What is a better bet?

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TheZoid
Posts: 417
Joined: Mon Jun 27, 2011 11:07 pm

What is a better bet?

Postby TheZoid » Wed Aug 03, 2011 4:23 pm

Assuming you go to a T-14 and have the option of both, what is a better bet, financially, BigLaw or LRAP. I guess the obvious answer is how many years do you stay in BigLaw for. Assuming you make it four years and burn out, it sounds like you generally have to take a pretty substantial pay cut after that point. Is it a better bet to get a government job, get good work experience and use LRAP, then try to make the big bucks putting your experience to good use?

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rayiner
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Re: What is a better bet?

Postby rayiner » Wed Aug 03, 2011 4:29 pm

TheZoid wrote:Assuming you go to a T-14 and have the option of both, what is a better bet, financially, BigLaw or LRAP. I guess the obvious answer is how many years do you stay in BigLaw for. Assuming you make it four years and burn out, it sounds like you generally have to take a pretty substantial pay cut after that point. Is it a better bet to get a government job, get good work experience and use LRAP, then try to make the big bucks putting your experience to good use?


What metric are you trying to optimize? If you're trying to maximize income, biglaw is the better option. Lots of people do take big pay cuts after leaving big law, but a lot of people don't. And after several years those salaries go back up. In-house salaries, with 4-6 years of experience, in a major metro like NYC or Chicago are well over $200k at the 75th percentile (according to a Robert Half report). Federal salaries are pretty much capped at $160k except in certain very high executive positions, and even then they're below $200k. Over the course of a 40 year career the increased earnings will dwarf getting your loans paid off.

TheZoid
Posts: 417
Joined: Mon Jun 27, 2011 11:07 pm

Re: What is a better bet?

Postby TheZoid » Wed Aug 03, 2011 4:41 pm

rayiner wrote:
TheZoid wrote:Assuming you go to a T-14 and have the option of both, what is a better bet, financially, BigLaw or LRAP. I guess the obvious answer is how many years do you stay in BigLaw for. Assuming you make it four years and burn out, it sounds like you generally have to take a pretty substantial pay cut after that point. Is it a better bet to get a government job, get good work experience and use LRAP, then try to make the big bucks putting your experience to good use?


What metric are you trying to optimize? If you're trying to maximize income, biglaw is the better option. Lots of people do take big pay cuts after leaving big law, but a lot of people don't. And after several years those salaries go back up. In-house salaries, with 4-6 years of experience, in a major metro like NYC or Chicago are well over $200k at the 75th percentile (according to a Robert Half report). Federal salaries are pretty much capped at $160k except in certain very high executive positions, and even then they're below $200k. Over the course of a 40 year career the increased earnings will dwarf getting your loans paid off.


thanks rayiner. I was basically asking just from a financial standpoint. I kind of figured BigLaw would be the answer. I wonder, if you consider quality of life factors associated with BigLaw, how this debate plays out. But, I was wondering really strictly from an income perspective. Thanks for the response though.

TooOld4This
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Re: What is a better bet?

Postby TooOld4This » Wed Aug 03, 2011 4:49 pm

Easily BigLaw.

You can choose to live on a very tight budget while you are working and maximize your savings. With LRAP, generally you are maxed out in what you get to take home. A salary increase will lead to an increase in loan payments. You are locked into the LRAP period before your income is really your own. Getting married will also often upset your financial apple cart, if that is in the card for you over the next decade.

Anonymous User
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Re: What is a better bet?

Postby Anonymous User » Wed Aug 03, 2011 4:57 pm

Biglaw may not be the best option for maximizing income depending on what you're intersted in and what you can get. For example if you go DOJ or SEC your salary will jump up to 120K within a year and a half. However, you will still qualify for IBR and PLSF, and at least for part of that time most LRAPs will cover you (up until you cross the 75K threshold). Plus DOJ has their own LRAP that applies regardless of salary (pays up to 60K toward loans). If you go that route you substantially increase your odds of becoming a partner in biglaw. After a certain number of years working for DOJ some law firm will take you on as a partner in their White Collar/Investigations practice group--at which point your salary will dwarf that of an in house counsel lawyer.

And ironically enough, depending on how long you stay government before switching to a firm, you may end up with zero debt because of your school's LRAP, DOJ LRAP, and/or PLSF. Frankly, if you have the option of biglaw or top fed gov, I would take top fed government regardless of debt--maybe even moreso if you have big debt.

TheZoid
Posts: 417
Joined: Mon Jun 27, 2011 11:07 pm

Re: What is a better bet?

Postby TheZoid » Thu Aug 04, 2011 12:25 pm

Anonymous User wrote:Biglaw may not be the best option for maximizing income depending on what you're intersted in and what you can get. For example if you go DOJ or SEC your salary will jump up to 120K within a year and a half. However, you will still qualify for IBR and PLSF, and at least for part of that time most LRAPs will cover you (up until you cross the 75K threshold). Plus DOJ has their own LRAP that applies regardless of salary (pays up to 60K toward loans). If you go that route you substantially increase your odds of becoming a partner in biglaw. After a certain number of years working for DOJ some law firm will take you on as a partner in their White Collar/Investigations practice group--at which point your salary will dwarf that of an in house counsel lawyer.

And ironically enough, depending on how long you stay government before switching to a firm, you may end up with zero debt because of your school's LRAP, DOJ LRAP, and/or PLSF. Frankly, if you have the option of biglaw or top fed gov, I would take top fed government regardless of debt--maybe even moreso if you have big debt.


That's interesting. Seems to make sense. Would this be DOJ in D.C. or do the local branches work as well?




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