Extra Layoff Pain for Thacher 1st-Years: Bank Wants Firm Bar Loans Repaid
At many major law firms, new associates get a stipend or a loan to cover their expenses while studying for the bar exam over the summer. At those that treat the money as a loan, it is generally considered a salary advance that first-years pay back over time after they begin work.
But when Thacher Proffitt & Wood imploded late last year, first-years who had accepted the loans of $10,000 or so hadn’t worked there long enough to repay the money, reports the Legal Times in an article reprinted by the National Law Journal. Now the bank that funded the firm’s operations and the committee handling its dissolution are seeking full reimbursement.
It isn’t clear what collection measures will be attempted, if laid off lawyers aren’t able to repay, the legal publication writes. Meanwhile, because some Thacher partners stopped sending out bills to clients in the final months before the firm collapsed, the committee is seeking to collect on that front, too.
At other firms where laid-off lawyers hadn’t fully repaid money advanced for bar study, loans have been forgiven. “It’s a foolish thing to spend resources on going after people who probably don’t have a lot of money to begin with,” says Peter Benvenutti, a member of the dissolution committee for Heller Ehrman.
Updated at 3:45 p.m. on March 9 to specify reprint information.
