Monday, April 13, 2009

I Wish They'd Pay Me Not to Work!

I'm sure this article will inspire much jealousy:

$80,000 for a Year Off? She’ll Take It!

The law firm Skadden, Arps, Slate, Meagher & Flom has offered all its associates the option of accepting 1/3 of their base pay to not work for a year. They're encouraging the associates to do pro-bono work and trying to help them find projects, but there are no strings attached-- the lawyers who take this deal can sit around twiddling their thumbs for a year if they are so inclined.

Would I take $80,000 for a year off? Hell yeah! But $80,000 is a lot more than 1/3 of my salary. At 1/3 of MY salary, which would be $31,000, I'd have to dip into savings or take a part time job in order to feel comfortable about making ends meet. Suddenly the big neon sign blinking "FUN" isn't looking quite so bright!

I would imagine that many of these lawyers face a similar dilemma-- $80,000 is a lot of money, but if you've built your life around a $240,000 salary plus a bonus, and if you're still repaying law school loans, you might not be prepared to make the necessary adjustments to your lifestyle. I'd like to think that if I had become a lawyer, I would be one of the few smart ones who lived simply, repaid her debts and saved a lot of money, instead of splurging on luxuries... but I'm not sure I would have been able to do it! Peer pressure is a powerful thing-- whether or not your peers are actually pressuring you or judging you, it's hard not to want to enjoy a similar lifestyle to those around you.

In any case, I doubt I'll have to worry about making this sort of decision. These offers don't happen in in my profession very often. I remember when Random House offered its employees some sort of sabbatical program, but I don't think you were paid if you took time off-- keeping one's benefits and being able to return to one's job were considered good enough, I guess!

Would you take a year off if given the opportunity? How much money would you be willing to give up?

18 comments:

Anne Mobilityscooter said...

This for me is worthy of my grasp. I will definitely accept and in between do business so as not to loose it in a snap.

guinness416 said...

I know someone who was offered this, but for much less money. It was $10,000 to take a year off and $20,000 for two if I remember correctly. The only strings attached were that he couldn't work for a competitor.

I would definitely take 1/3 of my salary to do this. In a heartbeat. I can imagine that others would want the fact of the job still being there after a year in black and white and cast iron. Can you be laid off during your "year off" if the company slides further downhill?

lazybride said...

Did you see this? http://nymag.com/daily/intel/2009/04/skadden_arps.html

It mirrors my reaction. As a former Skadden legal assistant who got paid 35K a year 4 years ago...I just wish I never read the article.

MB said...

I would definitely be running some heavy numbers to see if we could do it. I know we could do it on half my husband's salary (I'm a SAHM), but not sure about 1/3, but I bet we could make it work if we thought about it. I would be looking at home exchanges in other countries, renting my house out while I traveled, everything. Maybe travel half the year, work part time the other half. It's definitely not an opportunity that comes around often, which I imagine is why so many jumped at it. I'm definitely jealous!

Anonymous said...

I'm a lawyer, and I'd take this in a heartbeat (having paid off all my loans about 5 years out of law school). I can't believe the number of associates who have already said yes to the program is so low -- 125 out of 1300?

Shuchong said...

Here's the kicker: tuition and living expenses at some top law schools next year exceed $68,000. So students could conceivably be coming out of school with over $204,000 of debt (and that's assuming no debt accrued over those three years!). Assume a 10 year repayment plan, an 8% interest rate (reasonable, since grad plus loans from the feds are a fixed 8.5%), and 1% in loan fees. That gives you $2,500 per month in loan payments. So $80,000 has quickly become $50,000. I'd still take it, but I see why some people might be reluctant to.

Adrienne said...

I didn't read fully so I don't know if it answered this but my biggest question would be about benefits, specifically health insurance. If I could hold onto that AND get 1/3 of my current salary, with the assurance that I would be coming back after a year...hell yes!

Mike said...

This one is really making the rounds! I happened to just write my own little post about this when I saw yours.

I think it'd be difficult for me to make the same decision if I were in her shoes, as it would be dependent on student loans, mortgage payments, future job security, etc.

However, it's more that this sort of thing even happens in our world that I find distressing. I mean, really, how is this even a plausible option for Skadden to offer? It's mind-boggling.

Miss M said...

I'd have trouble living on 1/3 of my current salary, the mortgage adds up to just about that per year. Definitely makes me wish I had that paid off! Of course I'd take the year off for $80k, but couldn't if we were talking 1/3 of my current salary.

Anonymous said...

The first law firm to do this was McKee Nelson in November 2007. They offered full bonus for 2007 and 40% pay for one year's sabbatical, but didn't guarantee jobs after that year. You can guess that in November 2008, those who took sabbaticals didn't have jobs to come back to.

But the economy might actually be picking up in spring 2010 and I really wish I had this option. I'm one of the few who could actually afford it - paid off law school loans, has working spouse, no mortgage. Unfortunately I've been laid off from my firm and will be lucky to find a job that pays 80,000 annually.

MEG said...

I would take a year off with NO pay if given the option. I would travel and spend up my savings and live it up and explore other jobs (maybe) and write and travel some more! How often do you get that chance? Young people often quit their jobs to do exactly that with no financial incentive whatsoever. Bring it on!

frugal zeitgeist said...

I decided a while ago that if my job goes poof, I *am* taking a year off. I have enough cash saved up to cover all my expenses for a couple of years without tapping my investments if it comes to it.

Hot Money Mess said...

Wow, I would take it for sure...but then again, I write a blog about all my poor financial decisions ;)

I guess it would all depend on my circumstances. At this point, I don't have much to lose so I would do it.

I can't imagine having $200,000 school debt. I know it's worth it...I just can't fathom having that hanging over me though. I would feel so tied down.

Aspiration's Purse said...

OO. I could not live on a third of my salary. That would land me in a McDonald's or something.

Anonymous said...

You can't focus on the money, taking a year off is not the way to signal you're valuable to the company. The whole reason to work as slave out of law school is to make partner.

Anonymous said...

One of my bf's close friends works for this firm and turned down the deal. My bf says he would have taken it, but I can see the reasons not to.

Yes, health insurance was provided, and they pay your school loans for the year too, but for people who have allowed their standard of living to rise to meet their high salary losing 66% of their salary would be huge.

This firm is based out of NY and as we learned with the $500,000 bailout salary controversy $80,000 really doesn't go as far as we all might think...

any the bf and I have debated this since the day the offer was made...interesting.

Lisa said...

I've heard of this too. My sister is in law school and a friend of hers who had a job offer lined up after graduation got offered 60k to defer their job for a year (no strings) or delay starting for 6months and get paid the full 160k they were offered.

Even with student loans to consider- I'd totally take the extra year- find another job (anything) or just live cheap and enjoy life.

tired of working said...

I couldn't live on 1/3 of my salary, but I can see a young adult still living at home taking this year and, say, going back to school. I realize this was a law firm, but I was thinking of a more general situation.

Or someone with kids and a working spouse taking the year to spend some time as a stay-at-home parent.