Job Searches, Summer Associates

Incoming First Years at Morgan Lewis See $100K of Compensation Go Up in Smoke

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For those of you that have read the comments on the Morgan Lewis layoff post, you already know that MLB is mandating a deferral program for all of its incoming first year associates. We wanted to dedicate a separate post to discuss this plan, as it is very different from what we’ve seen from Latham & Watkins or Orrick.

Here’s how Morgan Lewis characterizes its deferral plan:

Today, we are taking a number of steps to adjust our workforce in light of changed economic circumstances. Among other things, we have decided to defer the start dates for new associates so that incoming entry-level associates will start with us in October 2010. We will offer each affected individual the opportunity to work in a public interest organization between October 2009 and his or her start date, and will pay each a $5,000 monthly stipend.

Unlike Latham or Orrick, this plan is not optional. All incoming first years have to take this plan. Because the plan is mandatory, MLB is in the position where they will have no 2009 first year attorneys. But the firm will save at least $100K on every first year associate they hired.

I say “at least” because obviously not every associate will receive the $60,000 that is contemplated in this memo. The memo clearly states that the monthly stipend will be paid only to associates who secure work at a public interest organization, and even then on a month to month basis. Latham, in contrast, will be giving $75K to incoming first years up-front. (We do assume that the deferral plan includes a “bar stipend” which would bring MLB’s total package closer in line to Latham and Orrick. The memo doesn’t say that specifically though, so we are making an assumption.)

It’s not out of the realm of possibility that some people won’t be able to secure a public interest job by October 2009 (there is not an infinite supply of public interest work). If you don’t get a job until January, you’re not getting a stipend until January, allowing the firm to save even more money.

After the jump, we see that Morgan Lewis expects the tough times to continue right through 2010.

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So, Morgan Lewis will not have first years again until the fall of 2010. But when they do, they will likely not have a double class. 2Ls who have already signed up for MLB’s 2009 summer associate program can not expect to have a job until 2011, and that’s of course only if they get an offer:

We still will have a summer program that provides each of you with a rich and rewarding work experience. We expect that, at the end of the summer, we will make offers in the same manner as in past years. However, because we are deferring the start date for our 2009 first year class, the offers we make to the individuals participating in our 2009 summer program likely will be for a start date during 2011, rather than the fall of 2010. We intend to offer a public interest option, similar to that announced today, for those of you who are affected by this deferred start date.

Now, if a 2L chose MLB over Thacher Proffitt, they’ve got to be feeling pretty good still. But I imagine that there aren’t a whole lot of people who chose MLB expecting not to be able to start working full time until 2011.

Quiet simply, the Morgan Lewis program is one of the more radical things that has been done in response to the recession. The firm is asking two classes of associates to delay the start of their careers for an entire year.

Then again, it’s not like 3Ls and 2Ls that have already signed up to work for MLB have a lot of options right now.

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Read the full memo, sent to the 2009 summer associates, below.

MORGAN LEWIS — MEMO – 2009 SUMMER PROGRAM

To Our 2009 Summer Associates:

Today, we are taking a number of steps to adjust our workforce in light of changed economic circumstances. Among other things, we have decided to defer the start dates for new associates so that incoming entry-level associates will start with us in October 2010. We will offer each affected individual the opportunity to work in a public interest organization between October 2009 and his or her start date, and will pay each a $5,000 monthly stipend.

I want you to know how today’s decisions will affect you as a member of our 2009 Summer Associate Program. We still will have a summer program that provides each of you with a rich and rewarding work experience. We expect that, at the end of the summer, we will make offers in the same manner as in past years. However, because we are deferring the start date for our 2009 first year class, the offers we make to the individuals participating in our 2009 summer program likely will be for a start date during 2011, rather than the fall of 2010. We intend to offer a public interest option, similar to that announced today, for those of you who are affected by this deferred start date.

Many of you are in the process of deciding whether to participate in the Public Interest and Community Service (“PICS”) Program, which has been a part of our summer associate program since 2001. More than ever before, we strongly encourage you to take advantage of this opportunity.

Within the next several days, you will receive a telephone call from your Office Hiring Partner or another member of the Office Recruiting Committee. He or she will explain in more detail the matters discussed in this message.

We look forward to welcoming you to Morgan Lewis in late May.

Earlier: Nationwide Layoff Watch: Morgan Lewis Lays off 216

Is Latham Setting Precedent?

Options for Incoming Orrick First Years

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