As reported in the April 13 edition of The New York Times, Skadden’s Sidebar program certainly is a  laudable, and by law firm standards, compassionate, response to the problems of a decimated profession, especially when contrasted with firms trying (and failing) to save face with stealth layoffs.  Skadden has come up with a creative and constructive way of cutting costs, boosting morale, and fostering its long standing commitment to pro bono and public interest representation.

According to the Times and firm memos published in Above the Law, Skadden’s Sidebar program permits, indeed encourages, its associates to take a year’s leave of absence at one third pay, no strings attached, with a promise of reemployment at the end of the year. The program had attracted 125 expressions of interest, greater than expected, by April 10.  Are the 125 prospective Sidebars simply going off on a frolic and detour at Skadden’s expense, or is it the “option to return to the Firm at the end of that period” promised by Skadden’s memo, that is behind the high expression of interest?  
Whatever the reason, Skadden associates must weigh carefully the costs and benefits of taking the Sidebar.  The New York Times article of April 13 marveled that only corporate lawyers could be surprised that a program that pays their employees more than most Americans earn to do anything they want for a year was oversubscribed.  Consider, however:

•    One associate who called me for counseling figured that the promise of a job at the end of a year was a better career move than staying at Skadden and risking being laid off if business does not pick up.  This raises the question of whether the option to return, however well intentioned, binds Skadden to reemploy the Sidebars. Must Skadden take the Sidebars back even if it means replacing associates who stayed during the year, albeit at no financial sacrifice? This is not a question of good faith but of business reality.  Even when the economy revives and the banks turn on the spigots again using their own money, the deluge will fall on a changed and perhaps chastened profession.  The consequences for Biglaw remain to be seen. Clients will likely remain vigilant in overseeing fees; lockstep compensation for associates and even the billable hour may go the way of the dinosaur.

•    As a practical matter, Skadden can only make good on its promise of reemployment at the Associate’s option if it has the business to keep the Sidebars occupied at full freight or it lays off lawyers who stayed the year in order to make room for the returning associates.  In addition to the obvious, viz., that nobody knows what the market for top tier corporate legal will be in a year’s time, there are several considerations in deciding whether to take the Sidebar. My discussions with Skadden associates reveal that the lawyers accepting the Sidebar tend to be from practice groups that are slow such as Mergers and Acquisitions, Corporate Finance and Banking.  There are not many securities litigators or bankruptcy lawyers eager to take a pay cut and lose a year of seniority. A Sidebar also has to face the loss of a year’s seniority whether she returns to Skadden or reenters the job market after the Sidebar.

•    The Sidebar may effectively, though unintentionally, discriminate against associates with families or other financial obligations that make the two-thirds cut too costly.  While the Times featured the fortunate Ms. Eisenlord who plans a year of whirlwind travel and good works, we do not know how many of her envious colleagues are not in a position to accept the deal even if they are so inclined.  One single, first year single associate told me that the tempting prospect of having a year to retrench would require him to leave Manhattan, not one of the world’s top 10,000 problems certainly, but an important personal consideration for the lawyer. The lawyers who stay reluctantly for personal or financial reasons, along with their colleagues who want to remain in Times Square, may be putting themselves at greater risk should the firm need to lay off associates.  

•    The partners’ surprise becomes more understandable when one considers the career paths and sacrifices that Biglaw, and especially Skadden, partners choose. Top tier corporate attorneys do not work or live like most people; working extraordinary hours under high pressure, big firm lawyers live in a different financial dimension because they work in a different economic dimension.  A more appropriate view of the choice facing Skadden’s associates as compared to the average worker would be the anxiety of an auto mechanic in Michigan whose boss tells her that, because of the recession,  she can take a year off at one-third pay and come back to work in a year. Even in the unlikely event that the mechanic can afford the pay cut, how secure can she be about her reemployment prospects which, after all, depend on the economy, not her employer’s good faith?

No doubt it’s great to have the chance to make the decision whether to take the Sidebar; but when you think about it, Skadden is not offering its associates a paid frolic and detour so much as a significant and difficult career decision.
© 2009 David Bargman
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David Bargman is an attorney and President of Baum, Stevens Recruiting