OAKLAND – The law firm lauded by Vault.com for having this year's best summertime legal associate training program and the second-best diversity program in the nation is spearheading a market-leading student loan pay-off program.
Starting next month, San Francisco-based Orrick, Herrington & Sutcliffe LLP – which also ranked 43 overall out of the business data site's top 100 U.S. law firms to work for in 2017 – will offer a loan repayment assistance effort in collaboration with lending and wealth management outfit Social Finance Inc.
The law firm said it will help all first-year associates in the U.S. pay down their educational loans faster by supplementing its loan refinancing program, through which company employees have already saved an estimated $2 million.
The initiative will provide a $100 monthly firm contribution toward a new associate's loan principal, until which time as associate qualifies for his or her first bonus payment – usually after working with the company for about 16 months.
Data published by U.S. News and World Report show that 76 percent of those who graduated this year from Yale University, the top law school in the country, exited the school already with an average debt of $122,796, while 72 percent of all new grads from second-ranked Harvard University's law school owed an estimated $149,754. An estimated 79 percent of law school grads at third-ranked Stanford University owed an average $132,970 by the time they received their degrees.
"In talking with associates about ways we could better support them, law school debt was one theme that came up repeatedly," Orrick Chief Talent Officer Siobhan Handley said in a company release. "The opportunity to make a direct impact through this program, and to be an industry leader, was a no-brainer."
Introducing a loan payoff program is not only a step in the right direction for employee retention, but also for positioning Orrick, which operates 25 offices worldwide, including 10 in the U.S., as a firm responsive to the individual needs and concerns of its team members, not to mention the broader community, David Mitroff, a UC Berkeley business professor and founder of Piedmont Avenue Consulting, which specializes in law firm marketing, told the Northern California Record.
"Right now, when it comes to student loans and student debt, it's a huge popular issue that's being talked about constantly in politics," Mitroff said. "Student loans are getting so much attention, why not throw your hat in the ring and get some of that attention too?"
As a marketing strategy, the loan payoffs would be "good for the firm, good for their new associates," he said, and no doubt positively impact the company's public profile.
Giant consulting firms like Bain, Deloitte and KPMG have been paying for team members MBAs for years.
"It's smart because they'll be getting someone who went to a good school and it's smart because they'll be getting people that aren't going to be stressed or worried about their student loans," Mitroff said.
And, he said, it's smart because a company as a result will be likely be able to keep a talented individual committed to staying on for an extended period of time. He noted that, in today's market, lawyers last a typical three years at one firm before moving on to another.
A company as big as Orrick, which has already been acknowledged for offering improved employee benefits such as extended parental leave periods, is in a prime position to "set the precedent for other firms," he said.
A 2015 study by Deloitte found the so-called Millennial generation – those born between the early 1980s and early 2000s – will comprise about 75 percent of the nation's workforce by 2025 and will less motivated by acquiring money as much as they will by ways to save the earth and contribute to a happier society.
In fact, the survey said more than 50 percent of the 7,800 participants asked would gladly take a pay cut to find work that matches their values and 90 percent sought to use their skills for good.
The research also discovered that while 75 percent of Millennials fault businesses for being so focused on their own agendas rather than improving society, only 28 percent believe their current organizations are making full use of their skills.
In other words, Orrick, the only law firm ranked in Fortune's 2016 list of "100 Best Workplaces for Millennials," and other like firms should never lose sight of the great potential for building a sense of greater goodwill and loyalty offered in a company's effort to enrich and help advance the careers of those already in its ranks, along with making the world a better place to live.
"I went to law school and then you call me up and say, 'Hey, we'll pay for your law school,' that's going to make me committed to you and that's going to make me stay there longer," Mitroff said as an example.
But, it could also encourage an inflated sense of self-importance, said Mitroff
"I don't think the loyalty's going to be as high," he said.
"Let's say you're at Orrick as a legal assistant, and you've been there for five years and they say: 'You know what? You're a really good legal assistant and we're going to pay for you to go to law school,'" and then provide chances to gain further training, offer pro bono work and other services in the community, he said.
"That, to me," Mitroff said, "is like – 'Holy crap, I will never leave this place, ever.'"