June 17, 2009 4:11 PM
Most Profitable Firms Are Resisting Deferrals
Posted by Rachel Breitman
While many law firms say "better late than never," when it comes to associate start dates, the most profitable Am Law 100 firms don't agree. The top ten Am Law 100 firms in profits per partner have largely avoided using deferrals to deal with a potential overstaffing crunch this fall.
Exceptions include Cravath, Swaine & Moore, which announced last week that it would pay $80,000, plus health coverage and loan repayment stipends, to new associates who take optional yearlong deferrals and start in 2010. Meanwhile, new hires from Cravath's current summer associate class will have to take mandatory yearlong leaves--during which the firm will pay them $65,000--before starting in 2011. Cravath follows in the footsteps of Simpson Thacher & Bartlett, which introduced an optional Public Service Fellowship in February for yearlong deferrals, paying $60,000 plus health insurance. The only top ten firm that is making deferrals mandatory this year is Schulte, Roth & Zabel, which is requiring all new associates to start in 2010.
But the rest of the top ten most profitable partnerships are taking a different path. Wachtell, Lipton, Rosen and Katz; Quinn Emanuel Urquhart Oliver & Hedges; Boies, Schiller & Flexner; Sullivan & Cromwell; Paul, Weiss, Rifkind, Wharton & Garrison; Kirkland & Ellis; and Cleary Gottlieb Steen & Hamilton are starting all of their associates next fall as originally scheduled.
When asked whether their start date had been moved or there had been deferrals of any kind, a spokesperson for Paul Weiss said, "Our start date is, and has always been September for new associates." With clients like Citigroup Inc. and American International Group, Inc., the New York-based firm's active litigation practice will likely help keep the 86 new associates sufficiently busy.
Similarly, Quinn Emanuel will start all its associates on time. In fact, the firm says they can begin any time after they take the bar exam. Cleary and Wachtell associates will have staggered start dates throughout the fall, as usual, and Kirkland and Sullivan & Cromwell will start all associates in November.
When it comes to the top-grossing firms, the number of firms avoiding deferrals is far smaller. Of the top ten Am Law 100 firms by revenue, only Jones Day and Kirkland & Ellis will be starting all associates on time. Skadden, Arps, Slate, Meagher & Flom; Latham & Watkins; and Sidley Austin have offered optional paid yearlong leaves, and Baker & McKenzie, White & Case, Mayer Brown, and Greenberg Traurig have pushed back start dates until various dates in 2010.
"We will be starting all 152 associates in November and are not deferring associates or offering a stipend for a year of nonprofit work," says a Kirkland spokesperson.
For Jones Day, which ranked fourth in gross revenue, the decision to keep all associates on track is based on a desire to train the incoming class together as a single group. The firm, which has been engaged in bankruptcy work for Chrysler Group, LLC and in litigation for Lehman Brothers Holdings Inc., will start all 154 new associates on October 26.
Make a comment