Add RSS RSS

Skadden’s Sidebar: Phase One Complete

Skadden logo.JPGPhase One: Offer associates a third of their salary to take a year off.
Phase Two: ???
Phase Three: Profit!

The Sidebar program of Skadden Arps received a glowing review in the New York Times this morning. Evidently, one-third of a Biglaw salary to not work in Biglaw is a dream job. The Times piece focuses on the story of Heather Eisenlord, a banking lawyer at Skadden who wants to use her year off “to teach English to monks in Sri Lanka, and possibly help bring solar power to remote parts of the Himalayas.”

Friday was the last day for associates to enroll in the Sidebar program. According to the Times, 125 people have expressed interest:

As of Friday, about 125 associates had expressed interest. “I think it’s fair to say that the numbers are in excess of our expectations,” Mr. Mallow said.

Only at a corporate law firm would the managers underestimate employees’ interest in taking a year off from the grind for what most of America would consider a small fortune.

A small fortune? Only the NYT’s incongruous desire to appeal to “average Americans” would make it characterize a little more than $50,000 (a third of a first-year associate’s salary) as a “small fortune.”

But that is neither here nor there. It seems that Skadden’s year-long voluntary departure program has actually worked. So far.

After the jump, we try to figure out why.

We’ve already seen that voluntary departure programs under the threat of layoffs don’t work.

But Skadden seems have done two things very well with its Sidebar program. Here’s one:

Not only were the lawyers assured that their time away wouldn’t hurt them; in some ways it would be protective: If there are layoffs while they are away, they will be immune.

The fact that the Sidebar option has been so thoroughly detailed in the press might further protect associates taking the option. It won’t be easy for Skadden to turn around and lay these people off in a year after so publicly suggesting they would have some job security.

Skadden also got the money right. As we’ve detailed time and again on these pages, some of the layoffs we’ve seen could be called forced attrition. In a normal economy, mid-level and senior associates who aren’t likely to make partner would be leaving the firm for less intense pastures. But because of the market meltdown, those people have been desperately trying to hang onto their jobs.

Regardless of how the NYT writers live, fifty grand is not a small fortune for a 25-year-old fresh out of law school. But further up the chain, a two-thirds pay cut is generally in line with what many folks are willing to accept in order to get out of Biglaw.

Instead of forced attrition, Skadden’s program starts to look like a mercy killing. Skadden is giving people who want to get out an opportunity to leave in spite of the terrible economy. In a way, whether or not these people have a Skadden job waiting for them when they come back is beside the point. The more important point is whether these people will have numerous job options in a year’s time, the kinds of options people are supposed to have after putting in five or six years with one of the nation’s top firms.

Sidebar has given Skadden a way to temporarily rid itself of a number of people who might have left anyway in a better economy. If the economy is back on track in a year, everything should be fine.

If not, somebody is going to have to pay the price.

$80,000 for a Year Off? She’ll Take It! [New York Times]

Earlier: Skadden Offers a Voluntary Deferral Option

Comments

Comments hidden for your protection. Show them anyway!

Post Your Comment