Deferral Stipend

If You Bail on Biglaw, Do You Have to Repay Your Deferral Stipend?

Thumbnail image for Red Cross public interest deferral stipend.JPGLast week, we wrote about an interesting claim made by Russ Ferguson in the American Spectator. The Georgetown Law grad suggested that fellow deferred grads who had a taste of the sweet nectar of the public interest lawyer lifestyle may not be willing to swallow Biglaw when the time comes. Even with a six-figure salary to help it go down.

We were skeptical. Law Shucks thinks he’s batsh*t crazy. However, when we polled the deferred — in our admittedly unscientific survey — a third of them said they were done with Biglaw:
Public interest deferral stipend poll results.jpg
That made us wonder. If you bail on Biglaw, what are the firm’s expectations when it comes to that $40k – $80k in go-away-and-play-for-a-year money?

We reached out to a handful of Biglaw firms. Those who were willing to respond did not want to be identified but told us they won’t require repayment of the deferral stipends.

Some have speculated that firms would be happy to lose some new lawyer weight, but that’s not true, according to our sources. One source told us there would be heartache — and potentially, reference retribution — for deferrees who absconded with their stipend:

We would be surprised and disappointed if someone were to take the stipend and not honor their bargain. Further, given the importance of professional references, we would not expect a lawyer who is just starting out to act in a way that calls into question their ethics, their professionalism and their understanding of contractual obligations.

In addition to ethical concerns, there may be financial considerations. We’re not sure why some firms chose not to respond to our inquiry. But perhaps they’re among those who will require deferral stipend repayment. On our prior thread, some commenters claimed that they had to repay their deferral stipends if they don’t go to work for their firms:

I’m a class of 2009 deferred associate. If I don’t start at the firm when they ask, or I voluntarily leave before one year, I have to pay back the $70k stipend.

I already told my firm that I was not returning and that I will be going to a PI firm. I was asked to pay back a pro-rated amount of the stipend based on the time I spent working at my deferral organization. That seemed pretty fair to me.

These commenters did not identify the firms. How widespread is this? Let us know in the comments or send us an email.

Having to pay back the deferral stipend on top of student loans would make the public interest sector nectar a lot less sweet.

After the Crash [American Spectator]
Earlier: Once You Go Pro Bono, You Never Go Back?

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