Huge pay cut to go in-house Forum

[Anonymous User]

Would you take a huge pay cut to go from big law to in-house?

I'm currently a 7th year associate at a vault-ranked law firm in California making $300,000 a year plus potential $100,000 bonus if I make my hours (I've received a bonus every single year of working). Since I've been there for so long, I can pretty much come and go as I please as long I'm billing. So hours are very flexible including working from home once or twice a week. Love my colleagues and I'm on partnership track. But I work pretty darn hard (come home by 8 pm most nights; and 2-3 times a week I work at night from 9 pm to 1 or 2 am; sometimes weekends but that's more rare).

I recently got an offer to go in-house at a tech company. Base is $200,000 plus 20% bonus, but no stock or other long term incentives, yet. So I'm looking at potentially a pay-cut of $150,000 give or take (I'm factoring in better benefits at in-house job plus 401k match). Supposedly hours at new in-house job is 9:30-5:30 and no nights or weekends. So more time to spend with my kids.

Would you take the in-house position if you were me? Need to make a decision soon and I'm conflicted.

[sayan]

Yes. There are certain essential things money can't buy. Missed time away from raising your kid while slaving away at the office until 10-11pm is one of them.

Second, you probably make around $260kish post tax from big law and around $170k post tax from the other gig. But you probably work ~2600 hours total (assuming normal billing efficiency of around 75% conversion and 2000 hours billed) in big law and 40*48 = ~1900 hours at the other gig.

So the actual hourly rate is ~$100/hr at biglaw and ~$110/hr in the easy gig. And that doesn't consider the fact that those 700 extra hours are much more painful than the first 1900. That's why overtime rates exist for saner jobs; to compensate for that additional stress and loss of normal personal life. And then there is the qualitative difference in terms of each of the first 1900 hours worked (stressful biglaw vs. chill in-house).

The choice is obvious, so long as your lifestyle can bear the ~90-100k drop. But honestly, even if it can't, you can always downsize a bit. A nicer car or bigger house isn't what will matter to you in 15-20 years anyways; it's knowing that you were there to raise your kid right and provide him with the right opportunities to succeed.

Plus, you'll be kicked out in a year or 2 anyways, so unless you foresee a better opportunity coming up, might as well get a head start on that hourly pay raise. The math backs it up.

[Anonymous User]

Yes. There are certain essential things money can't buy. Missed time away from raising your kid while slaving away at the office until 10-11pm is one of them.

Second, you probably make around $260kish post tax from big law and around $170k post tax from the other gig. But you probably work ~2600 hours total (assuming normal billing efficiency of around 75% conversion and 2000 hours billed) in big law and 40*48 = ~1900 hours at the other gig.

So the actual hourly rate is ~$100/hr at biglaw and ~$110/hr in the easy gig. And that doesn't consider the fact that those 700 extra hours are much more painful than the first 1900. That's why overtime rates exist for saner jobs; to compensate for that additional stress and loss of normal personal life.

The choice is obvious, so long as your lifestyle can bear the ~90-100k drop. And honestly, a nicer car or bigger house isn't what will matter to you in 15-20 years anyways; it's knowing that you were there to raise your kid right and live a good life.

Plus, you'll be kicked out in a year or 2 anyways, so unless you foresee a better opportunity coming up, might as well get a head start on that hourly pay raise. The math backs it up.

THIS is why I post on TLS. Thank you (for your sage advice).

[Anonymous User]

Yes; if you can afford it, it's worth it. I just took a large pay cut (of over 60%) to work for government. I love the new job and work way less. The extra happiness you get from leaving at 5:30 or 6 and not doing work on weekends is nearly immeasurable.

[Hutz_and_Goodman]

Sounds like a great job. If I were in your shoes I think I would take it.

[Anonymous User]

It sounds like you really like your firm. I would not leave. I understand you are partnership track but that may not be for you. What about going of counsel and billing 1500 or so hours a year for a slightly reduced salary?

I think you are ignoring that you have built up quite a reputation over these 7 years and would be throwing it away. Why not try come up with an alternative work schedule? If you are on the partnership track, most firms would be more than happy to keep you at reduced hours at counsel.

Plenty of people have done this. You just gotta talk to management.

[dixiecupdrinking]

I don't think you can think about it as a paycut if you ever plan to leave biglaw. You're not likely to find any other job that pays you $400k. I think the decision process has to be (1) do you want to leave, (2) is this the right job to leave for, and (3) are you happy with the compensation, objectively, not relative to what you're currently making.

[dixiecupdrinking]

It sounds like you really like your firm. I would not leave. I understand you are partnership track but that may not be for you. What about going of counsel and billing 1500 or so hours a year for a slightly reduced salary?

I think you are ignoring that you have built up quite a reputation over these 7 years and would be throwing it away. Why not try come up with an alternative work schedule? If you are on the partnership track, most firms would be more than happy to keep you at reduced hours at counsel.

Plenty of people have done this. You just gotta talk to management.

I don't think it's remotely realistic to bill 1500 hours as of counsel.

[gaddockteeg]

Yes. There are certain essential things money can't buy. Missed time away from raising your kid while slaving away at the office until 10-11pm is one of them.

Second, you probably make around $260kish post tax from big law and around $170k post tax from the other gig. But you probably work ~2600 hours total (assuming normal billing efficiency of around 75% conversion and 2000 hours billed) in big law and 40*48 = ~1900 hours at the other gig.

So the actual hourly rate is ~$100/hr at biglaw and ~$110/hr in the easy gig. And that doesn't consider the fact that those 700 extra hours are much more painful than the first 1900. That's why overtime rates exist for saner jobs; to compensate for that additional stress and loss of normal personal life. And then there is the qualitative difference in terms of each of the first 1900 hours worked (stressful biglaw vs. chill in-house).

The choice is obvious, so long as your lifestyle can bear the ~90-100k drop. But honestly, even if it can't, you can always downsize a bit. A nicer car or bigger house isn't what will matter to you in 15-20 years anyways; it's knowing that you were there to raise your kid right and provide him with the right opportunities to succeed.

Plus, you'll be kicked out in a year or 2 anyways, so unless you foresee a better opportunity coming up, might as well get a head start on that hourly pay raise. The math backs it up.

This was a great breakdown. I read this thinking he should stay since he's only 1 or 2 years away from partner and he said he was partner track (assuming that means that people havve hinted that he might make the cut) but you convinced me otherwise. difference after tax plus time worked favors going to the tech company.

[kalvano]

It sounds like you really like your firm. I would not leave. I understand you are partnership track but that may not be for you. What about going of counsel and billing 1500 or so hours a year for a slightly reduced salary?

I think you are ignoring that you have built up quite a reputation over these 7 years and would be throwing it away. Why not try come up with an alternative work schedule? If you are on the partnership track, most firms would be more than happy to keep you at reduced hours at counsel.

Plenty of people have done this. You just gotta talk to management.

You aren't throwing away 7 years of built-up reputation. Unless OP's firm is an outlier, most firms like to have their attorneys go in-house because of potential work referrals and building a network away from the firm. It's not as if everyone he worked with is suddenly going to forget him.

Also, the notion that you can take a "slightly reduced" salary and only bill 1500 as of counsel is just silly.

[kalvano]

Also, as a dad, there is virtually no way I would pass up the opportunity you've got. I'm assuming that you have decent savings, savings for kids, and your lifestyle doesn't demand a $400,000 job. Even if it does, that kind of work schedule would be worth it to me to make whatever adjustments were needed to take the new job.

[whysoseriousbiglaw]

I'd rather be a teacher making 60k a year with 3 months off ....so this is a no brainer.

I don't have any money grubbing kids, though.

[Anonymous User]

Thanks all. This is OP. I am leaning towards taking the in-house gig, but the paycut is hard to stomach some nights. I guess I just needed a reality check. And funny that everyone here thinks I'm a guy.

[Anonymous User]

I'd rather be a teacher making 60k a year with 3 months off ....so this is a no brainer.

I don't have any money grubbing kids, though.

Not OP, but that sounds so nice it's unbelievable.. Easy hours, 3 months off during the prime months of the year (SUMMER). What a dream

[whysoseriousbiglaw]

I'd rather be a teacher making 60k a year with 3 months off ....so this is a no brainer.

I don't have any money grubbing kids, though.

Not OP, but that sounds so nice it's unbelievable.. Easy hours, 3 months off during the prime months of the year (SUMMER). What a dream

After a few years, you actually get paid more than that - like over 80k, maybe even 90k depending on the region for 3 summer months off, plus winter break, plus regularish hours.....a lot of places have pensions too. My high school teachers retired after 25 years with pensions worth about 50k a year.

[rpupkin]

It sounds like you really like your firm. I would not leave. I understand you are partnership track but that may not be for you. What about going of counsel and billing 1500 or so hours a year for a slightly reduced salary?

I think you are ignoring that you have built up quite a reputation over these 7 years and would be throwing it away. Why not try come up with an alternative work schedule? If you are on the partnership track, most firms would be more than happy to keep you at reduced hours at counsel.

Plenty of people have done this. You just gotta talk to management.

I don't think it's remotely realistic to bill 1500 hours as of counsel.

At my firm, we have part-time of counsels that (1) make about what OP would make in-house, and (2) definitely bill less than 1500 hours a year. We also have full time of counsels that bill a lot more than 1500 hours and also make a lot more.

The availability of these sorts of arrangements varies from firm to firm. If it possibly interests the OP, I agree with the anon poster that OP should at least ask the firm about it before deciding to leave.

[Anonymous User]

My firm did offer flexible work arrangement and even part-time reduced schedule, but I think it really depends on your practice group. If you do appellate work, a part-time arrangement might work really well because you know when briefs are due. However, if you're a litigator and have a trial, your team will not care if you're only 70%. When depositions need to be taken or motions need to be filed, you'll still need to put in the same # of hours as your team members.

Also, after practicing for seven years at a big law firm, I'm kind of tired of what I'm doing and want new challenges. I guess I'm just surprised that going in-house means such a huge paycut. I always thought (and heard) that the pays are comparable, but I guess that was pre-Cravath pay raise. I just didn't realize how much I'll be giving up in terms of salary.

[ClubberLang]

I'd stay at the firm. The pay gap will be massive when you compare what take home as a partner would be. Also you would be giving up job security, and there is no guarantee the hours are better. Being a partner will mean your kids will have whatever they want and your wife would t have to work. I wouldn't give that up in a hope for better hours, but it is a personal decision.

Also, with tech co, you won't have seniority and are a cost center for the company, so job security would be a very real consideration.

[Abbie Doobie]

I'd stay at the firm. The pay gap will be massive when you compare what take home as a partner would be. Also you would be giving up job security, and there is no guarantee the hours are better. Being a partner will mean your kids will have whatever they want and your wife would t have to work. I wouldn't give that up in a hope for better hours, but it is a personal decision.

Also, with tech co, you won't have seniority and are a cost center for the company, so job security would be a very real consideration.

it's pretty sad that a family can't live in california on a single income of $240k

[star fox]

Heck yeah dude, you're still making a lot of money and can basically just coast with a chill job with chill hours. That's the dream. Once you go in-house, you can always move around companies if need be and get pay raises. If you were starting at a really low salary that'd be problematic but it looks like you'll be starting your in-house career at a good spot which should open up more opportunities down the road.

[NYC2012]

.

[YBF-W]

I'd stay at the firm. The pay gap will be massive when you compare what take home as a partner would be. Also you would be giving up job security, and there is no guarantee the hours are better. Being a partner will mean your kids will have whatever they want and your wife would t have to work. I wouldn't give that up in a hope for better hours, but it is a personal decision.

Also, with tech co, you won't have seniority and are a cost center for the company, so job security would be a very real consideration.

it's pretty sad that a family can't live in california on a single income of $240k

The continued assumption of OP being male is also sad. And that if OP is male, his wife would not be already working??

[Wipfelder]

I wouldn't leave. $200k in CA is basically poverty level when you have kids

God this is such bullshit.

[jrf12886]

Yes. Plain and simple.

[Hikikomorist]

I wouldn't leave. $200k in CA is basically poverty level when you have kids

God this is such bullshit.

How so?