Kaye Scholer has announced that its incoming first year associate will still be starting in January. All of them. But there is a catch. Kaye Scholer will split the class into two groups of full time associates. One group will work for the firm’s paying clients and get paid the normal first year starting salary. The other group — roughly half of the class — will work exclusively with the firm’s public interest group and will make $60,000.
Above the Law spoke with Kaye Scholer managing partner Barry Wilner about the program. He emphasized that the firm wanted to invite everybody in its first year class to start at the firm because the class is “excellent.” But he acknowledged that the demand for legal services isn’t what it used to be. Instead of sending half of its class back out on the street to look for public interest work, Wilner wanted to put them to work under the umbrella of Kaye Scholer’s pro bono efforts:
It’s incredibly difficult to get public interest work in this environment. … It’s a good thing from the standpoint that the firm is providing excellent public interest training and mentoring.
Wilner also told us that the public interest associates would still have access to all of the training other first year associates have, and they would be eligible for full firm benefits.
Associates weren’t asked to volunteer to be in the public interest group. Wilner said that the firm had to make difficult decisions about how to split the class. Practice group preference was one factor. But Wilner also said that because the incoming class was strong across the board, some amount of arbitrariness also played a role.
After the jump, incoming associates in the public interest group weigh in.
People in the public interest group were informed over the phone. They don’t appear to be happy about their suddenly reduced salary:
Just got a call from one of the Kaye Scholer hiring partners. They’ve made a dramatic change to our job offers. Incoming first-years are now to be paid just $60,000/year to do pro bono work starting in January. It is not optional. The real kicker, though, is that we are required to do pro bono work at the firm. We do not have the option to be paid to work at a non-profit, as other firms have allowed. This is particularly troublesome because it’s impossible to select a different market than New York for the interim period. Additionally, most of us took a $10,000 salary advance in August (assuming we’d be paid somewhere in the neighborhood of $160,000 starting in January), which has to be repaid out of the $60,000 salary. That means incoming New York first years are somehow expected to live and pay student loan bills on $50,000. Our peers at other firms at least had the option of taking a reduced salary to a different city where the cost of living is less.
Having to repay the August to January stipend is a common contention from our tipsters:
This is a new creative way to avoid rescinding offers: KS is bumping “about half” of its incoming first years (slated to start on 1/11) to an in-house “public interest program” where they will be doing pro bono work and getting paid $60K a year (and get health benefits). KS said in NY, the number is more than half. The $10K loan given over the deferral period is counted into the $60K, so the 2010 take home pay is $50K before taxes (based on a $60K salary). The full pay associates were chosen based on demand among groups (apparently people who wanted corporate and bankruptcy all got it), and from there it was seemingly random. As of now, there is no criteria for when you can switch to full pay track (aka what % of your work needs to be client work), and it is unclear what will happen at the end of 2010 if there is not enough client work to sustain all pro bono program people and all 2011 incoming associates. KS did make a point to say that we are all considered first-year associates regardless of pay.
Even when some incoming Kaye Scholer associates got over the financial situation, they still took umbrage with the suggestion that Kaye Scholer’s program constitutes the firm making good on its offer for employment:
They are presenting this as fulfilling their commitment to starting their first-years on schedule, which merely adds insult to injury. The fact that Kaye is a litigation-based shop, without any significant drop in (reported) 2008 profits, means that there is something they are not disclosing to the public about their financial situation, or they are either being incredibly opportunistic–even for Biglaw!–and think they can get away with it because, where else are their supposed first years gonna go?
Well, that is a good question. Where else are first years supposed to go? There is nothing stopping incoming Kaye Scholer associates from finding a $60K (or $50K depending on how you want to look at it) job in a secondary market and studying for the February bar — ssuming of course that such jobs exist.
Good luck, Kaye Scholer incoming associates. At least you don’t have figure out a clever way of updating your resume.
Earlier: Nationwide Pay Cut Watch: Kaye Scholer Lowballs Low Billers
Nationwide Layoff Watch: Kaye Scholer