Imagine this scenario: you just got laid off from your plumb job as an associate at a prestigious law firm and are then told that you have to pay back the "loan" the firm extended you for bar and startup expenses when you were hired. Such is the case for first year associates released at the dissolving firm Thacher Proffitt & Wood. See the article at Law.com (http://www.law.com/jsp/article.jsp?id=1202428882810&rss=newswire).
These sorts of new associate loans are not unusual. Some firms require their associates to pay back these loans over time while other firms have been known to forgive the loan over a period of years as long as the associate stays with the firm. What is a little unusual in this case, and to add insult to injury, is that the firm and its bank are pursuing the associates who have not paid back these loans after being fired. The Law.com article notes that some other firms and/or their banks are deciding to write off these loans. In the view of one firm, there's not much sense pursuing associates who don't have much money to begin with. Of course, a loan is a loan. If the money is owed, while it's not the greatest PR move (what do they care though, if the firm has gone under?) it's not all that unreasonable for the firm or its bank to expect to be paid back.
What's the lesson here? Whether you are a lateral or brand new associate, pay attention to the compensation package being offered to you. Over the last several years before the economy tanked, much was made of comparing initial starting salary numbers (which occasionally took into account these "loans") and firms struggling to match the highest bidders for new grads, but it pays to take a close look at the whole package including a firm's 401K plan, the health insurance offered to the firm's employees, and other perks such as subsidized parking, bar dues and CLE expenses, etc. Just like the market gurus say, your career too is a long term investment and should be treated as such.