New Characters for Existing Players
My current approach--developed over time through established/official guidelines, experimentation, feedback and also seeing articles discussing the subject--is to require that existing players who want new characters whether as voluntary replacements or because of character death to:
- Generate a valid character using approved approaches (incl. standard wealth) whose ECL is, at most, one level less than the party average (or sometimes, one less than the level of the lowest existing character in the party).
- Not make use of the items of the retiring or deceased character (if retiring, that one keeps all that has been earned; if dead, there are donations, and the spreading of the wealth among boon companions) [Of course, by choosing items during build, the new character might be able to trade for a former character's item from the new owner in the party. But basically, a character that stays dead becomes a type of NPC that the DM exercises control over (respecting meta-gaming and inter-player lobbying and discourse)--including disposition of items--unlike a living/active character belonging to a player. And, of course, if the new character could afford the deceased character's items, then they could be willed to them and would be counted as starting wealth at that level.]
- Join the group with an awesome back-story, a fair/legal wealth total, no artifacts, and no epic items (everything else goes according to the value of existing or constructed magic items)
The intention is to welcome abrupt changes within the same campaign (trying different builds), but also to moderate that impulse by setting any such new characters just a little bit behind the others. [But, as we know, some XP award mechanics provide a differential bonus for lower level characters to speed their leveling to correspond to the others.]
The appeal, of course, includes the opportunity to build a "full" character concept at higher-than-first-level with choice of (prestige) classes, skills, feats, (learned) spells, optimizing magic items for a particular archetype (gauntlets of ogre power for melee types, etc.).
New players, in contrast to the above-mentioned level restrictions, are encouraged by being able to custom build (or import valid) characters at the party average ECL or perhaps one more--but if more, then not equal to or greater than the highest existing character level.
BTW, the emphasis on wealth and items (which contribute to "power" and effectiveness--including the very real possibility of outshining the others by raw factors aside from chance and skill) is a big deal to my long-time friends/players--much more than I tend to think about or realize, heh. Yeah, we are all very competitive and that factors into these "cooperative" campaigns.
Penalties for Death (Raise Dead, Resurrection) and Permanent Level Drain
On the subject of character death--including trying to avoid it, and also perhaps managing the perception of the climb back (and its mechanics):
I have been using Sean K. Reynolds' variant called "
Slower Dying" to provide more of a chance for the players to moderate the vicissitudes of high-level combat--he explains the rationale in that article.
Also, a quick local scan and Web search did not reveal a source, but I do follow the "death and permanent level drain as continuous level drain penalties until sufficient XP is acquired" approach. As I recall, one compelling rationale is that you don't need to have access to the changes-per-level to reverse them, you just keep the character configuration and apply a new, lasting detrimental effect (including loss of a highest spell, and so on).
This is pertinent in that some players are more willing to continue to play the same character even when drained or revived if they are effectively the same level but need to compensate for a grievous event that makes them weaker until fully recovered (e.g. gain sufficient XP to level again).
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Update: Re-read the OP and, regarding balancing encounters, I actually delved even further into the 3.5 encounter level rules and charts, and have a better handle on the numbers. Nowadays, I can fully expect sparsely populated virtual seats around the table because people are doing other things. One quick response was to state that I run their characters (fairly) as NPC's [not a big chore because of a VTT]. But otherwise, I was always adjusting the EL's up or down depending upon the 2-5+ expected members for a session. The "game must go on" after all!
I would have additional mid-to-lower creatures to bump the EL, or remove some as needed. If it was a solo creature, I had variants according to advancement guidelines. Ahem, I also openly admitted to "buffing" the monsters by giving them HD and commensurate abilities just under the point at which the CR officially bumped, heh.
Sometimes monsters have intel, tactical advantage, operative magic effects and so on to give them an advantage. In contrast, they might be somehow inconvenienced if the effective party level is not a simple '4 characters at level X' calculation.
Also, because I have some favorite (prepared) modules used more than once by the same or different gaming group, I've just resigned myself to having some workable approach for an expected need to adjust EL's on-the-fly, always. Having such in place also facilitates more adlib in-session adjustments according to fluid DM and player co-created narrative.
Ultimately, my engagement with system mechanics is an attempt to be "fair" according the rules-balancing by many great and creative minds doing solo and collaborative work, so that the play experience by competitive and simulation-happy gamers (who nevertheless also have imaginations) will straddle that difficult-to-achieve line of challenge and fulfillment (risk and reward) without becoming annoyingly difficult or else boringly easy. [CRPG's can distill and compress the time required to discover when the game is "won" or "lost" and further interaction therefore becomes uninteresting. My endeavors in RPG'ing seek to--with human interaction--avoid the conditions which lead to such dissatisfaction.]
