Cravath Will Pay New Associates $80K to Stay Away for a Year
Cravath, Swaine & Moore is trying to cope with a larger than expected incoming associate class by offering $80,000 to any lawyers who agree to stay away for a year.
Lawyers who take Cravath up on the offer will also be paid as much as $1,000 a month to cover student loans and the cost of medical and dental insurance, Bloomberg News reports. The publication is basing its report on an internal memo.
The offer puts Cravath at “the top of the deferral stipend market,” Above the Law reports.
One-hundred fifty lawyers had planned to start work at Cravath in the fall, and another 120 are joining the firm as summer associates. The deferred start date is optional for the incoming 2009 class, but summer associates aren’t as lucky, according to the article. Cravath is paying them $65,000 to push back their start dates from October 2010 to a year later, and the delay is not optional.
Up to half of the incoming associate class may opt for the $80,000 deferral offer.
The classes of incoming lawyers and summer associates are “significantly larger than planned because the acceptance rate of our offers increased the size of those classes well beyond our expectations,” Cravath said in the memo, according to the Bloomberg account. At the same time, fewer associates already employed by the firm are leaving.
“While the firm’s level of work is at or near its level before the continuing economic decline, there are many more associates at the firm today than our plans anticipated,” the memo said.
Partner profits at Cravath dropped 24 percent last year, but it is still the nation’s fifth most profitable law firm. Unlike many other large law firms, it has not laid off any lawyers.
The Wall Street Journal Law Blog also covered the deferral offer.
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