Why the obsession with exit options? Forum

[swc65]

in response to the "up and out" point made above, where/how can one figure out what a firm's specific policy on this is. i'm considering two offers and whether a firm kicks you out after 5 years or lets you stay for longer is important to me. aside from talking with people at post-offer visits, how can i find this out? is this info typically available on the firm's website? nalp? help?

Ask. Ask partners. Ask associates. You should be able to get a rough idea of what the actual policy is. though in 7-10 years when it will actually be relevant for you, it might be completely different.

[meshtdagn]

Whether you make partner is a lot less in your control than people would like to believe. Politics plays a huge part. The economy plays a huge part. Movement of partners plays a huge part. You cannot control any of these issues as a junior (or even senior) associate.

This is especially true at big firms. At these firms, you don't become partner by "building a book." Associates by and large can't land the sorts of big clients that these firms take on. Business is brought in largely on the reputation of partners who are experts in their field. At these firms, partnership depends heavily on luck and the ability to manage the firm's existing client relationships. You become partner at Cravath not because you bring in a Google M&A deal, but by handling IBM's M&A work so well that you put yourself in a position to manage that client relationship.

Luck plays a huge role in this process. During the boom, S&C, DPW and STB were promoting more than a dozen partners per year. These past years, it was 4-6 per year. To give an example of what it takes, one partner promoted recently at one of the V5 happened to be handling a particular client relationship in the financial industry when the markets collapsed. Obviously skill played a big part in helping him take advantage of the resulting opportunity, but to some extent the opportunity itself was the result of luck.

Good insight. I've always thought the prospect of building a book as an associate at firm that handles mostly Fortune 500 clients seems pretty dubious.

Welcome to the real world, fellas. Any F500 rising through the ranks will be similar to this. Law firms are not that special. In fact, they are wildly less profitable than most corporations.

[TooOld4This]

Politics is within your control. Not completely of course, but that's what keeps it interesting.

I'm not talking about how you get along with people. You have no control over a change in the managing partner. You have no control over how different branches interact. Or how the firm is going to allocate resources between practice groups. These things can have a substantial effect on your chances for partnership.

The discussion above makes some good points, but too many TLS users throw around exit options without really knowing what they are talking about. Most frequently, they do this to justify picking a higher ranked firm.

This is true. I can probably be more helpful by discussing some of the things to consider. The top three are probably client contact, industry, and practice area.

The more client contact you are able to get, the better your chance to move over to an in house position with a client. It is quite common for an associate to become intimately involved with a client and then be offered an in house position. Ultimately, this is a win-win for everyone. The client gets the services cheaper. The associate gets out of BigLaw (if that is what they wanted). The firm has an "insider" that may shore up their relationship with the firm.

Practice area. The practice area you specialize in will push your exit options strongly in one direction or another. Corporate work has the greatest potential to move in house. The more niche your practice area is, the fewer in-house spots there will be. Litigation exit options are more likely to be government or smaller firms than in house, since most companies do not handle their own litigation. To be sure, there are in house litigators, but options are closer to a niche practice than general corporate. Likewise, regulatory attorneys will see more of a revolving door with government or will seek out larger companies that can carry the overhead of a specialist attorney.

Industry. In addition to looking at practice area, what industry you end up focusing on will also have a substantial impact on your exit options. If you are doing M&A or project finance, but work primarily with energy companies, you are going to be looking at a very different set of exit options than someone who works in the same practice area but handles companies that have significant international exposures.

[Anonymous User]

Politics is within your control. Not completely of course, but that's what keeps it interesting.

I'm not talking about how you get along with people. You have no control over a change in the managing partner. You have no control over how different branches interact. Or how the firm is going to allocate resources between practice groups. These things can have a substantial effect on your chances for partnership.

The discussion above makes some good points, but too many TLS users throw around exit options without really knowing what they are talking about. Most frequently, they do this to justify picking a higher ranked firm.

This is true. I can probably be more helpful by discussing some of the things to consider. The top three are probably client contact, industry, and practice area.

The more client contact you are able to get, the better your chance to move over to an in house position with a client. It is quite common for an associate to become intimately involved with a client and then be offered an in house position. Ultimately, this is a win-win for everyone. The client gets the services cheaper. The associate gets out of BigLaw (if that is what they wanted). The firm has an "insider" that may shore up their relationship with the firm.

Practice area. The practice area you specialize in will push your exit options strongly in one direction or another. Corporate work has the greatest potential to move in house. The more niche your practice area is, the fewer in-house spots there will be. Litigation exit options are more likely to be government or smaller firms than in house, since most companies do not handle their own litigation. To be sure, there are in house litigators, but options are closer to a niche practice than general corporate. Likewise, regulatory attorneys will see more of a revolving door with government or will seek out larger companies that can carry the overhead of a specialist attorney.

Industry. In addition to looking at practice area, what industry you end up focusing on will also have a substantial impact on your exit options. If you are doing M&A or project finance, but work primarily with energy companies, you are going to be looking at a very different set of exit options than someone who works in the same practice area but handles companies that have significant international exposures.

OP Here -- Fantastic response, thank you.

[Bronte]

Whether you make partner is a lot less in your control than people would like to believe. Politics plays a huge part. The economy plays a huge part. Movement of partners plays a huge part. You cannot control any of these issues as a junior (or even senior) associate.

This is especially true at big firms. At these firms, you don't become partner by "building a book." Associates by and large can't land the sorts of big clients that these firms take on. Business is brought in largely on the reputation of partners who are experts in their field. At these firms, partnership depends heavily on luck and the ability to manage the firm's existing client relationships. You become partner at Cravath not because you bring in a Google M&A deal, but by handling IBM's M&A work so well that you put yourself in a position to manage that client relationship.

Luck plays a huge role in this process. During the boom, S&C, DPW and STB were promoting more than a dozen partners per year. These past years, it was 4-6 per year. To give an example of what it takes, one partner promoted recently at one of the V5 happened to be handling a particular client relationship in the financial industry when the markets collapsed. Obviously skill played a big part in helping him take advantage of the resulting opportunity, but to some extent the opportunity itself was the result of luck.

Good insight. I've always thought the prospect of building a book as an associate at firm that handles mostly Fortune 500 clients seems pretty dubious.

Welcome to the real world, fellas. Any F500 rising through the ranks will be similar to this. Law firms are not that special. In fact, they are wildly less profitable than most corporations.

This statement is completely unresponsive to the quoted posts, and the parts of it that are coherent don't make sense.

[rayiner]

Welcome to the real world, fellas. Any F500 rising through the ranks will be similar to this. Law firms are not that special. In fact, they are wildly less profitable than most corporations.

Even the biggest law firms are very small compared to most corporations. They have very high profit margins, however (40-50%).

[Cavalier]

...

[Anonymous User]

Making partner doesn't require more than 65 hours a week if you bring in lots of business (though you usually can't bill for the time you spend on this). Most firms have a sliding scale - the more hours billed, the less business development you need to have done and vice versa.

*walks into room of partners*

"Hey guys, I just brought in KKR and Exxon Mobile"

*makes partner*

exxon mobil would be a little more impressive

[quakeroats]

Making partner doesn't require more than 65 hours a week if you bring in lots of business (though you usually can't bill for the time you spend on this). Most firms have a sliding scale - the more hours billed, the less business development you need to have done and vice versa.

*walks into room of partners*

"Hey guys, I just brought in KKR and Exxon Mobile"

*makes partner*

exxon mobil would be a little more impressive

Spelling burn.

[Renzo]

Making partner doesn't require more than 65 hours a week if you bring in lots of business (though you usually can't bill for the time you spend on this). Most firms have a sliding scale - the more hours billed, the less business development you need to have done and vice versa.

*walks into room of partners*

"Hey guys, I just brought in KKR and Exxon Mobile"

*makes partner*

exxon mobil would be a little more impressive

Spelling burn.

No, you misunderstood. After the ATT/Verizon merger fails, Exxon is going to merge with both to form Exxon Mobile. It's going to be huge.

[minnbills]

No, you misunderstood. After the ATT/Verizon merger fails, Exxon is going to merge with both to form Exxon Mobile. It's going to be huge.

That's got a great ring to it

[Cavalier]

...

[minnbills]

Look, I was referring to Exxon's Alabama office, OK. Seriously though, big law firms do work for large, institutional clients that often use the services of several Vault firms. As you rise in seniority you'll (hopefully) have the opportunity to develop good relations with the in-house people you work with, but you won't simply bring in these types of clients from out of nowhere. "Bringing in business" is thrown around a lot here by people who I suspect have no idea how things work.

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