Am Law 50 Firm Offers Voluntary Deferral To Incoming Associates Until Fall 2021

Will this become a trend among Biglaw firms?

Thanks to the coronavirus crisis, the legal landscape for Biglaw firms seemed a little rocky for a few months, leading incoming associates to grow worried about their future careers — and rightly so. Amid salary cuts, furloughs, and stealth or outright layoffs, first-year start dates were delayed at many firms until January 2021 and beyond. Were we witnessing a repeat of what happened during the Great Recession? Would another year of law school graduates become a lost generation due to the economic turmoil that rocked the legal world? Outcomes are looking a little rosier now, with salary cuts being walked back and furloughed staff and associates returning to work, but perhaps incoming associates shouldn’t get too comfortable just yet.

Why’s that? The deferral year is making a comeback.

Back in 2009, when Biglaw firms were faced with the problem of too many employees and not enough work, they came up with a unique plan to deal with this issue: the deferral. Incoming first-year associates were offered the chance to voluntarily take a year off and receive compensation for going away with the understanding that they would be able to come back to the firm and resume their Biglaw careers after the deferral. While many sought refuge in the public sector, others focused on having fun and taking trips around the world. Unfortunately, even the best laid plans fall apart, and some associates weren’t welcomed back to their firms on time — or at all, ever.

Ropes & Gray — a firm that landed at No. 13 in the 2020 Am Law 100 rankings, having brought in $1,903,616,000 in gross revenue in 2019 — announced two new deferral programs for first-years earlier this week. Ropes is the first major firm that we know of to offer a voluntary deferral year to its incoming associates.

A memo (available in full on the next page) sent on behalf of Peter Erichsen, the firm’s hiring partner, explains the reasoning behind why these programs are being offered:

This year has truly been one like no other, and we certainly would understand if its developments has prompted a temporary rethinking of your professional priorities. Perhaps you are looking for ways to contribute your knowledge, talent and time to public service work in a variety of areas—fighting racial injustice, addressing housing crises and other needs arising out of the COVID pandemic, or supporting political causes important to you, to name just a few. Alternatively, some of you may have been personally affected by the pandemic in ways you did not anticipate, and could benefit from taking some time off before launching your career.

Incoming Ropes associates have the option of taking either a fellowship year or a sabbatical year, with the promise of joining the class of 2021 when those associates start at the firm. The firm emphasizes repeatedly that these programs are voluntary.

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For those who choose a fellowship year, they’ll have to find another job — during a pandemic — at a public interest organization or at an approved government entity, and will receive a stipend of $80,000 (pre-tax). For those who choose a sabbatical year, they can do anything they want (except work at another law firm), and will receive a stipend of 20 percent of their starting base pay, or $38,800 (pre-tax). Like all of the firm’s associates whose start dates have been delayed, first-years who opt for a deferral will also be eligible for health insurance through the firm starting on October 20, 2020. Those who take a deferral year will still receive a $10,000 October stipend and will remain eligible for a $10,000 loan from the firm.

This all sounds great, but there’s just one catch: incoming associates need to make a decision by October 1. We reached out to Ropes & Gray for comment and received this statement from a firm spokesman, who again reiterated that those who choose not to participate in the voluntary deferral will start as planned in January 2021:

The firm is healthy and the business is strong. Our lawyer activity levels are on pace with 2019, which was an outstanding year. As an example, our asset management and capital markets groups have remained busy throughout the year, and the health care and life sciences groups have been going gangbusters. We’ve also seen M&A activity pick up meaningfully in the third quarter.

We have no plans for any actions like furloughs or layoffs. Associates were reassured of this just today in a Town Hall meeting.

The fellowship is completely voluntary. We recognized that in the current climate, some people might want to switch gears and focus on public service, and the program is designed to help them do that. We have heard from some associates that this is something they have been wanting to do; and we have heard from public service organizations that they need help.  We know there is a need for help in our communities, and this is one way our lawyers can contribute.

We got positive feedback from our current associates who appreciate the opportunity, and we wanted to make the same option available to incoming associates.  (To clarify, the fellowship program is offered to current associates, too.)

Good luck to incoming associates at Ropes & Gray who choose to embark upon a voluntary year-long deferral. Let’s hope it all works out for the best.

If your law firm planning to offer deferrals to incoming associates? Please text us (646-820-8477) or email us (subject line: “[Firm Name] Deferrals”) and let us know.

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(Flip to the next page to see the memo from Ropes & Gray in full.)


Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.