Work or Take $100K to Wait? Cooley Associates Face Tough Choice

Cooley’s offer to pay incoming first-year corporate associates $100,000 to defer start dates for a year presents an interesting quandary for them—take the money, or work in a different practice group come January.

What should they do? The differing opinions Cooley associates receive—should they ask for them—will leave them feeling as stumped as the toughest question they faced in their bar exam.

Associates should accept the offer to defer, as they now lack leverage over their careers as newly minted law school graduates and soon-to-be-lawyers, said Katherine Loanzon, managing director of Kinney Recruiting. “The current market conditions, unfortunately, don’t give them many choices,” she said.

Associates should consider transitioning to a different practice area or explore alternative opportunities, such as clerkships or in-house roles, said Summer Eberhard, a partner at recruiter Major, Lindsey & Africa. “The importance of starting work sooner rather than later may be worth the effort,” she said.

The differing opinions underscore the challenge Cooley associates face in making up their minds—and the sense of paralysis that threatens those who don’t see a clear path. “I don’t think there’s a clear answer,” said Stephanie Biderman, also a legal recruiter at Major, Lindsey & Africa.

The start-date deferral is reminiscent for some of the layoffs and hiring shifts during the Great Recession, with announcements about delays now coming from firms tied to the technology industry. In addition to Cooley’s delayed start, Gunderson Dettmer said it would be delaying its first-year class, following layoffs. Fenwick & West said it also will be delaying the start date for its corporate first-years to January 2024.

The good news is that whatever path the Cooley associates choose in response to the options their firm has given them, it will likely work out, said Loanzon, who is based in New York.

“This hiccup so early on in their careers will pass,” she said. “In the long tenure of their legal careers, this will be a blip in their story.”

Cooley Options

Cooley this week contacted what the firm called a “limited number” of incoming corporate associates and offered them the option of a voluntary deferral to join Cooley with the class of 2024 and be paid a $100,000 stipend, the firm said in a statement. First-years that opt for deferral are allowed to work and volunteer elsewhere—they would just need to clear conflicts before they start, Cooley said.

Cooley also told some of them they may be reassigned to other practices when they start in January 2024, the law firm said. Cooley said the group is being given the opportunity to “rank order” their preferred alternate areas of practice.

The firm’s move isn’t that surprising, said Joel Bronstein, managing director of Astor Professional Search in Chicago.

“The corporate markets in general continue to be pretty down and slow across the board through this year,” Bronstein said, adding that the trend is “probably pushing through parts of 2024.”

Cooley’s decision isn’t novel; it mirrors hiring decisions many law firms made during the Great Recession.

“Not only did the employment rate for new graduates plummet overall, but also the rate of employment in bar passage required jobs and in private practice specifically,” said Nikia Gray, executive director of the National Association for Law Placement. There was also a dramatic rise in the percentage of employed students working in temporary or part-time positions, she said in an email.

In determining their next move, Cooley’s incoming associates must look at their long-term goals, whether that be a determination about a desired practice area or other financial aspects of the deal, Biderman said.

They can take the opportunity to build their legal knowledge and tool-kit through continuing legal education courses, becoming involved in bar association activities, and networking with other attorneys in practice areas they are interested in pursuing, Loanzon said.

“On the bright side, Cooley is acting in good faith by helping the associates offset the cost of living expenses brought on by the one-year deferment,” she said.

Experiences Align

While there may be a financial benefit in delaying their start date, it is essential for the recent graduates to consider the other side of the coin, Eberhard said. Postponing the beginning of their career by a year will shift their class year throughout their professional career, and class year is often the focus of law firms when they bring on lateral associates, she said in an email.

“Even if a firm maintains the attorney’s class year for compensation purposes after the delay, their experience will not align with that of their peers at other firms,” she said.

Shifting to a different practice area will allow them to begin working and gain valuable experience, and if the associate wants to do corporate work, they could join a team that is adjacent to that practice with the hope of pivoting when transactional work normalizes, Eberhard said.

The pivot-practice option that Cooley is offering its now-delayed associates could be an ideal option for a young attorney who isn’t sold on working in a corporate practice group, Bronstein said.

It’s also a good way for Cooley to keep its associates and not ruin its own reputation, as a firm that rescinds job offers outright could paint a red flag onto itself that scares future hires, he said.

Law firms are being much more judicious in their reactions to today’s market turmoil than they were in the Great Recession, Gray said.

In 2009 and 2010, firms pulled back on hiring recent graduates completely, which turned into a lack of talent and capacity a few years later, she said. “It seems firms learned their lesson from that,” Gray said.

Every firm is going through their own analysis and many are holding off any major personnel decisions for as long as they can to see if deal work comes back. If it does rebound quickly, they don’t want to be short staffed, Biderman said.