Deferral Stipend

Shearman & Sterling Offers Voluntary Year-Long Deferral to All Associates

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Shearman & Sterling has decided to mimic the Skadden Sidebar program and offer all of its associates the option to defer for a year. The program is essentially the same set of options that Shearman offered its incoming first year associates a month and a half ago.
The money from Shearman’s “External Development Program” is not as good as what Skadden offered:

Participants in the External Development Program will receive a stipend of $65,000. Associates participating in the program will not be employees of the firm during the program year, but the firm will pay for medical benefits during the program year.

That works for junior associates. But Skadden offered all associates one third of their salary, making the option more viable for mid-level and senior associates.
Shearman’s health care benefits are a nice touch (Skadden made COBRA contributions). But one of the nice perks from Skadden’s program was overlooked in the mainstream media gushing over “$80,000 to do nothing!” Skadden also offered $1,000 a month for student loan repayment. Shearman does not.
Some additional details and the full memo, after the jump.


Obviously, Shearman expects that associates will return to the firm after their year off:

Associates who participate in the External Development Program will be able, and are expected, to rejoin the firm following the completion of the program. In most cases, the firm will not expect class year matriculation for activities or work performed during the program year. In limited circumstances, and on a case-by-case basis at the associate’s request, the firm and the applicable practice group will evaluate whether activities or work performed during the program year warrant class year matriculation.

But some associates aren’t so sure. One tipster put it this way:

Those who take this should probable say goodbye to any friends they work with (if those exist), might be the last time you see them. People have until May 22nd to decide. Who knows how many will take this, but after there widespread “performance” layoffs I imagine a few will look into it a bit harder now. Just remember $65,000 goes a long ways in Mexico.

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Shearman has conducted a couple of rounds of stealth layoffs. This External Development Program seems to be a lot better than a severance payment.
Would you take Shearman’s offer?
Read the full memo below.
SHEARMAN & STERLING — MEMO — EXTERNAL DEVELOPMENT PROGRAM
The firm has decided to provide all associates in the firm’s offices in the Americas with the option to take a one-year leave from the firm to pursue public interest or pro bono activities or academic or personal development opportunities. This External Development Program and our recently announced Delayed Start Program for the incoming Class of 2009 associates are part of our efforts to manage associate levels in light of current activity and to ensure meaningful developmental opportunities for all of our associates.
The External Development Program is available to all U.S. track associates in good standing located in the firm’s Menlo Park, New York, San Francisco, São Paulo, Toronto and Washington, D.C. offices. Participation in this program will be subject to, among other things, the approval of your practice group leader or office managing partner, based on business needs of your practice group. Associates who participate in the External Development Program will be able, and are expected, to rejoin the firm following the completion of the program. In most cases, the firm will not expect class year matriculation for activities or work performed during the program year. In limited circumstances, and on a case-by-case basis at the associate’s request, the firm and the applicable practice group will evaluate whether activities or work performed during the program year warrant class year matriculation.
We strongly encourage associates who participate in the External Development Program to pursue public interest or pro bono activities during the program year. The firm has arranged for a variety of highly-regarded opportunities with community associations, pro bono legal organizations, not-for-profit groups, foundations and governmental and non-governmental organizations to be available for associates who choose to participate in the program. For those interested in these types of opportunities, we will provide assistance in finding the right position.
The program also is open to those eligible associates who would prefer to use the year for academic pursuits, such as degree programs or complementary course work, or to pursue personal development interests.
Participants in the External Development Program will receive a stipend of $65,000. Associates participating in the program will not be employees of the firm during the program year, but the firm will pay for medical benefits during the program year.
As part of the implementation of the External Development Program, the firm is terminating the Career-Related External Development/Short-Term Non-Home Office Transfer Program, which allowed U.S. track fifth and sixth year associates to spend either one month in a career-related external development activity or three months in another office of the firm. In the future, the firm will continue to encourage all associates to consider non-home office transfers, secondments to clients and other similar opportunities on a case-by-case basis.
Although our External Development Program is open to all eligible associates, participation will be subject to practice group or office managing partner approval. Please contact [Redacted] and your practice group leader by May 22, 2009 if you would
like to participate in the External Development Program. We will inform you by the end of
May, if your practice group or office managing partner has approved your request to participate in the External Development Program.
The partners of the firm view this program as an extraordinary opportunity to spend a year providing valuable public service or to pursue academic or other personal interests and we encourage all associates to consider this opportunity.
Please call either of the undersigned or any of the individuals listed on the following page with any questions about the program.
Earlier: Skadden Offers a Voluntary Deferral Option
Shearman & Sterling Pushes Back Start Dates: Class of ’09 v. ’10 Can Now Begin Fighting In Earnest
Skadden’s Sidebar: Phase One Complete
Stealth Layoff Watch: 5% Litigation Cuts at Shearman & Sterling

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