Up until A few weeks ago, third-year law student Elijah Watkins assumed he would show up for his law firm job starting in the fall after graduation -- just as class after class of newly minted lawyers before him had done.
But in early March, Watkins learned that the old rules don't apply when the economy is tanking and when law firms are desperate to keep expenses down.
His future employer, Latham & Watkins, had decided to delay the start date of his class from September to December. The law firm also was offering $75,000 to incoming associates who deferred their start dates more than a year to October 2010.
Watkins is just one of many young attorneys and soon-to-be attorneys who are grappling with the fallout of the abysmal economy. Associate layoffs have grabbed legal headlines since the fall, but firms also are employing a number of tactics to delay adding lawyers to the payroll during the economic slump.
In addition to delaying start dates for incoming associates, some firms have trimmed back or even eliminated their 2009 summer associate programs and rescinded job offers made to 3Ls. Not only that, a handful of firms have extended offers to current associates to leave for a year and work at a public interest law organization for a reduced salary.
These start delays and public interest programs mean that students like Watkins must weigh their options and make decisions about their immediate post-graduation futures.
"I'm in a different situation than many of my classmates," said Watkins, 28, who attends the University of Illinois College of Law. "I have a wife and a child. For me, insurance and health benefits are an important issue."
For those reasons, Watkins is leaning toward the December start date with Latham. He plans to spend the three months between the end of his summer fellowship with the Public Interest Law Initiative and his start date with the firm visiting and reconnecting with friends and family.
Watkins said he feels fortunate that Latham has been up-front with incoming associates, and has given them options -- something many of his law school classmates don't have when it comes to their delayed start dates.
Start-date delays and public interest programs are not new ideas, but legal experts say firms have never made such sweeping efforts to delay bringing associates on board.
"We saw a little bit of this back in the early 1990s, with some firms delaying start dates, but the delays weren't for a whole year," said Mark Santiago, a legal consultant with Kerma Partners. "It wasn't as widespread. We're seeing a lot of this type thing right now."
Watkins said nearly all of his classmates who are heading off to law firm jobs have been told of start-date delays or are expecting such an announcement shortly.
Not surprisingly, the spate of law firm start-date deferrals and shortened or cancelled summer programs is creating anxiety on law school campuses, and career services administrators are scrambling to help students plan for their futures.
"We've never seen law firms deferring start dates like this. It's new for us and our students," said Heather Frattone, associate dean for career planning and placement at the University of Pennsylvania Law School. "For some students, it's just a couple of months, but for others it's a much longer time. There is definitely some concern out there."
Students are worried about health insurance and benefits during the gap between school and their firm start dates. They also are concerned about paying student loans in the interim and maintaining their professional skills in their down time, Frattone said. Career advisors at Penn and other law schools have been meeting individually with students to discuss their options.
The career center at Duke Law School held a session for students several weeks ago called "What Can You Do Besides Wait?" The program encouraged students with deferred start dates to take advantage of public service opportunities, to complete continuing legal education requirements and to maintain contacts with people at their firm, said Bruce Elvin, the associate dean of career and professional development at Duke Law School.
"We have a bunch of students heading to Latham and other firms that have delayed start dates. It seems that the firms are really trying hard to keep their commitments to students," Elvin said. "At the same time, the students are worried about what the future holds. Who knows what the world will look like in a year? The students recognize that."
Start-date delays vary among firms. Some firms are delaying start dates for only a month or two, while others have longer delays with a public interest component to them. For example, Orrick, Herrington & Sutcliffe has moved back the start dates for half of its incoming associates until January 2010, while the other half will start in March of that year -- about seven months later than normal. Morgan, Lewis & Bockius has pushed back incoming associates start dates for an entire year, meaning it won't have a 2009 associate class. However, the firm has said it will pay a $5,000 monthly stipend, up to $60,000, to associates who work at a public interest organization during that time.
"We have the same issues as many other firms, with the economy and less attrition," said Eric Kraeutler, the firmwide hiring partner at Morgan Lewis. "We felt it was important to make a decision and give our associates some certainty about what they would be doing next year."
Kraeutler said the law firm has received a positive response to its public interest option thus far from many of its 68 incoming associates. It also has received questions about benefits during the interim. Kraeutler said the firm hasn't decided whether it will offer health insurance to the delayed associates.
UNCERTAIN FUTURE EFFECTS
Although law firms can save money by delaying start dates, not everyone agrees that it's a smart decision in the long term. "The layoffs and the delayed start dates are a dangerous road to go down," said Santiago, the law firm consultant. "If you think about a seven- to nine-year track for partnership, and you don't have a class of 2009, when you go to make partners in seven or nine years, you're going to have less of a choice."
Down the line, firms may end up adding attorneys to the partnership who wouldn't typically make the cut, Santiago said, or they may have to shell out the money to bring on lateral partners instead.
Altman Weil consultant James Cotterman, however, said there wasn't much of a long-term negative impact on law firms that delayed associate start dates in the early 1990s.
"Skipping one entry class is minor in law firms with decade-long tracks to partnership," Cotterman said.
As difficult as it may be for 3Ls heading to law firms to figure out what to do with an extra couple of months or a year, it could be worse.
A handful of law firms and legal departments have rescinded offers to incoming associates, forcing those 3Ls to restart their job searches. Luce, Forward, Hamilton & Scripps of San Diego has confirmed that it rescinded offers to all of its incoming associate class and cancelled its 2009 summer associate program. Lowenstein Sandler of Roseland, N.J., confirmed that it revoked the job offers of three of its 18 incoming associates. Smaller firms Irell & Manella; Sughrue Mion; and Morris, Manning & Martin reportedly have rescinded offers to at least a portion of their incoming associates.
Dan Vause can sympathize with their situation. The 28-year-old graduated from Northwestern University School of Law last May. The California firm that offered him a job initially pushed his start date from September 2008 to January. When Vause didn't pass the California bar exam the first time, the firm moved his start date back to March. Two weeks before his March start date -- and after he had signed a lease and moved his belongings from Salt Lake City to California -- the firm laid off several first-year associates and told Vause not to show up for work. For all of his hassles, Vause received $5,000 to help move back to Utah.
Now, Vause is awaiting the results of his second California bar exam and is planning on taking the bar in Utah. He's looking for work in Salt Lake City and in the federal government, but opportunities have been scarce. With his law school loans in forbearance, Vause is contemplating his next move. "Basically, I've lost a year. Soon I'm going to be competing with current 3Ls for jobs, and I don't have much to show for the past year," he said. "I've done all the things I was supposed to do to get a good job, and nothing has turned out the way I anticipated it would."
