Why do biglaw firms always seem to hire 3Ls for Exec Comp/Employee Benefits? Forum

[Anonymous User]

Why do biglaw firms always seem to hire 3Ls for Exec Comp/Employee Benefits? Is the lifestyle much worse than the other practice groups? Are the exit options much worse, which is why the 2L summers do not voluntarily go into the group? From the attorneys in the practice area, they seem to enjoy the practice.

[Calbears123]

Just a guess but I don’t think anyone goes to law school with the goal of setting up compensation packages for C suite executives.

[Anonymous User]

I work in a Chambers Band 2 exec comp practice:

Nobody wants to do it, but there's a ton of work, and it has to be done.

[LikelyThrowaway]

I work in a Chambers Band 2 exec comp practice:

Nobody wants to do it, but there's a ton of work, and it has to be done.

What exactly is the work? What is the day-to-day of exec comp/employee benefits?

[Bingo_Bongo]

Just a guess but I don’t think anyone goes to law school with the goal of setting up compensation packages for C suite executives.

Yeah, but does anyone go to law school really wanting to practice any type of law?

[Anonymous User]

Finally, something I have some knowledge about. I was a 3L hired into an Exec Comp and Benefits (ECB) group (I had legal experience in the area and relevant coursework).

I think the main problem is exposure. The reality is honestly that people do not know about the practice area or understand what it does. In large part, that's because law schools don't invite ECB attorneys to speaker panels and firms don't really send out ECB people to receptions. Normally, M&A, Lit, Capital Markets, etc. attorneys are present. Naturally, on top of being the "sexy" moneymakers and deal drivers of law, students get more exposure to what it means to be that type of attorney. When it comes to smaller groups, people for the most part have heard of a hedge fund and might have some idea what "funds" might entail really cool/prized work or like tech and think "IP Transactions" could be fun. Very few people are thinking "wow, employee benefits and executive compensation" sounds like a sexy support group. Even for Tax LLMs, ECB work is viewed as lower-tier than tax work, which is viewed as intellectual and engaging. They instead think of it as really boring HR-like work. In addition, ECB and ERISA often get thrown around a lot, despite many of the top shops doing very little ERISA work. ERISA is almost universally dreaded, so that sends people in the opposite direction.

Another big problem is that ECB groups can get crushed when business is good. I actually had 3-4 offers at V5/V10/V20 type firms after my 2L (all in ECB), and one firm told me that their ECB group has been the highest billing group on average for the past 3 years (this was a serious concern of worry, because associates were burning out like crazy). At all of the other firms, I got the same indication that ECB people work grueling hours. At the firm I summered at in ECB, attorneys frequently had 20+ open matters and were filing out of the firm at midnight on a consistent basis. When you already start with few people knowing about your group (and thus joining it) and then also have a huge problem with people getting crushed and burning out, it's hard to stay well staffed.

As for the day-to-day life, it can be quite varied. If you're at a shop that does a lot of benefits work, you might look at a fair number of employment agreements (though sometimes that is shipped off to a labor law group), flagging for ERISA problems, or counseling about the Affordable Care Act. If your shop does more executive compensation work, you'll be looking at employment agreements or merger terms to understand the effects of 280G, 409A, 162(m), securities laws, and employment laws in terms of compensating senior leadership teams (i.e. VPs/C-Suite Executives). I think the practice, at least on the executive compensation end, can be pretty cool in that you can end up on phone calls with CEOs, CFOs, etc. at a very junior level doing "management diligence."

I think exit options can be general corporate counsel to benefits counsel to HR director roles. In the benefits counsel world, I think your experience can really limit you. Some shops you'll do nothing but true executive compensation work, and that will hurt when the position is truly looking for someone to deal with benefit programs. I do think the strength here though is that you can spin yourself as more of a corporate lawyer that understands the corporate documents in M&A deals and just generally in a transactional sense. I'd rate exit options ad pretty good.

Personally, I have no regrets. Shit is fun. People think I'm weird for liking it, but I think litigation people are freaks, so I'm not too miffed.

[Anonymous User]

Finally, something I have some knowledge about. I was a 3L hired into an Exec Comp and Benefits (ECB) group (I had legal experience in the area and relevant coursework).

Can I ask which classes you took at law school? Thanks for your post.

[acr]

Just a guess but I don’t think anyone goes to law school with the goal of setting up compensation packages for C suite executives.

This.

So what are you doing with your life?

"I spend every waking hour of my day structuring compensation for corporate executives"

It's just not desirable or appealing in any sense.

[nixy]

I mean, to you. That’s all pretty subjective.

[Anonymous User]

Just a guess but I don’t think anyone goes to law school with the goal of setting up compensation packages for C suite executives.

This.

So what are you doing with your life?

"I spend every waking hour of my day structuring compensation for corporate executives"

It's just not desirable or appealing in any sense.

Exec comp lawyers are really M&A lawyers with an extremely narrow focus: labor and employment issues that may arise in connection with M&A. I.e., they do everything that M&A lawyers do, except their focus is exclusively on labor and employment issues.

I am the anon above who suggested that "Nobody wants to do it." I have to admit that the midlevels and seniors in my group are really into it (true believers) and are extraordinarily knowledgeable and competent. But one could say the same thing about any other practice, that the ones who last the longest are the ones fully invested and genuinely interested in the work.

[cheaptilts]

Just a guess but I don’t think anyone goes to law school with the goal of setting up compensation packages for C suite executives.

This.

So what are you doing with your life?

"I spend every waking hour of my day structuring compensation for corporate executives"

It's just not desirable or appealing in any sense.

“I spend every day of my life making sure the signature pages are correct and the terms already agreed upon by business people and bankers are set forth correctly in a large document. I also look through documents to make sure that there are no super duper red flags before the business people culminate their business.”

Idk, both sound p bad to a litigator.

[Anonymous User]

Finally, something I have some knowledge about. I was a 3L hired into an Exec Comp and Benefits (ECB) group (I had legal experience in the area and relevant coursework).

Can I ask which classes you took at law school? Thanks for your post.

The two main courses I took were (1) executive compensation and (2) ERISA (both are very rare courses that probably only exist at a dozen or less schools). Beyond that, I took labor law, employment law, securities regulation, and intro tax. If your school doesn't have either of (1) or (2), take the second list of courses. If you like them, I think you'll like the practice.

I think the "I make execs richer" perspective is bad and one of people who burn out of the practice group. Like another poster said, mid-levels and senior associates (and of course partners) who survive the longest are those who truly believe in the work. They usually understand the importance of executives in an organization and truly believe that proper compensation is necessary to attract the highest performing executives and to steer them towards meeting certain goals at the company. Personally, I think of executives as football coaches (head and position coaches)(I'm a big sports fan). Of course you want to incentivize your head coach to win the most games (enrich shareholders), and you know that the position coaches need to have their eye on the prize for the head coach to succeed (making the defensive line the best, training wide receivers to catch passes consistently when contested, etc.), so they also need to be compensated with those goals in mind.

[papermateflair]

I'm a senior associate who does ERISA/exec comp, and I think the conversation here has moved to focus more on exec comp (understandable), but there's a pretty wide variety in the type of work that's available in this area other than designing executive stock plans and working on transactions - 401(k) specialists, health and welfare/ACA, pension investments, union/multiemployer plans, insurance product design, etc.

Outside of the exec comp/M&A space most firms don't really need a new associate until someone else leaves to go in-house. And it's so specialized you don't really want to take someone into your group who just gets placed there as a summer associate. Junior associates aren't super helpful for a long time, because ERISA is so technical, and firms only want to hire newbies when they like, REALLY need someone (and when they've decided to suck it up and train a junior for a few years hoping the junior isn't going to lateral as a 4th year).

[Anonymous User]

I'm a senior associate who does ERISA/exec comp, and I think the conversation here has moved to focus more on exec comp (understandable), but there's a pretty wide variety in the type of work that's available in this area other than designing executive stock plans and working on transactions - 401(k) specialists, health and welfare/ACA, pension investments, union/multiemployer plans, insurance product design, etc.

Outside of the exec comp/M&A space most firms don't really need a new associate until someone else leaves to go in-house. And it's so specialized you don't really want to take someone into your group who just gets placed there as a summer associate. Junior associates aren't super helpful for a long time, because ERISA is so technical, and firms only want to hire newbies when they like, REALLY need someone (and when they've decided to suck it up and train a junior for a few years hoping the junior isn't going to lateral as a 4th year).

This.

When people talk about benefits, they usually mean Title I and transactional exec comp. if you’re not a Title I specialist at a big shop, you’re a specialized m&a associate doing exec comp. Firms will retool m&a associates to do these practices because it’s not hard to learn the basics of exec comp. I’ve heard that these jobs suck hours-wise (I once heard an associate who mentioned being on 14 deals). The work is “sexy,” I guess, but so is M&A.

When I lateraled, I wanted to go to a firm that gave me the opportunity to do QP, NQP, Title I, etc. Unfortunately, THESE jobs are far and few in-between for the reasons mentioned above unless you go to a small shop doing very low-level ERISA work. I lateraled as a junior and I want to say there are maybe 50 junior associates who do this work at market-paying firms. Many firms wanted someone with more experience, so I just kept interviewing until I had that experience.

[jkpolk]

I would guess, but don't conclusively know, that 3L hires are made for need and not headcount (or whatever SA hires are made for) and will be disproportionately slotted into corporate specialist roles or areas with especially high churn (read: restructuring).

[Anonymous User]

I am also interested in slotting into exec comp. Where do associates who burn out from exec comp go? Do they just ragequit and go work as a barista? Everything I've heard about exec comp-heavy practices indicates the exit ops are not very strong.

For reference, the group I'm interested in does quite a bit of M&A support, with some planning work sprinkled in (equity plans, severance plans, ESPPs, etc). My group does not do a lot of Title 1 (not sure what that is even) or ERISA.

FWIW, I have found that exec comp people tend to be very nice, which is why I am interested in working with them.

[Anonymous User]

I'm a senior associate who does ERISA/exec comp, and I think the conversation here has moved to focus more on exec comp (understandable), but there's a pretty wide variety in the type of work that's available in this area other than designing executive stock plans and working on transactions - 401(k) specialists, health and welfare/ACA, pension investments, union/multiemployer plans, insurance product design, etc.

This is a good portrayal of Benefits work.

When looking at firms, it's very important to ask what type of work they do. I'm the poster who got offers at several V5/V10/V20 type firms as a 3L, and when I did my interviews I asked the "what kind of work do you do" question. I described the work I did at my V100 firm the previous summer (Exec Comp + Title I work/ACA/health and welfare), and they pretty much scoffed at the idea of doing Title I/ACA/health and welfare work. While I think that work is very interesting in addition to what I mostly do now at one of those firms (exec comp, even though many groups include the word "benefits"), several partners at those firms said the type of work I was doing at my V100 on the benefits side was far too low margin for them.

I also think it's very important to ask individual attorneys what type of work they do and if/when they specialize. There are some people who spend their entire biglaw existence doing Title I work. Personally, if that's all I did, I'd find the nearest window and jump. There are other people who get really well rounded benefits experience. Then, there are people who get benefits + exec comp experience. There are also folk who only do M&A exec comp, and then there are folks who might also do BK or PE exec comp.

[Anonymous User]

I'm a senior associate who does ERISA/exec comp, and I think the conversation here has moved to focus more on exec comp (understandable), but there's a pretty wide variety in the type of work that's available in this area other than designing executive stock plans and working on transactions - 401(k) specialists, health and welfare/ACA, pension investments, union/multiemployer plans, insurance product design, etc.

This is a good portrayal of Benefits work.

When looking at firms, it's very important to ask what type of work they do. I'm the poster who got offers at several V5/V10/V20 type firms as a 3L, and when I did my interviews I asked the "what kind of work do you do" question. I described the work I did at my V100 firm the previous summer (Exec Comp + Title I work/ACA/health and welfare), and they pretty much scoffed at the idea of doing Title I/ACA/health and welfare work. While I think that work is very interesting in addition to what I mostly do now at one of those firms (exec comp, even though many groups include the word "benefits"), several partners at those firms said the type of work I was doing at my V100 on the benefits side was far too low margin for them.

I also think it's very important to ask individual attorneys what type of work they do and if/when they specialize. There are some people who spend their entire biglaw existence doing Title I work. Personally, if that's all I did, I'd find the nearest window and jump. There are other people who get really well rounded benefits experience. Then, there are people who get benefits + exec comp experience. There are also folk who only do M&A exec comp, and then there are folks who might also do BK or PE exec comp.

I’m one of the anon benefits associates. I think it’s becoming harder and harder to find benefits/comp work that isn’t just pushing out due diligence for M&A. Some of the firms I interviewed at made it very clear that even though they do severance agreements, Title I, QP and ACA, my role would be in transactions. That made it a very unattractive option, tbh. The partners handle most of the sexy exec comp work with associates that assist, but a lot of these associates go in thinking that it’ll be mostly that kind of work. When they start, though, they’re staffed on 10-20 deals doing due diligence, which doesn’t really build any transferable skills outside of m&a.

When deals start to slow down, maybe they’ll get some experience on other things.

The thing I noticed, and my friends notice, is that non-deal comp and benefits work cannot really be leveraged, so partners handle most of it. That creates problems because no one is really learning it. For example, that’s why there are almost no senior associates who do Title I, but there are a ton of senior partners who do.