
218
Number of injuries per year attributable to aggressive driving: 12,610
Source: US News & World Report, Vol. 122, Number 21, June
2, 1997; A.A.A. | 