The cocktail of choice these days for many large law firms seems to be one part layoffs, one part summer program curtailment and one part deferral of start dates -- sometimes with a twist of salary cuts.
Some in the community think making salary cuts a bigger part of that equation could reduce the need for the other ingredients.
Dechert was the latest firm to push back its first-year associate start dates, and it took the less common staggered approach in doing so.
The firm will have three waves of start dates for the 63 first-year associates that were slated to start this fall. One-third of the group will begin on Oct. 19, a few weeks after the normally scheduled start date. The other two groups will start either March 22, 2010, or in the fall of 2010, a firm spokeswoman said.
All three groups will receive their bar stipend, the March group will receive $17,500 for their troubles and the fall 2010 group will be paid $75,000, she said. The March and fall 2010 groups are "expected" to find jobs in the public interest sector during their deferral periods and the firm will help them do so, she said.
Dechert has given the first-years the opportunity to choose which start-time they would want and the firm will take that into consideration along with the firm's practice area needs when deciding who will start when, the spokeswoman said.
THE VIEW FROM LAW SCHOOL
Amy Montemarano is the assistant dean of career and professional development at Drexel University's Earle Mack School of Law. She said there are several students at the school who have been affected by deferrals and they are in different situations. She said January deferrals are manageable, a year-long deferral is tougher to deal with and those deferrals that are indefinite pose the greatest challenges.
Law schools are trying to help students and many of the firms are doing as much as they can, she said. Montemarano said about half of the Drexel students who are affected were given stipends by the firms.
Large law firms have historically been faced with the challenge of recruiting so far in advance that they have to make predictions on the economy and their needs about two years out, she said. While she can't blame them and said she wouldn't be one to offer a better business model, Montemarano said firms might want to look at salary adjustments.
"Certainly I don't think it would hurt the market to lower the starting salaries and avoid what's happening right now," she said, adding that clients are scrutinizing bills and aren't as willing to pay for work done by first-year associates.
Montemarano said she didn't think it would hurt the market to spread salaries out a little bit better because the huge salary disparity between a public interest job, for example, and a large law firm gig causes a lot of students to struggle with making a decision on where to start their legal careers.
Montemarano did say that while she expected panic on the part of deferred associates, she is finding they are taking the deferrals in stride and are recognizing what's happening in the market.
THE PUBLIC INTEREST P.O.V.
Catherine Carr is the executive director of Community Legal Services of Philadelphia and has been working on bringing several deferred associates into her offices.
She said she thinks her organization needs all the help it can get and can also offer exciting opportunities to the incoming associates. Bringing future law firm attorneys on board also extends CLS's reach into the community and gets a new group of lawyers interested in the work they do and maybe interested in later serving on the board or offering pro bono services, she said.
On the whole, Carr said she is very pleased that firms are recognizing the needs of the public interest sector and directing resources its way.
"At the same time I won't pretend there aren't complications on our end," she said.
Those complications range from nitty-gritty concerns like where will the deferred associates sit and who will pay for their new computers, to more "emotional" issues, as Carr called them.
There are law school graduates at the tops of their classes who had made a conscious decision to forgo law firm salaries and work in the public interest sector. Those students aren't able to find public interest jobs, however, because the economy is so bad and none of the organizations are hiring, Carr said.
"They are watching the people who didn't care as much about the public interest, who weren't willing to make that sacrifice, and they're going to get the jobs in the public interest sector," she said.
That irony is most affecting CLS's younger attorneys who are the closest to having gone through that process, she said. There is also a fear among existing employees, though Carr said it won't be the case that bringing on free help would make it easier to fire paid employees in these tough economic times. Carr said their experience can't be replaced by attorneys who are coming in for a year or a few months.
At a time when budget restrictions are limiting what public interest organizations can offer their employees, it's also a concern that the employees will be asked to take on more work in training the new attorneys. Carr said she thinks it would be difficult to have someone come in for just four months because of the training that is required. She said she would give preference to deferred associates who could stay a full year.
The other, more concrete issue, is the cost associated with bringing on these deferred associates.
"I have an obligation to existing staff not to put funding into costs of these associates at a time when I'm trying to save every dollar to save every job here," Carr said. "Ideally we would get the firms to put a little money into costs associated with these associates."
She said she hasn't heard of any firm doing that yet.
PUSHING BACK HOW FAR?
Only Morgan Lewis & Bockius and Ballard Spahr Andrews & Ingersoll in the Philadelphia market have decided to push their start dates back for all associates by one full year. Morgan Lewis is requiring that its first-years find a public interest job in order to get the $5,000-per-month stipend the firm is offering those students.
Ballard Spahr was reported to be offering a $45,000 stipend to deferred associates in addition to the standard $5,000 bar stipend the firm usually offers. It was also said to be offering a $5,500 stipend to cover health care costs. The firm has not confirmed or denied these reports.
Morgan Lewis Chairman Francis Milone said his firm's decision not to bring on around 70 or more first-years in 2009 was based in part on client expectations. Milone said it is becoming increasingly difficult to justify to clients the use of more junior attorneys.
Buchanan Ingersoll & Rooney was the most recent firm behind Dechert to confirm it would delay start dates. A firm spokeswoman confirmed that start dates for first-year associates would be pushed back from September 2009 to February 2010, the start of the firm's fiscal year. Those associates will be given a monthly stipend to cover living expenses, she said, though she didn't know the exact amount.
Saul Ewing has deferred the nine first-year associates who were set to start this fall until "at least Jan. 1, 2010" though it could be later depending on the needs of various practice areas. The deferrals are in a sense indefinite because there is no deadline by which the first-years would have to start.
Blank Rome has also deferred its first-years until "at least January 2010."
Pepper Hamilton is pushing back start dates until Jan. 19 for its 27 incoming first-year associates. Firm executive partner Robert E. Heideck said the firm will offer the bar stipend only.
Stradley Ronon Stevens & Young has delayed start dates until Jan. 4 for its 10 incoming associates and Reed Smith has deferred incoming first-years until January as well.