Pretend I only care about the money: Corporate or Litigation? Forum

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Pretend I only care about the money: Corporate or Litigation?

Post by Anonymous User » Mon Mar 25, 2019 11:55 am

Hey folks,

I'm an incoming summer associate at a V5 that plans on splitting between litigation and corporate work over the summer. In addition to considering the obvious stuff (like which work I'd enjoy more) when deciding which group I eventually want to join after graduation, I also want to consider which would be better for long-term earning potential after (inevitably) leaving the firm. For the sake of the exercise, let's pretend that all I care about is money--in other words, I'm only thinking about long term earning potential across the various career paths that an associate at a V5 may end up in. If all you cared about was money, would you choose corporate or litigation and why?

Let's try to put the unrealistic outliers aside (e.g., hitting it big with a multi-million dollar verdict as a plaintiff's attorney, or becoming GC at a F100) and stick to common exit opportunities and career paths that a litigation or corporate associate would have available to them after starting at a V5. Of the realistic career options available to those associates, do you think you would make more money over your career as a litigator or as a corporate associate?

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by PMan99 » Mon Mar 25, 2019 12:03 pm

It will depend on which subspecialty you land on, but at the most generic level, corporate and it isnt particularly close.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Anonymous User » Mon Mar 25, 2019 12:16 pm

PMan99 wrote:It will depend on which subspecialty you land on, but at the most generic level, corporate and it isnt particularly close.
Care to expand on this?

I'm assuming the reasoning is something along the lines of litigators are highly likely to end up in government work after leaving the firm, whereas corporate associates are highly likely to end up working in-house, and the latter pays more than the former. But what about the litigator that tries to lateral down to mid-law or a small firm and make partner there—is the in-house lawyer, over the long run, still going to make more/similar money? Or is the thought that a corporate associate would have just as much opportunity to lateral down and try to make partner? Or is the lateral down-make partner move altogether unrealistic for both?

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Anonymous User » Mon Mar 25, 2019 12:27 pm

I know of 20 people who are sixth-year associates or higher who have been pushed out of top Manhattan law firms (the ones that love Harvard/Columbia/NYU and allegedly only fire people for performance-related reasons) in the past few months because there is simply no litigation work. Litigation -- and especially general commercial litigation, white collar, and internal investigations -- is a path to unemployment over the long term. Believe me, many of these are people with sterling credentials (HYPS + HYSCCN). There are no partnership positions, and there is no real uptrend in that work. It is also very difficult to land an in-house position from litigation. I would say there are three times as many positions looking for a general corporate skillset as a general litigation one. And those litigation roles take longer to fill because the employers can be that much pickier.

Corporate and it isn't even close. Though be careful of entering fields like M&A and capital markets that are positively correlated with GDP/stock market performance when a recession is coming. There's countless exit opportunities from V5 law firms that pay reasonably well, and there is actual growth happening in those fields in most economies. If you don't believe me, note that salary bumps have only really happened when the corporate groups have been hemorrhaging people to in-house jobs so quickly they need to keep the warm bodies for an extra few years (see, e.g., 2000, 2007, 2016, 2018).

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Yulilo » Mon Mar 25, 2019 12:38 pm

Anonymous User wrote:
PMan99 wrote:It will depend on which subspecialty you land on, but at the most generic level, corporate and it isnt particularly close.
Care to expand on this?

I'm assuming the reasoning is something along the lines of litigators are highly likely to end up in government work after leaving the firm, whereas corporate associates are highly likely to end up working in-house, and the latter pays more than the former. But what about the litigator that tries to lateral down to mid-law or a small firm and make partner there—is the in-house lawyer, over the long run, still going to make more/similar money? Or is the thought that a corporate associate would have just as much opportunity to lateral down and try to make partner? Or is the lateral down-make partner move altogether unrealistic for both?

I think what PMan was suggesting is that compared to litigation corporate exit opportunities are: (1) more numerous and (2) higher paying. From what I’ve heard, the only “normal” exit opps available to big law litigators is to lateral down to a smaller firm or go into government.

For corporate, the best exit opp money wise would be to go into investment banking. This is difficult but not unheard of when the economy is strong. If you’re at a V5 in NYC you are bound to find alums of your firm who made this jump. Otherwise the more normal exit opps are lateraling to another firm or going in house at a bank or a Fx00 company. For the latter, you usually end up taking a pay cut relative to big law and are probably capped at ~300K if you secure a good position in a major market.

Edit: This is Yulilo. I didn’t mean to post anonymously.
Last edited by QContinuum on Mon Mar 25, 2019 10:07 pm, edited 2 times in total.
Reason: De-anoned at poster's request.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by FND » Mon Mar 25, 2019 12:55 pm

Anonymous User wrote:Corporate and it isn't even close
For the star performers, exit opportunities can include managing director at an investment bank, general counsel at a hedge fund or VE, board membership at a midsize company, possibly even C-level jobs.

(I've met and known people who have managed to obtain each of these)

However, the chance of that happening is very small. Luck and timing play a big part of it. But if you can manage it, the income potential is unlimited. Far more than even managing partner rainmaker litigators would make.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by gaddockteeg » Mon Mar 25, 2019 1:07 pm

Corporate. Easy. On pretty much every level aside from junior associates.

for midevels: Better in-house exit options with better pay. Better unique exit ops (to business-side roles of banks/companies, start-ups don't need lit attorneys, better exposure to movers/shakers earlier on). For more senior attorneys: Wayyy easier to develop a book of business. Even at the most senior levels of partnership, corporate partners make way more on average.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by jkpolk » Mon Mar 25, 2019 1:30 pm

Another thing law students dont fully understand/internalize: Associates miss their hours and get NOBONUSed regularly and not because those associates are bad at the job or not working hard (it's like 35% at my firm missing bonuses, although ymmv depending on hours requirements). If you go to a place without an hours requirement that pays market bonus, GREAT, this is not applicable. Otherwise, you're more likely to have the hours to get your bonus in a corporate practice (although as a 1st year you're especially likely to miss your bonus regardless of practice). Not to say you WONT make hours in lit, just that it's less likely on average.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Person1111 » Mon Mar 25, 2019 2:18 pm

Anonymous User wrote:I know of 20 people who are sixth-year associates or higher who have been pushed out of top Manhattan law firms (the ones that love Harvard/Columbia/NYU and allegedly only fire people for performance-related reasons) in the past few months because there is simply no litigation work. Litigation -- and especially general commercial litigation, white collar, and internal investigations -- is a path to unemployment over the long term. Believe me, many of these are people with sterling credentials (HYPS + HYSCCN). There are no partnership positions, and there is no real uptrend in that work. It is also very difficult to land an in-house position from litigation. I would say there are three times as many positions looking for a general corporate skillset as a general litigation one. And those litigation roles take longer to fill because the employers can be that much pickier.

Corporate and it isn't even close. Though be careful of entering fields like M&A and capital markets that are positively correlated with GDP/stock market performance when a recession is coming. There's countless exit opportunities from V5 law firms that pay reasonably well, and there is actual growth happening in those fields in most economies. If you don't believe me, note that salary bumps have only really happened when the corporate groups have been hemorrhaging people to in-house jobs so quickly they need to keep the warm bodies for an extra few years (see, e.g., 2000, 2007, 2016, 2018).
For whatever it's worth, I work at a non-Manhattan biglaw firm somewhere down the V list, and we are plenty busy. I do think that billing rate pressure is pushing some of the litigation work that used to go to the V5/V10 further down the food chain.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Anonymous User » Mon Mar 25, 2019 3:25 pm

I'm a junior litigation partner in roughly the top quarter of Vault in a non-NY market. I made partner in the past couple of years at a one-tier (straight to equity) firm, and was one of 4-6 litigation partners in my my class. The partner compensation is good enough from the get-go that it'd take a real baller to feel deprived.

Of the midlevel to senior litigation associates who have left my group in the past several years, virtually all have gone in-house to top-shelf companies, almost all in litigation supervisory roles, although a couple have transitioned to product counsel or some other counseling role. The only exceptions are those who specifically wanted to become prosecutors to obtain trial experience.

In terms of workload, we are busier than comfortable; you'd have to be taking pains to dodge work before you would miss hours/bonus eligibility.

Given these factors, from my personal vantagepoint, the "no opportunities in litigation"/gloom-and-doom angle in this thread seems considerably overstated. If you want to do litigation, the opportunities are there - including opportunities to make good money in biglaw or post-biglaw.

However, I still agree that there are a much greater diversity of post-biglaw, private sector lucrative opportunities for exiting corporate associates. There are comparatively few litigation-specific in-house openings, so initial job searches can take longer (decent firms will recognize this when counseling out mid/senior associates and provide adequate time to find a job). And if you want to continue to work in a litigation-focused role while in-house, opportunities for advancement can be fewer than for your corporate counterparts. It also seems rarer for former litigators to become GCs of larger companies, although there are some exceptions. So given that the OP's premise was how to maximize lucrative post-biglaw opportunities, I'd agree they may find a greater diversity of those opportunities in the private sector if they go the corporate associate route.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Anonymous User » Thu Mar 28, 2019 9:44 am

Anonymous User wrote:Hey folks,

I'm an incoming summer associate at a V5 that plans on splitting between litigation and corporate work over the summer. In addition to considering the obvious stuff (like which work I'd enjoy more) when deciding which group I eventually want to join after graduation, I also want to consider which would be better for long-term earning potential after (inevitably) leaving the firm. For the sake of the exercise, let's pretend that all I care about is money--in other words, I'm only thinking about long term earning potential across the various career paths that an associate at a V5 may end up in. If all you cared about was money, would you choose corporate or litigation and why?

Let's try to put the unrealistic outliers aside (e.g., hitting it big with a multi-million dollar verdict as a plaintiff's attorney, or becoming GC at a F100) and stick to common exit opportunities and career paths that a litigation or corporate associate would have available to them after starting at a V5. Of the realistic career options available to those associates, do you think you would make more money over your career as a litigator or as a corporate associate?
Litigation any day. I have several friends (specifically 3) who started their own mass torts / MDL firms that are multimillionaires now and they are just shy of 10 years out of law school, not even exaggerating. They are not all at the same firm either, they each started their own firm. They make 10 times what a big law partner would make after having put in the same amount of time in a corporate setting.

However, I have a strong aversion to minimum billables, so I wouldn't go corporate unless my life depended on it anyway.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by FND » Thu Mar 28, 2019 11:59 am

Yulilo wrote:For corporate, the best exit opp money wise would be to go into investment banking
That's simply not true.
There are quite a few attorneys who go from biglaw to ibanking, and yes, they do make more money, but, that's not the best exit opportunity money wise. Private equity and VC are both more profitable, and the best exit opportunity is to either Board or C-level at a corporation, and yes, there are attorneys doing just that. BUT, the chances of that happening are really slim. It's more luck than anything else - being at the right time at the right place, having serviced the right clients for the right length of time, etc.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Anonymous User » Fri Mar 29, 2019 1:26 pm

Anonymous User wrote:
Anonymous User wrote:Hey folks,

I'm an incoming summer associate at a V5 that plans on splitting between litigation and corporate work over the summer. In addition to considering the obvious stuff (like which work I'd enjoy more) when deciding which group I eventually want to join after graduation, I also want to consider which would be better for long-term earning potential after (inevitably) leaving the firm. For the sake of the exercise, let's pretend that all I care about is money--in other words, I'm only thinking about long term earning potential across the various career paths that an associate at a V5 may end up in. If all you cared about was money, would you choose corporate or litigation and why?

Let's try to put the unrealistic outliers aside (e.g., hitting it big with a multi-million dollar verdict as a plaintiff's attorney, or becoming GC at a F100) and stick to common exit opportunities and career paths that a litigation or corporate associate would have available to them after starting at a V5. Of the realistic career options available to those associates, do you think you would make more money over your career as a litigator or as a corporate associate?
Litigation any day. I have several friends (specifically 3) who started their own mass torts / MDL firms that are multimillionaires now and they are just shy of 10 years out of law school, not even exaggerating. They are not all at the same firm either, they each started their own firm. They make 10 times what a big law partner would make after having put in the same amount of time in a corporate setting.

However, I have a strong aversion to minimum billables, so I wouldn't go corporate unless my life depended on it anyway.
OP here.

I figured that this would be the strongest argument in favor of litigation. But I have trouble wrapping my head around the level of difficulty of hanging a shingle and actually making it big (or making it at all) as a plaintiff's attorney. If it's really as realistic as your post makes it sound, why do so many mid-level and senior litigation associates that want to stay in private practice lateral to established small/mid-sized firms or do something like insurance defense when they could make more money and get the "coveted" actual litigation/trial experience at a plaintiff's? Is it the uncertainty of hanging a shingle or the "ambulance chaser" stigma? Or maybe I made some wrong assumptions along the way . . .

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by FND » Fri Mar 29, 2019 1:55 pm

Anonymous User wrote:I figured that this would be the strongest argument in favor of litigation. But I have trouble wrapping my head around the level of difficulty of hanging a shingle and actually making it big (or making it at all) as a plaintiff's attorney. If it's really as realistic as your post makes it sound, why do so many mid-level and senior litigation associates that want to stay in private practice lateral to established small/mid-sized firms or do something like insurance defense when they could make more money and get the "coveted" actual litigation/trial experience at a plaintiff's? Is it the uncertainty of hanging a shingle or the "ambulance chaser" stigma? Or maybe I made some wrong assumptions along the way . . .
1) attorneys are notoriously risk-averse, and there's nothing riskier than going solo
2) a lot of attorneys who go solo crash and burn
3) it's a lot easier, and a lot less risky, to lateral to a smaller firm and take clients with you than it is to go solo and take clients with you.

Starting your own business is very risky. Those who succeed are paid accordingly. Plenty of people fail, and plenty more do so-so, surviving, but not thriving. It's certainly not for the feint-of-heart.
Keep in mind that you're basically giving up a high six figure salary, which on a personal level can e very difficult to give up. You're also losing all the support you're used to having, not just paralegals and secretaries, but also associates to do grunt work, senior partners for guidance, co-workers to use as sounding boards, attorneys in other practice areas for stuff outside of your specialty, and things like office managers, IT, marketers, etc. who you don't even realize make your life better in a million ways.
When you go solo, you're making your own coffee, doing your own dishes, fixing your own tech issues, vacuuming and dusting and cleaning the windows yourself, killing the plants you forgot to water, ordering your own supplies, printing labels, ensuring sufficient postage stamps, etc.

Here are some issues I went through recently, to give a few examples:
1) forgot to pay the rent check on time, so I had a pissy landlord
2) Staples sent toner that isn't compatible with my model printer, which I discovered in the morning when I had clients coming in to sign documents and didn't have the final version readily available
3) ran out of notepads
4) missed payment on my malpractice insurance and had to pay interest
5) offered client hot chocolate but we were out
6) ran out of tissues - only to hit a nerve and have the client slobbering the rest of our meeting
7) ordered promotional pens that are falling apart
8) calendar syncing issues between my practice management software, my email software, my cell phone, and my personal calendar, so that no matter which calendar I looked at, there were appointments missing
edit:9) plunging a toilet after a customer, ahem, left a calling card

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by QContinuum » Fri Mar 29, 2019 2:34 pm

FND wrote:When you go solo, you're making your own coffee, doing your own dishes, fixing your own tech issues, vacuuming and dusting and cleaning the windows yourself, killing the plants you forgot to water, ordering your own supplies, printing labels, ensuring sufficient postage stamps, etc.
Presumably the uber-successful solos making 7 figures have secretaries, paralegals and a cleaning service. I can't imagine they moonlight as plumbers or janitors. But it's tough. Where do you get to the point where you can justify the expense of hiring these staff? All too easily one could become one of the dumb overspending solos repeatedly cited by AVBucks as an explanation for why the average solo doesn't make more money.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by FND » Fri Mar 29, 2019 2:50 pm

QContinuum wrote:
FND wrote:When you go solo, you're making your own coffee, doing your own dishes, fixing your own tech issues, vacuuming and dusting and cleaning the windows yourself, killing the plants you forgot to water, ordering your own supplies, printing labels, ensuring sufficient postage stamps, etc.
Presumably the uber-successful solos making 7 figures have secretaries, paralegals and a cleaning service. I can't imagine they moonlight as plumbers or janitors. But it's tough. Where do you get to the point where you can justify the expense of hiring these staff? All too easily one could become one of the dumb overspending solos repeatedly cited by AVBucks as an explanation for why the average solo doesn't make more money.
yes and yes

Personally, I wouldn't hire anyone else until I (a) was busy enough that it made sense to get extra help, (b) had been earning enough to justify the cost of such person for 6 consecutive months, and (c) had enough money in the bank that if I received $0 for the next 3 months, I'd still be fine paying all the costs and salaries

But that's still not straightforward.
- Hiring a cleaning person to come in once a week is a cheap luxury that a lot of people spring for sooner rather than later.
- Hiring the first support staff may be a matter of marketing more than a matter of need - having someone else answer the phone and see if the attorney is busy creates a certain impression.
- Hiring an associate is a matter of consistently having more work than you can (or want to) handle yourself and such person being cheap enough to make it worthwhile.
As an example, I know an attorney who has a particular contract that pays her about $60k/yr that she's too busy to handle herself. In all likelihood she's going to let the contract lapse because any associate she hires to do the work would cost too much for it to make sense (remember, as an employer you're not just paying extra salary, but also things like payroll taxes, CLE/malpractice insurance, technology fees, etc.; after covering all those costs, there needs to be sufficient profit to justify supervision, admin related to the case, and the risk of something going wrong)

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by nixy » Fri Mar 29, 2019 2:53 pm

Yeah, my impression is that the top-tier plaintiffs attorneys make the most money of all, but that the outcome is a lot less likely than in-house for corps people, which often pays more than non-partner litigation outcomes (gov/non-top flight solo).

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by FND » Fri Mar 29, 2019 3:09 pm

nixy wrote:Yeah, my impression is that the top-tier plaintiffs attorneys make the most money of all, but that the outcome is a lot less likely than in-house for corps people, which often pays more than non-partner litigation outcomes (gov/non-top flight solo).
The ones I know who make the most overall started or transitioned to some niche company doing weird tax or financial stuff, like setting up captive insurance for hedge funds or off-shore profit-shifting structures for fortune 500 companies. But then, my experience and connections are mostly transactional, so I don't really know about the asbestos-litigation type places.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by Bllljd115 » Sat Mar 30, 2019 4:52 pm

I would decide based on what type of career path you think you would be better suited for. Putting aside outliers like the litigators who wind up with their own contingency/class action practices or the folks who lateral from law firms to ibanks to PE/VE, the corporate associate is going to have more opportunities in house, the litigators will have more opportunities at midlaw. If you are the type of person who can climb the corporate ladder you can eventually wind up making GC level money (however, unless you are at a F500/bank you probably aren't pulling down as much as a biglaw partner.) Midlaw or boutique firm work is probably less steady but if you have good business sense you can probably have a couple of really good years and come out well ahead of an in-house lawyer.

In terms of who has more partnership potential, I'd say it depends on the firm but overall it's about even if you count litigators who go to work for regulators and then come back. I'd give the corporate partners the comp edge long-term, though, since they are more likely to have the client relationships and be able to get the origination credit that comes with that. (That being said, the firms that do the best have broad based practices and are able to cross-sell to large clients.) But these are all generalities, being a lit partner at Quinn would undoubtedly be more financially rewarding than being a corporate partner somewhere below the AmLaw 30.

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Re: Pretend I only care about the money: Corporate or Litigation?

Post by dabigchina » Sat Mar 30, 2019 11:51 pm

Bllljd115 wrote:I would decide based on what type of career path you think you would be better suited for. Putting aside outliers like the litigators who wind up with their own contingency/class action practices or the folks who lateral from law firms to ibanks to PE/VE, the corporate associate is going to have more opportunities in house, the litigators will have more opportunities at midlaw. If you are the type of person who can climb the corporate ladder you can eventually wind up making GC level money (however, unless you are at a F500/bank you probably aren't pulling down as much as a biglaw partner.) Midlaw or boutique firm work is probably less steady but if you have good business sense you can probably have a couple of really good years and come out well ahead of an in-house lawyer.

In terms of who has more partnership potential, I'd say it depends on the firm but overall it's about even if you count litigators who go to work for regulators and then come back. I'd give the corporate partners the comp edge long-term, though, since they are more likely to have the client relationships and be able to get the origination credit that comes with that. (That being said, the firms that do the best have broad based practices and are able to cross-sell to large clients.) But these are all generalities, being a lit partner at Quinn would undoubtedly be more financially rewarding than being a corporate partner somewhere below the AmLaw 30.
the odds of making GC/partner are so small that you can basically disregard potential compensation at that level when you are making a choice as to whether you want litigation or corporate.

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