Comments on: Why decline $80,000 for doing nothing? http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: vk9141 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10126 Thu, 17 Dec 2009 09:11:47 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10126 …the Prisoner’s dilemma

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By: ZacharyST http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10110 Wed, 16 Dec 2009 20:22:12 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10110 How large is the entering class of associates at Cravanth? If it’s small enough (and since they all went to Yale), I assume they know each other. Assuming they know each other, why can’t they collude to all take the $80k offer? That way, none of them look like they aren’t committed to the firm.

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By: HBC http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10109 Wed, 16 Dec 2009 20:14:59 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10109 I learned this in law school: when an offer’s too good to be true, it probably is.

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By: DanHess http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10104 Wed, 16 Dec 2009 19:32:18 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10104 For many, career success is where they derive their whole sense of self worth. That is undoubtedly doubly true of the incoming class at Cravath.

Should they give up (or postpone) their whole sense of self for a measly eighty grand?

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By: Rockfish http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10101 Wed, 16 Dec 2009 17:44:39 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10101 If it’s the optics, I wonder how many would take the 80k and go to work anyway?

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By: Gaw http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10098 Wed, 16 Dec 2009 12:32:25 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10098 Sublimated puritanism. The need to be seen to be one of the elect.

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By: vk9141 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10097 Wed, 16 Dec 2009 11:10:48 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10097 Good insightful responses so far. As a Brit working for a prominent US financial firm I’ve pondered similar things before.

I think a lot has to be made of how much more asymetric the risk-reward profile is for workers in the US. $80k is ok for a year but with no guarantee after that the fear of losing out and being left with nothing and no safety net must be huge, not to mention the stigma. On the flip side the potential rewards far eclipse those in Europe.

The work ethic still gets me though. What I feel is some US employees overestimate their own contribution, equating effort and output as success. Over here we’re more pragmatic about how much value we each add (or indeed what constitutes value). We can’t, and shouldn’t expect to be, all relentless working high flyers.

Malcolm Gladwell has a good example in his Outliers book of historical attitutes to work in Europe contrasted with the rest of the world. He suggests that to achieve subsistence Asian agriculture meant backbreaking work growing rice, as opposed to European wheat growing that left most of the growing season to do little and then nothing over winter. What it did give was plenty of time for skilled craft, less intesity but more value added.

When I look at some of the ample low grade mass consumer junk on offer in the US (crap cars, fast food, celebrity culture, strip malls etc) I find it interesting that a lot of the quality stuff is from lazy European countries (sports cars, fine cuisine and wine, art and design, designer boutiques etc).

Finally, on current trends of dwindling resources and deteriorating environments there are strong arguments for working smarter not longer.

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By: Future_Lawyer http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10090 Wed, 16 Dec 2009 06:09:49 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10090 Felix,
Less a lack of imagination than a proper use of financial analytics on one’s personal balance sheet:

1) the purely financial aspect
a) Paying of student loans
Many future lawyers have been paying ~45K/year in tuition for the last three years, not including living expenses. For those that have gone straight through from university or spent the time in between in low-paying jobs, there may also be significant debt from undergraduate student loans. Just on the graduate level, you are looking at $135K in loans plus additional living expenses. $80K is a lot, but it certainly doesn’t cover that kind of debt. The Cravath offer, while quite generous, in no way covers all student loans–it may cover a fraction of the monthly interest payment’s for one’s first year out of school.

b) 80K is still 50% of 160K
alternative forms of employment (assuming one desires employment) are hard to come by at the moment. There aren’t all that many jobs available to young graduates with limited work experience paying 80K. If you’re going to be working, might as well be making the full 160K…

2) structure of the legal market
a) Many/most lawyers will not stay in the “BigLaw” system more than 2-3 years.
100-hour work weeks can only be tolerated so long–better to do them younger than older, perhaps. Many lawyers go through a large law firm in a short amount of time so that they can pay off their student loans to then go do “what they really want to do” (whatever that is). Given this limited time frame, it makes sense to get it over with, rather than wait for the inevitable.
There are significant training benefits to working at a firm like Cravath–the sooner you have completed 2-3 years, the sooner you are marketable to other sectors of the legal world. Unfortunately law school does not actually train one to be a lawyer, so this on-the-job training is critical to developing the skills necessary in one’s legal career. Why delay that skill development if you don’t have to?

b) starting later can be detrimental to a woman’s career.
Individuals that choose to have families pick a number of different points to begin them. CW (which certainly doesn’t always hold, and I hope the commentariat will excuse my gross generalizations) holds that it may be held against an individual if they have a child while an associate. Sure, firms will do all they can to appear accommodating, etc; but the truth remains that given a choice between an associate that can be fully productive and one that can only be 80% productive because they are otherwise occupied, the 100% committed associate is preferred. A number of female attorneys fear that it is not ‘safe’ to have a child until they have made partner. Alternatively, they may plan to take time off to have a child at some point within their career, and it is critical to future marketability to have had their ‘BigLaw’ experience prior to starting their family if they want to come back at a seasoned level. That Ms. Wuertzel couldn’t envision this speaks to her choices….

3. The changing environment of law firms
“If they mistrust Cravath that much, they shouldn’t take the job in the first place.” In what industry should one so thoroughly trust one’s employer that any job should be taken for granted or assumed to be there? In finance, offers are rescinded all the time. In journalism, as you well know, magazines go under all the time. No, Cravath will not go under next year, nor the next ten. But the business of law IS changing. The security that lawyers once had as a class is evaporating. The only reason that this option exists–the option to be paid for nothing–is that Cravath partners are taking it on the chin for its associates. They would rather pay them to do something else for a year than tell them there is no job waiting for them.
How many law firms would do this for their incoming associates? Many, like Latham and Watkins, would simply fire more than half their incoming class two months into their tenure. Cravath’s culture won’t allow that kind of restructuring because they refuse to hire lateral attorneys. Therefore, a cut to a particular class reverberates up their staffing pyramid in a way cuts at other firms would not. How sustainable is that model? Lawyers are naturally risk-averse, so I imagine most of the YLS alums that opted against time off do not intend to be the first to find out the answer in the negative.

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By: petewarden http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10089 Wed, 16 Dec 2009 05:54:08 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10089 I’d have to agree with pickandroll’s point, it’s pure signalling.

Almost everyone here in the US seems jealous of the six weeks of annual vacation I had in the UK, but nobody is willing to push their companies for more time off. Why? Because the first people to do so are likely to be labeled as lazy.

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By: pickandroll http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/comment-page-1/#comment-10088 Wed, 16 Dec 2009 05:21:00 +0000 http://blogs.reuters.com/felix-salmon/2009/12/16/why-decline-80000-for-doing-nothing/#comment-10088 Are you being intentionally obtuse? People are turning it down because the don’t want to be branded as un-serious individuals who aren’t cut out for the most demanding assignments and, eventually, partnership. A person who can get a job at Cravath is pretty much guaranteed to be able to make a few hundred grand a year for life, but if they are one of the minority who manage to make partner their earning potential increases by a factor of ten or more.

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