These incoming associate deferrals are getting out of control. Stroock is the latest firm to come up with an innovative plan to deal with its new class of first years.
Above the Law has been able to confirm that Stroock is offering incoming first years a payment of $75,000 to leave the firm by July 1st. Half of it will be paid in September 2009, the other half in January 2010.
This would make Stroock the most well-known firm to rescind (kind of) offers to 3Ls. But unlike other firms, Stroock is making it a voluntary decision, and they are offering a significant financial windfall. And give Stroock some credit for dropping the pretense that there will be more than enough work for both the class of 2009 and the class of 2010, next year.
Pillsbury offered a voluntary departure program to its associates. But Pillsbury didn’t let people know what was waiting for them if they didn’t take the offer. Stroock, perhaps learning from that mistake, isn’t asking incoming first years to make their decision in a vacuum.
The other options for Stroock first years after the jump.
But that’s not all. If you don’t take the voluntary offer revocation, and if you want to start working this decade, then the earliest offered start date is January 2010. There’s a $10,000 advance — not a stipend — that will be released in September for those wishing to start as soon as possible.
It’s all explained in the firm wide memo (posted below).
So, what would you do? It’s a little late in the game for firms to be announcing start dates, so incoming first years will have to make a quick decision.
Skadden received a lot of positive press for allowing all associates to take a year off of work for a third of their salary. How will the media react when they see that Stroock is giving $75,000 to people who will never bill an hour for the firm? Is this a great opportunity, or a slightly above market severance package?
Read the full memo below.
STROOCK — MEMO — DEFERRAL OPTIONS
As you know, many businesses have been facing challenging and uncertain times during this time of economic downturn. This uncertainty has negatively impacted activity levels and current staffing needs across many law firms, including our own. With the above in mind, we have decided to take a series of steps to address these issues.
First, the start date for the incoming class will be January 11, 2010. Prior to this date, you will be expected to take and pass the New York bar exam. We will cover related expenses for both the bar review course and the bar exam itself. We also will make available to you a cash advance of $10,000 in September to help cover your expenses. In addition, if applicable, we will reimburse your moving expenses to New York, up to $2,000.
Second, we offer the opportunity to defer your start date until January 2011. If you select this option, we will provide you with the cash advance in September and, starting in January 2010, will provide you with an annual stipend of $50,000 to be paid monthly for so long as you secure an approved position in the public interest field (which includes government service) for a period of up to one year. We will endeavor to provide you with leads based on contacts that the Firm has but you should feel free to seek your own opportunities. Should your schedule permit, we also would be pleased to include you in our in-house CLE programs and other firm functions, which would enable you to stay abreast of current legal issues, as well as provide opportunities to stay in touch with our attorneys. Following this deferral, the current expectation is that you would start with the Firm in January 2011, although this is subject to change depending upon our hiring needs at the time. Of course, should you join the Firm at that time, you will be expected to have taken and passed the New York bar exam prior to starting with us.
Lastly, the Firm recognizes that you may wish to pursue other opportunities, outside of Stroock. If this is the case, we will make a total payment to you of $75,000, half payable in September 2009 and half in January 2010. By accepting this payment, it should be understood that you would have no current or future obligation to Stroock, nor would we to you. It should also be understood that we will only offer this option now and should you, for whatever reason, ultimately not join Stroock, this option will not be available.
While we recognize that the current times are difficult, it is our hope that we can work to determine the option that is most well suited to you. We will, of course, continue to monitor our activity levels and staffing needs, so as to make decisions appropriate to the Firm. With that in mind, we ask that you please contact either [Redacted] or [Redacted] to discuss your thoughts and preferences with them. To facilitate proper planning, the Firm needs to know your decision by July 1, 2009.