Clerking vs. law firm Forum

[Anonymous User]

Can anyone give input on advantages and disadvantages of clerking first vs. spending a year or two at a law firm first? I have some thoughts but would appreciate others. Thanks.

Assumptions:
1. Full loans from a top law school
2. Top firm job offer
3. Fed. clerkship

[Hutz_and_Goodman]

One advantage is that the firm pays you more money when you return, but a disadvantage is that you lose the time networking within the firm/learning how to practice law.

Another disadvantage is that when you become a 2nd/3rd/4th year, when the firm is looking for associates to cut, sometimes former clerks are more appealing because they being paid more yet don't have more experience at the firm (someone has told me this; correct if wrong).

Having said all this, I think the general wisdom is if you want to do lit it's worth it to take a year or two to get the experience, particularly for some really prestigious district courts (ex. SDNY).

[OneMoreLawHopeful]

I'm in favor of waiting to clerk (it's what I'm doing) for the following reasons:

You may have more options to clerk 2 years out - many judges take the experience as a plus, and you become more competitive as a result. Also, through networking at a firm (assuming it's biglaw) You can usually find some connection to judges that help you secure a position (at least this has been true for friends of mine in ND Cal, which is otherwise very competitive).

As a practical matter, clerking your third year also carries a much higher salary (I believe it's almost 6 figures, something like $96k). The higher salary plus savings from firm work can make your financial situation far more manageable.

Also, clerking can be a great way to transition to a different firm. So, if you work at a firm first, and decide you don't like it, you can then go elsewhere after you clerk. By contrast, if you clerk first, then you might have to stick it out longer before lateraling.

[BigZuck]

0L thread?

OP is too vague IMO, I would think this largely depends on longterm career goals.

[mr.hands]

Clerkship bonuses are nice but overall you still take a pretty big salary hit by clerking

[bk1]

OP, if you're not at a 2L, you're putting the cart way before the horse.

I think the big thing about clerking right out of law school is that most people have more flexibility in choosing where to live at that point. Once you've settled down in a place where you want to be long term, it's much more difficult (or at least more annoying) to pick up for 1 year and then come back. Since many people aren't staying where their law school is, they're already moving after law school anyways which makes it easier to temporarily live in a random place for a year or two.

But this is mostly a moot point. While alums can often have better odds at clerking for most people this really isn't a choice (NDCA, noted above, pretty much only takes alums). If they want to clerk, or they want to clerk in a specific location, they apply as a student and then if they don't get anything they apply to clerk as an alum.

You may have more options to clerk 2 years out - many judges take the experience as a plus, and you become more competitive as a result. Also, through networking at a firm (assuming it's biglaw) You can usually find some connection to judges that help you secure a position (at least this has been true for friends of mine in ND Cal, which is otherwise very competitive).

While it is true that you may have a higher chance at clerking in the place you want to clerk as an alum, but that really isn't a reason to choose to clerk as an alum. In any case, there's no reason you can't apply to clerk right after law school and then apply again to clerk as an alum if you don't get anything the first time.

As a practical matter, clerking your third year also carries a much higher salary (I believe it's almost 6 figures, something like $96k). The higher salary plus savings from firm work can make your financial situation far more manageable.

I mean I guess this is technically true. But most people are living off of less than a clerk's salary while in law school so I don't see why this is necessarily a meaningful advantage.

Also, clerking can be a great way to transition to a different firm. So, if you work at a firm first, and decide you don't like it, you can then go elsewhere after you clerk. By contrast, if you clerk first, then you might have to stick it out longer before lateraling.

I agree that clerking can be a great way to slingshot to something else (whether it be a different firm or some other position). But I think that the lateral market is strong enough that, at least right now, most people can lateral pretty easily. Plus it's a lot easier to choose when you lateral if you're leaving from the firm whereas if you're clerking you have to make sure that things line up specifically with the time when you leave your clerkship (assuming you don't intend to float on making $0 for a few months).

[OneMoreLawHopeful]

While it is true that you may have a higher chance at clerking in the place you want to clerk as an alum, but that really isn't a reason to choose to clerk as an alum. In any case, there's no reason you can't apply to clerk right after law school and then apply again to clerk as an alum if you don't get anything the first time.

You're right in that you shouldn't choose to clerk just because it's easier in some districts once you are an alum.

But on the other hand, if you have chosen to clerk for career advancement purposes (which seems like a common reason), then which judge you clerk for becomes very important, and the boost alums get can be helpful.

I mean I guess this is technically true. But most people are living off of less than a clerk's salary while in law school so I don't see why this is necessarily a meaningful advantage.

It's not about standard of living, it's about your debt. It's unlikely you will be able to handle full-freight debt payments (plus other graduation related one-offs like moving and an apartment deposit) on the straight-out-of-school clerk salary of $60k/year, so many end up deferring or going on PAYE for the duration of the clerkship (usually about 8 months since the first four are still in the post-grad grace period). But, under either option you will owe more at the end than you did at the start.

By contrast, if you work biglaw first, make payments and save money, then when you take the pay cut to $96k in year three you can probably keep making regular payments the whole time, and you'll be out of debt sooner (and pay less overall because there was no period where the interest capitalized).

As for the "strength of the lateral market" I've heard anecdotally that biglaw -> clerkship -> other biglaw is easier than clerkship -> biglaw -> other biglaw, because the former lends itself to the narrative "this person took a step to advance their career," while the later might sound like "this person may not be cut out for firm work." I know it's just anecdotal, so maybe that should be ignored, but I've heard partners at more than one firm mention the candidate that "wants to only be a clerk and doesn't appreciate what firm work entails."

[ClerkAdvisor]

Lolwut? Are these all 2L and 3L responses?? Way easier to clerk first and then go to BigLaw. And the market is tougher for clerks trying to lateral off of clerkships than entry level hiring off clerkships.

[OneMoreLawHopeful]

Lolwut? Are these all 2L and 3L responses?? Way easier to clerk first and then go to BigLaw. And the market is tougher for clerks trying to lateral off of clerkships than entry level hiring off clerkships.

I'm an associate in biglaw, and I promise you that it is often easier to clerk post-biglaw. I have several friends who lacked the grades to get clerkships straight out of law school (as in applied and were turned down), only to get multiple interviews and an offer in their district of choice after reapplying with a few years' experience.

[dixiecupdrinking]

"Full loans" sounds like money should be an issue.

All things equal, go work, pay that down. Don't have that huge balance accumulating interest while you're making $60k.

[A. Nony Mouse]

"Full loans" sounds like money should be an issue.

All things equal, go work, pay that down. Don't have that huge balance accumulating interest while you're making $60k.

Ooops, it was too early for me to post - I read "full ride," not "full loans." Forget that last part.

[bk1]

"Full loans" sounds like money should be an issue.

All things equal, go work, pay that down. Don't have that huge balance accumulating interest while you're making $60k.

I'm not convinced the money difference is that huge. Yes you accumulate more interest, but if you clerk first you have to deal with 2 moves rather than 3 (assuming clerkship is not in same place as the firm). Though I guess the firm might cover your move again, I'm not sure of firm policies on covering additional moves.

[OneMoreLawHopeful]

Look at it this way:

If you clerk first and go in PAYE, then you'll have to pay 10% of your AGI. For the purposes of a conservative estimate, assume that a first year clerk salary of $60k gets you an AGI of $40k. 10% of that is $4k. However, you are still in the grace period for the first 4 months of the clerkship, so reduce the $4k by 1/3rd to reflect that. Total payments for your clerk year will be ~$2700.

That whole $2700 is just money down the toilet - you're not making full payments so your loan balance will actually be higher at the end of the year. Thus, if a move costs $2700 or less, then you're clearly ahead by by not clerking first.

This was also a conservative estimate: some schools graduate early and you might only get 3 months of grace period, and your AGI on a clerk's salary is probably actually closer to $50k than $40k.

Also, the amount capitalizing at the end of the year can be huge: $200k in debt at 6.8% interest will cost you over $13k/year in interest payments alone; if you've only paid $2700 that year, your total balance is now north of $210k, which makes a big difference over the life of the loan.

Unless you're doing something crazy (or not carrying anything close to full debt) it's hard to believe that 1 move will really cost more than all of that.

[patogordo]

won't capitalize though

[OneMoreLawHopeful]

won't capitalize though

Really? I'll be honest, I'm not super familiar with PAYE, but I always thought it capitalized.

What happens instead? They just keep it in a separate column or something? It's hard to believe they just forgive it on a yearly basis.

[patogordo]

won't capitalize though

Really? I'll be honest, I'm not super familiar with PAYE, but I always thought it capitalized.

What happens instead? They just keep it in a separate column or something? It's hard to believe they just forgive it on a yearly basis.

yep, they subsidize it for 3 years I believe on PAYE w/ financial hardship (i.e., payments less than 10 yr repayment).

[Anonymous User]

OP here: Thanks for the thoughts, everyone. No, I'm not a 0L. I'm a current student with a law firm offer and I'm wondering when I should apply for clerkships. The idea of doing a clerkship first interested me because it's a way to "ease" in to the practice but, like many others, I'm also in debt. For that reason, I'm leaning towards working first (among other reasons posted here). I was curious to see if clerking first provided significant advantages I haven't considered.

[bk1]

Look at it this way:

If you clerk first and go in PAYE, then you'll have to pay 10% of your AGI. For the purposes of a conservative estimate, assume that a first year clerk salary of $60k gets you an AGI of $40k. 10% of that is $4k. However, you are still in the grace period for the first 4 months of the clerkship, so reduce the $4k by 1/3rd to reflect that. Total payments for your clerk year will be ~$2700.

That whole $2700 is just money down the toilet - you're not making full payments so your loan balance will actually be higher at the end of the year. Thus, if a move costs $2700 or less, then you're clearly ahead by by not clerking first.

This was also a conservative estimate: some schools graduate early and you might only get 3 months of grace period, and your AGI on a clerk's salary is probably actually closer to $50k than $40k.

Also, the amount capitalizing at the end of the year can be huge: $200k in debt at 6.8% interest will cost you over $13k/year in interest payments alone; if you've only paid $2700 that year, your total balance is now north of $210k, which makes a big difference over the life of the loan.

Unless you're doing something crazy (or not carrying anything close to full debt) it's hard to believe that 1 move will really cost more than all of that.

$250k debt. Assuming 7.5% interest. 1st year clerk salary (after taxes): 60k(43k). 3rd year clerk salary: 85k(57k). Clerk bonus: 50k (28k). Biglaw Cravath scale with bonus: 170k(107k), 185k(115k), 205k(127k). Living off of 28k as a clerk. Living off of 60k as a biglawyer. All in excess of those amounts goes to loans.

Clerk-->Biglaw-->Biglaw
End of year 1: +interest, -15k/12 monthly payments from clerk salary = 254k, -28k from bonus = 226k
End of year 2: +interest, -55k/12 monthly payments from biglaw salary = 186k
End of year 3: +interest, -67k/12 monthly payments from biglaw salary = 131k

Biglaw-->Biglaw-->Clerk
End of year 1: +interest, -47k/12 monthly payments from biglaw salary = 220k
End of year 2: +interest, -55k/12 monthly payments from biglaw salary = 180k
End of year 3: +interest, -29k/12 monthly payments from clerk salary = 164k, -28k from bonus = 136k

Sources:
http://www.thecalculatorsite.com/financ ... ulator.php
http://www.uscourts.gov/Careers/Compens ... Rates.aspx
http://www.lawfirmstats.com/firms/Crava ... sation.php

This shows that clerking first can actually be economically favorable. Which makes sense because the raises you get in biglaw increase at a larger pace than JSP raises (i.e. the difference between 3rd year biglawyer and 3rd year clerk is larger than 1st year biglawyer and first year clerk).

Even if you paid a less as a clerk into your loans, it would likely still be slightly favorable to clerk first or be approximately even (or conversely, paid more into your loans during your first year of biglaw). But this is based on a decent number of assumptions. First it assumes you will live equally frugally whether you clerk first or clerk later, which probably isn't accurate since it's probably easier to live frugally right after having lived for 3 years as a student than it is after having spent 2 years in biglaw. It also ignores the fact that your clerkship bonus will get taxed at a higher rate (though maybe not depending on when you start/finish your clerkship and how much biglaw salary you make during that period). On the opposite side, it doesn't factor in how much easier it is to move when a large law firm is paying for your move right out of law school and you start making a biglaw salary sooner which makes it easier to furnish an apartment, buy a car, etc, if you need to do those things when you move.

My larger point is that even if you compared just paying the absolute minimum as a clerk versus living like an absolute monk as a first year biglawyer (which are kind of opposite assumptions so it doesn't make a ton of sense, but I'll roll with it) and made it so that it was economically favorable to clerk later, that difference isn't going to be large enough to matter (imo). On top of that, there are a ton of other variables that affect the calculations (supporting a family, having an SO help out with bills, moving costs, difference in CoL between biglaw city and clerk city, etc) that trying to make these very precise calculations to see which one is going to save you 5k seems foolhardy and pointless to me when you're talking about having 250k debt.

[Anonymous User]

D. ct. clerk here. Everyone's discussed a bunch of things to consider. But here is another: clerking is the best god damn job a lawyer can have that I can imagine. It's 11:30PM on a Sunday and I'm checking some of my cases because I am genuinely excited to go to work tomorrow morning at 8AM.

The judge I'm clerking for is one of the most connected people I've ever met, and also one of the nicest. I've got a lifetime reference who pulls a lot of water in this community and would jump through hoops to help me.

There is more to consider beyond finances. Clerking can be an unparalleled career boost. It's also always interesting and worthwhile. I've learned an incredible amount in just a few months.

[OutCold]

D. ct. clerk here. Everyone's discussed a bunch of things to consider. But here is another: clerking is the best god damn job a lawyer can have that I can imagine. It's 11:30PM on a Sunday and I'm checking some of my cases because I am genuinely excited to go to work tomorrow morning at 8AM.

The judge I'm clerking for is one of the most connected people I've ever met, and also one of the nicest. I've got a lifetime reference who pulls a lot of water in this community and would jump through hoops to help me.

There is more to consider beyond finances. Clerking can be an unparalleled career boost. It's also always interesting and worthwhile. I've learned an incredible amount in just a few months.

Agree with all of this, but also want to add that clerking is the best job because at 6PM on a weeknight I'm heading home to watch TV and not think about work until 9AM the next morning.

[Jchance]

Some firms treat clerking later after some years of practice as a lateral, i.e. no bonuses.

[Elston Gunn]

Lolwut? Are these all 2L and 3L responses?? Way easier to clerk first and then go to BigLaw. And the market is tougher for clerks trying to lateral off of clerkships than entry level hiring off clerkships.

I'm an associate in biglaw, and I promise you that it is often easier to clerk post-biglaw. I have several friends who lacked the grades to get clerkships straight out of law school (as in applied and were turned down), only to get multiple interviews and an offer in their district of choice after reapplying with a few years' experience.

I interpreted this to mean it is easier on your career to do your clerkship before starting work at firm, rather than after. I didn't think he meant it was easier to get a clerkship while in school vs. while working.

[Anonymous User]

Lolwut? Are these all 2L and 3L responses?? Way easier to clerk first and then go to BigLaw. And the market is tougher for clerks trying to lateral off of clerkships than entry level hiring off clerkships.

I'm an associate in biglaw, and I promise you that it is often easier to clerk post-biglaw. I have several friends who lacked the grades to get clerkships straight out of law school (as in applied and were turned down), only to get multiple interviews and an offer in their district of choice after reapplying with a few years' experience.

I interpreted this to mean it is easier on your career to do your clerkship before starting work at firm, rather than after. I didn't think he meant it was easier to get a clerkship while in school vs. while working.

That was my interpretation, as well, and it conforms, I think, to what I have seen in practice. It's easier to get into a clerkship coming off of a couple years experience, but it can be tougher coming out of the clerkship (depending on what the person in question wants to do). By contrast, it's tough to get into a clerkship straight from LS, but it can be easier to find work after (again, depending on the person and what they want to do).

These are broad strokes, of course, but that's what I've seen thus far.

[OneMoreLawHopeful]

That was my interpretation, as well, and it conforms, I think, to what I have seen in practice. It's easier to get into a clerkship coming off of a couple years experience, but it can be tougher coming out of the clerkship (depending on what the person in question wants to do). By contrast, it's tough to get into a clerkship straight from LS, but it can be easier to find work after (again, depending on the person and what they want to do).

These are broad strokes, of course, but that's what I've seen thus far.

Can you explain this? In my experience firms have always been supportive of someone who wants to clerk and they will keep your old job waiting for you. I'm not clear on how it's "easier to find work" straight out of school when you don't even need to look at all if you leave biglaw to clerk (because you can just go back to your old job).

[A. Nony Mouse]

But if you're just going back to your old job, you're not getting any of that "this helps me change jobs" benefit from clerking, which seemed to be half the argument of waiting to clerk.