12:12 pm ET
Jun 12, 2009

Lawyers & Law Firms

The Mighty Are Humbled: Cravath Also Offers Associate Deferrals

    • I'm glad I'm clerking, but corporate lawyers are a transaction cost and for a financial industry that is about half the size it use to be, there is simply no longer as great a need, even for top-tier work.

      So sad, so bad.

    • Take the $80K. Get bartending job. Pay down student loans...or buy a cheetah.

    • If things don't improve, these people are going to be canned. So it's not so great to be them. Ordinary attrition has slowed way down in addition to work slowing way down. Both of these things mean that the old model of hiring a fifth of your associates every year is broken for the foreseeable future. It just doesn't make economic sense to keep a lot of these new associates who were hired with boom times in mind.

      It will take several years to work through the glut of associates of 2008, 2009 and 2010. And there's no way they can all fit, unless new hiring completely stops at some of these firms. Relationships with law schools are ultimately more important than the junior associates so look for firms to continue hiring from law schools and to eliminate overhang by cutting the 09s and 10s to the bone.

    • @diogenes

      Corporate undoubtedly got the worst of it. But litigation is way way down as well. Businesses are hoarding cash and they are unwilling to spend on long term projects of uncertain outcome, whether that's research, a new marketing initiative, or litigation.

    • The reason expressed by the firm is a classic commentary on associates in their first years of 'big law.' It states that conditions external to the firm have "reduced the rate at which our associates have left the firm for other opportunities." With this slowdown the lemmings are not crossing the breach as rapidly as in past seasons.

    • I don't know if I'll be back soon....

    • Lets be clear here - this is a severance payment, plain and simple.

    • The firms have and will retain the upper hand because law school is such an easy default option for so many kids who lack the clarity of mind, passion, courage or all three to make career decisions and pursue them upon completion of college. So there will always be an oversupply of fresh meat, even when recruiting is restricted to the elite law schools. What must change is the retention of relatively unproductive "service" partners who are overpaid in relation to their contributions -- the guys who search out their colleagues in the hall, ask what they're working on, manufacture the briefest conversation about the matter and then bill two-tenths of an hour to "confer. Joe Jones re Hart Scott issues" -- because they are desperate to have billables. If I were a client, I would be more vigilant than ever with bills.

    • I'd prefer a cougar.

    • poor spoiled brats

    • where i come from 80 thousand dollars to do nothing is called hush money...
      Realist is correct.
      Take the deferral and you will never see the inside of Cravath again

    • "If I were a client, I would be more vigilant than ever with bills."

      If you were a client, you'd know that .2 from a random lawyer, on a random subject never gets paid, even in the unlikely event it got billed.

      "Service partners" who must scramble around for .2 have never been long for the world at top 50 firms; and if you think that low-billing, no-business and no-potential-business partners aren't being squeezed out wherever they exist, you simply haven't been paying attention.

      The greater problem is the once-important partners whose contribution is no longer commenserate with their compensation--those guys aren't humping around for .2, 2.0 or even 20 hours--they are just billing their 1250 and resting on their laurels, collecting their 70th-percentile draws. Those are the guys who need to go.

    • As someone who frequently hires local counsel for out-of-town cases, I've seen plenty of those .2 "random lawyer" billing entries. There are many, many big firms outside the "top 50", and they have plenty of deadwood partners scrambling. I agree these are endangered species, but a lot of them remain, protected by more powerful allies within their firms and by cultural inertia, living by their wits from one year-end comp decision to the next. Clients of large law firms are some of the dumbest consumers around, and while many are catching on, many more have a lot of catching up to do.

    • I am not the counsel that reviews Cravath's bills, but they have always been reasonable, given the current market. If I ask for one partner and one associate to staff a transaction, I usually get that. I think that they are a fine and healthy firm.

    • This is a no-brainer. Go to work and get your real legal career under way.

    • As someone who's just graduated from law school this spring, I don't feel sorry for those in these situations at all. Most of my classmates are graduating without any job offers to speak of. I am fortunate enough to have a job, but I'll be working for a fraction of the money these kids will make to do NOTHING during their time off. I've heard my classmates going to big-name firms complain about their situations. But I would advise them to stop and look around at their classmates in bar classes. If they could put everything in context, they'd realize how lucky they are (both to have a job and to have an offer to receive huge sums of money for doing nothing) and stop complaining.
      And, as an answer to what I would do in their situation . . . I think I would start working instead of taking the deferment. I might go insane with nothing to do for that long. And, despite what many think, it's going to be difficult to find volunteer opportunities at public interest firms. They have limited resources and don't have the time to supervise and train all the new lawyers floating around this year with nothing to do.
      If forced to, I would take the deferment and go volunteer somewhere (perhaps even abroad) where my services (legal or otherwise) are needed.

    • Most legal work should be contingency fee basis, especially on civil litigation.

    • I wouldn't want to be a member of the law school classes of 2010, 2011, or even 2012-- what a glut of young attorneys and new graduates they will have to compete with! Right now, firms have to be careful how they deal with "known" people-- i.e. their new associates and summer associates. After that, all bets are off.

    • I would start my career and get to work. If told I had to defer, I'd take the year to get in shape and write that Great American Novel I've been meaning to get around to.

    • People specifically stopped buying American cars b/c they felt that the UAW was overpaid. How can paying a someone only 6 or 8 years into adulthood $80,000 to sit at home any less ridiculous from the consumer's perspective than that?

    • 6 or 8 years into adulthood? More like 0-1. For a high proportion, it's their first full-time job, and having 10-12 hours of optional class a week hardly makes you an adult while you are in law school. When I graduate and take a job at a firm like Cravath, I'll have never had a job and never lived anywhere except with my parents or in a dorm, and I'll have spent the last seven years wearing sweatpants and waking up at 10:00.

    • It makes me feel good to hear that someone who has been wearing sweatpants and waking up at 10:00 for the last seven years feels confident enough to say "when I graduate and take a job at a firm like Cravath..." Gotta love overconfident/arrogant law students. Hey, why didn't you just tell us your class rank while you were at it?
      Although strangely, you were right about the adulthood thing, especially in your case.

    • The offer to take a year off with a stipend and benefits could be viewed as excessive, but I would advise some of the commentators to avoid making such broad sweeping generalizations about law students and current/future associates. The U.S. is not like other countries where university/professional graduates have minimal debt. Yes, some of the students are probably fortunate enough to take the money and do nothing, but there are those with enormous amounts of debt (and possibly family obligations) - it is not necessarily a free pass to do nothing. And, I don't know kind of life "Not A Law Student" and "LawStudent" have, but not everyone spent their education years waking up at 10:00 am.

    • Not everyone was as extreme as me, no doubt, but few were what I'd consider adults, certainly not to the extent to make them "deserving" of 80k for free.
      And it's "like Cravath" in the sense that it's a corporate firm paying 160k to start, which is the essential part, although it's not as "prestigious" (on the other hand, it didn't defer everyone for a year).

    • Can I get my $80,000 in all ones? It's my turn to put my girlfriend through college.

    • Can I get my $80,000 in 10s and 20s? I need to finance my favorite dancer's coke habit.

    • Shame on Cravath, Skadden and the others who are paying people to stay home. To me this is another example of the sense of entitlement and privilege of Big Law - both the partners and the associates. Only in Big Law can people get $80,000 a year just because they went to a top law school - they don't even have to pretend to work. I hope that clients will not put up with this much longer. Associates are at will employees, and they should be paid to work or not at all. Most people have to work damn hard for $80,000 a year, and this is a slap in their face. Sheesh.

    • You have any idea how many potatoes I'd have to sell to my clients to make $80K?

    • I would love to take the 80k or 65k, and the health and loan assistance (yeah!) and go to Spain right away. Health insurance and loan assistance AND a salary?! I thought that was what a salary was all about, anyway! Are you kidding? Of course!
      For me, it's about paying off my loan as quickly as possible and being in the position to either pretend like none of this ever happened, or to "pursue my passion in a noble profession." I'm not making light of the latter, it's just that the ball and chain of my crushing and ever-increasing debt stunts any exertion of jubilation for The Profession. My debt is proportionate to what I may have had a chance at making a few years out of law school, both amounts being truly preposterous.
      Taking the 165k and working immediately is what I would actually do, though, but again, only to pay if off that much more quickly. From my standpoint, step one is erasing my debt, step two is the luxury of starting my career, which, as I will happily find upon turning around after paying off my debt at the start of step 2, will have already started.
      For me at least, it's about getting my life back on track. In 5 years (a girl can dream) I can tackle the "problem" of finding a job I truly love. It's two different types of input/output: debt is a real problem because there's only one currency to deal with it; "finding your place/self/happiness" accepts all sorts of solutions and is naturally a more enriching and rewarding undertaking, so like John said, "No problem, only solutions."
      I'm a just-graduated law student, however, so I'm still reveling in the freshness of finally getting out of there finally and being free, praise Jesus!

    • . . . . as in take the money and run. From a practicing lawyer of 13 years, 11 at Big Law, and who generally likes being a lawyer and liked the time spent at Big Law. Something for nothing does not come along too often in life.

    • I would look for a new job at a real firm

    • What a waste of money. They don't need to pay anything. Simple supply and demand economics. Skip the class of 09 and even 10 if the economy doesn't improve. Law schools won't shut down; they will always turn out eager grads with fresh minds and attitudes. Why pay an 09er for no work when you can get a 10 or 11 for live deals? Doesn't make sense to me. Nor should it for the partners at these elite firms.

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