Over at Steptoe and Johnson, the lawyers don't go around calling each other "partner" anymore. That's because they aren't partners anymore. As of the first of this month, the giant 170-lawyer Washington firm became a corporation.

"It's kind of regrettable," said James P. Holden, the new vice chairman of the new board of the new Steptoe and Johnson, Chartered. "All of us were quite comfortable with the term 'partner,' but we're careful now not to use it."

On Monday, it will be Hogan and Hartson's turn to change monickers. Its new letterhead is going to read: "Hogan and Hartson, a partnership including professional corporations."

A partnership including professional corporations? Steptoe and Johnson, Chartered? Can it be that the old-line Washington law firms, those bastions of civility, gentility and inertia, are really going commercial on us, after all these years?

Yes.

Holding their noses every step of the way, some of the nation's stodgiest law firms are in a full-throttle rush to incorporate. The paper change of identity either involves dissolving a partnership and re-creating it as a corporation, or retaining the partnership but allowing individual members to set themselves up as one-person corporate entities.

In both cases, the motive is the same: to take advantage of retirement provisions in the tax code that are far more generous for the incorporated than for those who are not.

Actually, the tax advantages have been around for decades, and years ago doctors and dentists--on the advice of their lawyers--started incorporating up a storm.

Even some lawyers have been incorporated for a while, but only in exotic places, like California. "They're so much more audacious out there," explains Sheldon Cohen, the former Internal Revenue Service commissioner, whose local tax firm, Cohen and Uretz, began allowing individual "PCs" (professional corporations) last October.

"I guess we lawyers are sort of like the shoemaker's daughter," says John Hamilton, of Boston's Hale and Dorr, which also has gone the individual PC route. "Always the last to get a new pair of shoes. We did it for everybody else, and now we're finally getting around to doing it for ourselves."

The delay is probably more remarkable than the phenomenon, but it can be explained in a single word: tradition. Or as John S. Nolan of Miller and Chevalier, a Washington tax firm, puts it: "Lawyers are basically fuddy-duddies." They have been operating as partners forever, and they like the high-tone, collegial aura the arrangement suggests.

For years, lawyers tried to avoid the step they're taking now by getting some relief from Congress on the tax shelter disparity.

"There's no decent policy rationale for it, everyone concedes that," says Nolan, who heads the American Bar Association's taxation committee. "The simple problem is that people think lawyers make too much money already."

"As a lobby group, we aren't all that sympathetic, let's face it," adds David F. Lake Jr., of Wilmer, Cutler and Pickering, whose firm is seriously considering the PC option.

Given the generosity of spirit that swept through Capitol Hill last year as lawmakers cut taxes and added shelters, the ABA figured its moment had come. And indeed, the group made significant headway. Under the new tax laws that went into effect Jan. 1, the maximum amount of income a partner can set aside tax free in a private retirement or so-called Keogh plan doubled, from $7,500 to $15,000.

Progress, yes. But a disparity remains, and it will grow. The maximum shelter available to corporate employes is now $41,500, and that ceiling, unlike the Keogh figure that applies to partners, is indexed to rise with inflation.

The irony in the boost from $7,500 to $15,000 in the Keogh ceiling is that it will pretty much take care of the needs of your everyday lawyer from Dubuque or Des Moines, those poor benighted practitioners who are still measuring their annual income in five figures. They don't have any more than a spare $15,000 kicking around per annum to set aside for the golden years.

So it is only the superlawyers, those in the most expensive, most high-powered and, often, most tradition-bound big-city firms that still have an incentive to incorporate.

And now that their long lingering hope for full parity has been dashed, incorporating they are: New York's Cadwallader, Wickersham and Taft, Chicago's Sidley and Austin and San Francisco's Morrison Foster are among the most recent.

"It's been a chicken and egg problem until now," said Lake of Wilmer, Cutler and Pickering. "Everybody's been waiting for someone else to move first. Law firms are very concerned with appearances."

Most of the big Washington firms are expected to take the plunge this year, and as they face a starker, more commercial future, they can at least take solace from the testimony of Holden at Steptoe and Johnson, Chartered. Aside from the much lamented forced retirement of the word "partner," he reports that "the transition has been incredibly smooth."

The firm's old executive committee, which was elected, has simply been transformed into a corporate board, which is also elected. The partners are now shareholders; as before, they divide the firm's profits.

There's a bit more paperwork now; meetings have to be held and recorded and the like, officers elected, and all of this can seem awkward or excessively formal, especially when the whole corporation is just one person. But lawyers, being lawyers, will find a way.

Indeed, there can be other advantages. For example, in the partnership form, lawyers are fully liable for the malpractice of others in their firm. In corporations, they need worry only about themselves.

The inducements go on and on, but not everyone is biting. Over at Covington and Burling, Washington's biggest (220 lawyers), richest and most prestigious law firm, the whole business is being viewed with raised eyebrows.

"We're not going to do anything very fast," assures Daniel M. Gribbon, chairman of the firm's management committee, no slave to innovation he.

"We've always done things as a partnership. The only reason for changing would be tax advantage," and that, he suggests, just might not meet the burden of tampering with tradition.