LA Reduction Process
yipwyg said:
Race has 0 Hd and has a level Adjustment
At 3 class levels you can buy off the LA by paying ECL-1*1000 xp.
3rd class level is ECL 4 for race 4-1 = 3 so he loses 3,000 xp. This means he loses all xp and drops back to 1st level.
Almost right. The option can be found fully explained on page 18-19 of Unearthed Arcana.
For a race that has no racial HD and a LA of +1, he can buy off the LA when he reaches 3 class levels (ECL 4). This happens at 6000 xp for that character. (Note that this is the same xp total as a "regular" 4th level character.) Upon reaching 3rd level (ECL 4), the character can buy off the LA, reducing his xp total by the 3000 that yipwyg mentioned. This makes him a 3rd level character with 3000 xp.
One thing to note is that any racial hit dice are not counted in the level required. The example from UA is that a gnoll (with a LA of +1 and 2 racial hit dice) has to wait until his third class level. That would mean that upon reaching 3rd level (ECL = 3+2(racial HD)+1(LA) = 6), it would lose (6-1)*1000 = 5000 xp and the LA, becoming an ECL 5 (3 class + 2 racial) character.
Basically, you lose the xp for the level you would have just gained and, instead of advancing, your LA goes down. You can't start buying off LA until you reach a class level of 3*your LA, and you can only buy off the LA at the specific levels shown. (For example, the LA +1 set can only buy off their LA after/at their class level of 3. The +2 set (Drow, for instance) can only buy off their LA at levels 6 and 9.
Hope that clarifies.
As to the desirability of doing this or whether it is unbalancing, I don't have any experience with it. It looks okay, particularly because LA seems costly for the "powers" most races give, especially to caster classes.