Taking a 20% pay cut from boutique law firm to ID Forum

[Anonymous User]

From low ranked T1 in middle market. No debt. Landed first job at boutique law firm and worked as an associate for a year and a couple months. Was getting paid good money, 120k a year, but firm was a bad fit and I strongly dislike the practice area. I don't know about ya'll but I was in no position to turn down job offers during law school. I knew going into the job it wasn't gonna last long, though I thought I had a little more time. Anyways, Leaving on good terms, still employed, but looking to jump ship as soon as possible.

I have two job offers in hand from insurance defense firms, but I'd have to take around a 20% pay cut from 120k to 90-100k. I know people scoff at insurance defense but I actually see a future for me in ID. Ideally, I would wait a few months for a perfect offer, something in commercial litigation that pays the same, but everyone tells me a gap in employment is bad(I personally don't think its the end of the word), and billing time while you're basically laid off is miserable.

I think if I take the offer, I stand to recoup the losses later down the road. This is a long winded way of asking how difficult will it be to take this pay cut? I may have to take a pay cut anyways even if I hang around my firm another month or so.

Am I being rash or over anxious? Please advise.

[Flarmanarnar]

Let me start out by saying I worked in ID temporarily and hated it so I may be biased, but I think if you interviewed with the firm, have done your research, and honestly think it is a better overall "fit" for you long-term I would strongly consider it. However, make sure to do research (i.e. how hard is it to move up the pay scale at these ID firms?) A lot of these firms will try to sell you on the idea that, while you may not make much money now, you will in the future and will promise you high bonuses should you bill a certain amount. I would just caution against these ID firms that act more like used car salesmen when pitching the firm to you.

Otherwise, if you want a lot of responsibility and hands-on litigation experience, ID is a great place to obtain it. Maybe don't rush into it though, and definitely do research. Also really examine what you didn't like about your current firm and why you believe ID would be better for you long-term because, all joking aside, I don't know many people who say ID is a better "fit." Burnout rates at some ID firms can be pretty high so be careful. Also, be cautious of how many billable hours they require because some ID firms will work you like a dog for bare minimum pay in the end [when you compare hours actually worked v. pay].

TL;DR: taking a pay cut is not a crazy idea when you are not happy doing what you currently do and have no other options and/or think you will be happier doing something else BUT don't rush into any new job without serious research/consideration. Good luck!

[sparty99]

From low ranked T1 in middle market. No debt. Landed first job at boutique law firm and worked as an associate for a year and a couple months. Was getting paid good money, 120k a year, but firm was a bad fit and I strongly dislike the practice area. I don't know about ya'll but I was in no position to turn down job offers during law school. I knew going into the job it wasn't gonna last long, though I thought I had a little more time. Anyways, Leaving on good terms, still employed, but looking to jump ship as soon as possible.

I have two job offers in hand from insurance defense firms, but I'd have to take around a 20% pay cut from 120k to 90-100k. I know people scoff at insurance defense but I actually see a future for me in ID. Ideally, I would wait a few months for a perfect offer, something in commercial litigation that pays the same, but everyone tells me a gap in employment is bad(I personally don't think its the end of the word), and billing time while you're basically laid off is miserable.

I think if I take the offer, I stand to recoup the losses later down the road. This is a long winded way of asking how difficult will it be to take this pay cut? I may have to take a pay cut anyways even if I hang around my firm another month or so.

Am I being rash or over anxious? Please advise.

Unless you are being pushed out and are about to be jobless, I would keep looking. Why take a pay cut when you are going from law firm A to B? You should be getting a pay increase. You need to apply to Big Law Firms.

[JOThompson]

Better to have a gap in employment than get pigeonholed into insurance defense.

I know the grass often seems greener on the other side, but insurance defense can be a hellhole. I'd research the firms and try to determine what pay raises look like and what the billable expectations actually are. I have friends who were miserable in insurance defense. Turnover was constant. I'm sure there are exceptions. Some in-house options like State Farm have decent work life balance, but places like Geico are sweatshops.

[nealric]

I can't fathom why you'd want to go from a true boutique to insurance defense. The problem with insurance defense is that billing rates are very low and cases are repetitive. This means three things: 1) most legal work involves churning through nearly identical filings, 2) even where a case might have some interesting issues to look into, you can't justify research or novel arguments on the bill, 3) your upside is capped unless you are a partner with a ton of associates churning hours below you. Because firms are working off low hourly rates, there is also a lot of pressure to bill a lot of hours.

If you want out of your current practice, find something that would actually be an improvement before rashly jumping ship.

[2013]

I can't fathom why you'd want to go from a true boutique to insurance defense. The problem with insurance defense is that billing rates are very low and cases are repetitive. This means three things: 1) most legal work involves churning through nearly identical filings, 2) even where a case might have some interesting issues to look into, you can't justify research or novel arguments on the bill, 3) your upside is capped unless you are a partner with a ton of associates churning hours below you. Because firms are working off low hourly rates, there is also a lot of pressure to bill a lot of hours.

If you want out of your current practice, find something that would actually be an improvement before rashly jumping ship.

I don’t think OP is in a true boutique. Salary is $120k.

[mt2165]

I can't fathom why you'd want to go from a true boutique to insurance defense. The problem with insurance defense is that billing rates are very low and cases are repetitive. This means three things: 1) most legal work involves churning through nearly identical filings, 2) even where a case might have some interesting issues to look into, you can't justify research or novel arguments on the bill, 3) your upside is capped unless you are a partner with a ton of associates churning hours below you. Because firms are working off low hourly rates, there is also a lot of pressure to bill a lot of hours.

If you want out of your current practice, find something that would actually be an improvement before rashly jumping ship.

I don’t think OP is in a true boutique. Salary is $120k.

Na. Idk what you mean by true boutique but non-major market boutiques often pay between 100-150. Market is usually a lot lower and even good boutiques often don't match market though bonuses are a little more idiosyncratic.

OP what is the niche practice? I'd look to segue into something more palatable and less career defining than ID.

[QContinuum]

OP isn't "jumping ship", they say they were laid off from their current boutique (with a maybe somewhat-flexible runway). So, staying at the boutique isn't an option. The question is whether to take an ID gig or keep looking (and running the risk of an employment gap).

I'd be in favor of running the risk, assuming OP's finances permit a short-term loss of income. Once you get into ID, it's hard to break back out. There's "strongly dislike the practice area" and then there's ID. OP could afford to try looking for a little while longer before going into ID, IMO.

[sparty99]

OP isn't "jumping ship", they say they were laid off from their current boutique (with a maybe somewhat-flexible runway). So, staying at the boutique isn't an option. The question is whether to take an ID gig or keep looking (and running the risk of an employment gap).

I'd be in favor of running the risk, assuming OP's finances permit a short-term loss of income. Once you get into ID, it's hard to break back out. There's "strongly dislike the practice area" and then there's ID. OP could afford to try looking for a little while longer before going into ID, IMO.

I would take the ID firm if it means being unemployed. You can always continue to look. Maybe do 12 months of ID and it is easy to get out of ID if you already have the stats for Big Law. Litigation is litigation and you will go to court. Just make sure you do a practice area that transfers to Big Law. I did ID for several years and got out. Interviewed with top big law firms even though i didnt have the grades. ID is not as bad as people make it seem but why do ID at 100k when you can do the same work in big law for 160k+.

[mt2165]

OP isn't "jumping ship", they say they were laid off from their current boutique (with a maybe somewhat-flexible runway). So, staying at the boutique isn't an option. The question is whether to take an ID gig or keep looking (and running the risk of an employment gap).

I'd be in favor of running the risk, assuming OP's finances permit a short-term loss of income. Once you get into ID, it's hard to break back out. There's "strongly dislike the practice area" and then there's ID. OP could afford to try looking for a little while longer before going into ID, IMO.

I would take the ID firm if it means being unemployed. You can always continue to look. Maybe do 12 months of ID and it is easy to get out of ID if you already have the stats for Big Law. Litigation is litigation and you will go to court. Just make sure you do a practice area that transfers to Big Law. I did ID for several years and got out. Interviewed with top big law firms even though i didnt have the grades. ID is not as bad as people make it seem but why do ID at 100k when you can do the same work in big law for 160k+.

I have barely any first-hand basis to base this off of but I always understood that ID pretty much foreclosed biglaw. Maybe regional biglaw shops have ID groups (??) but in a major market you're not lateralling
from ID to a top firm without some wild factor in your favor. If OP is rando t1 law grad I think s/he needs to really think about whether they're fine w a career doing ID. Only a few Amlaw 250 firms I'm aware of have ID practices. Other biglaw insurance groups do basically finance/adjacent work.

[JOThompson]

I think there is some risk in moving to insurance defense, unless OP is confident he wants to stay in some form of insurance defense long-term. I have classmates and friends who did ID and who are still pigeonholed into it (some of them peruse this forum). I think ID is something that tends to not open many doors in other practice areas, and might even close them. The general litigation skills may in fact be transferable but I'm not confident that employers see it that way.

[Anonymous User]

OP here. I really appreciate the responses.

No, I'm not jumping ship I am getting pushed out and my severance period is limited and unpredictable. That's one reason I'm tempted to take the offer cause being in a small firm when everyone knows your fired, and you still have to bill is rough.

Obviously, I want to "trade up" and would love big law but the only chance I have of doing that, i believe, is staying in my practice area for which there is no long term future for me. I would just be delaying another situation like this a few years down the road.

Frankly, I don't know if ID is what I want out of my career. Seems stable and the end game, personal injury work or a partner at an ID firm seem lucrative and appealing to me. Also, I don't mind repetitive work. I don't need to be constantly titillated with interesting legal questions. I thrive on being consistent and good at what I do, and of course money.

Having said that I really don't wanna be rash. About 20% of my practice is commercial litigation and I really like it. Would love to land at another small/med firm that does that. As some have suggested, I think risking a gap on my resume is the way to go. I have the dough to keep my boat afloat for a while and am still relatively young. I was heeding the conventional wisdom that a gap in a litigators resume is a kiss of death. Perhaps for biglaw, but it sounds like your standard small to midsize firm that does general litigation won't mind...

Anyways, thanks for the thoughts folks. Of course I would appreciate more.

[Flarmanarnar]

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OP here. I really appreciate the responses.

No, I'm not jumping ship I am getting pushed out and my severance period is limited and unpredictable. That's one reason I'm tempted to take the offer cause being in a small firm when everyone knows your fired, and you still have to bill is rough.

Obviously, I want to "trade up" and would love big law but the only chance I have of doing that, i believe, is staying in my practice area for which there is no long term future for me. I would just be delaying another situation like this a few years down the road.

Frankly, I don't know if ID is what I want out of my career. Seems stable and the end game, personal injury work or a partner at an ID firm seem lucrative and appealing to me. Also, I don't mind repetitive work. I don't need to be constantly titillated with interesting legal questions. I thrive on being consistent and good at what I do, and of course money.

Having said that I really don't wanna be rash. About 20% of my practice is commercial litigation and I really like it. Would love to land at another small/med firm that does that. As some have suggested, I think risking a gap on my resume is the way to go. I have the dough to keep my boat afloat for a while and am still relatively young. I was heeding the conventional wisdom that a gap in a litigators resume is a kiss of death. Perhaps for biglaw, but it sounds like your standard small to midsize firm that does general litigation won't mind...

Anyways, thanks for the thoughts folks. Of course I would appreciate more.

If money is the biggest factor (seemingly over practice area, etc.) which it seems like it is here based on some of your above statements - DO NOT go into ID. The pay cut is not worth it and you won’t be making high bonuses or large pay bumps each year. Making a large amount of money in ID is like winning a lot of money off a $1 scratch ticket, the odds are virtually 0.

[Anonymous User]

I totally understand the OP's thought process.

I think a long, unexplainable gap can be a deathknell for a litigator...but a short gap is probably preferable to moving into an undesirable/unmarketable type of litigation.

I was hasty in moving from criminal defense to prosecution, because I thought I needed to stay in the litigation game. Now I'm stuck doing criminal law for the foreseeable future (or insurance defense). I missed my window to transition to a firm and non-ID civil litigation and there are times I regret that.

[sparty99]

I think there is some risk in moving to insurance defense, unless OP is confident he wants to stay in some form of insurance defense long-term. I have classmates and friends who did ID and who are still pigeonholed into it (some of them peruse this forum). I think ID is something that tends to not open many doors in other practice areas, and might even close them. The general litigation skills may in fact be transferable but I'm not confident that employers see it that way.

You are conflating insursnce litigation practice area with insurance defense. ID is simply when insurance companies have a list of panel firms that they use and they furnish work to these firms when their insured needs legal counsel. There are different areas of lawnehere they furnish work" genral lit, employment, personal injury, IP, transportation, construction, etc. If u did employment, u could go to jackson lewis or littler who also do some ID. Then after 2 years there, lateral to big law shop's employment group. Just look at people from gordon rees, lewis brisbois, wilson elser. They have assosciates who leave for big law. Op is also assuming he will be unemployed for a short time. Its better to look when employed.

[nealric]

I think there is some risk in moving to insurance defense, unless OP is confident he wants to stay in some form of insurance defense long-term. I have classmates and friends who did ID and who are still pigeonholed into it (some of them peruse this forum). I think ID is something that tends to not open many doors in other practice areas, and might even close them. The general litigation skills may in fact be transferable but I'm not confident that employers see it that way.

You are conflating insursnce litigation practice area with insurance defense. ID is simply when insurance companies have a list of panel firms that they use and they furnish work to these firms when their insured needs legal counsel. There are different areas of lawnehere they furnish work" genral lit, employment, personal injury, IP, transportation, construction, etc. If u did employment, u could go to jackson lewis or littler who also do some ID. Then after 2 years there, lateral to big law shop's employment group. Just look at people from gordon rees, lewis brisbois, wilson elser. They have assosciates who leave for big law. Op is also assuming he will be unemployed for a short time. Its better to look when employed.

I agree that if the alternative is getting canned with nothing lined up, it may be worth considering. But I'd wait to pull the trigger until the last minute while looking for something else.

[sociallaw]

I haven't evaluated ID specifically but in general, my two cents:
1. Make sure you've done your homework on these firms
2. Make sure you've done your homework on ID- would you be essentially locked into this area?
3. When you started at your current firm, what were your expectations and how did the reality not meet them? Essentially try to assess your thought process to make sure you aren't repeating any assumptions/mistakes as you evaluate your current option
4. What could be your long-term path at these new firms or in ID in general?

In general a pay cut can be worth it if you truly are miserable and the alternative will make you much happier- meaning you'll do better work and be more likely to succeed as well. But there is always the danger of grass is greener etc.

[tyroneslothrop1]

There's many different kinds of insurance defense. Auto-accident insurance defense is going to be repetitive, low pay, and you won't learn anything. Or you could, for example, end up defending architects/engineers in construction-related disputes. An insurance company will be paying the bills but the subject matter will be interesting - depending on your preferences - and millions of dollars will be at stake. Or you could be doing employment law insurance defense at a "big law" firm like Littler Mendelson. All of those firms do loads of ID work.

[Anonymous User]

I'm one of the above posters. How do people realistically land ID that isn't auto-insurance related? I rarely see any other types of jobs posted, and when there is a employment/professional/medical malpractice defense, they usually want 3-5 years of experience in those areas.

[km0ney]

There's many different kinds of insurance defense. Auto-accident insurance defense is going to be repetitive, low pay, and you won't learn anything. Or you could, for example, end up defending architects/engineers in construction-related disputes. An insurance company will be paying the bills but the subject matter will be interesting - depending on your preferences - and millions of dollars will be at stake. Or you could be doing employment law insurance defense at a "big law" firm like Littler Mendelson. All of those firms do loads of ID work.

Adding to the last point -- you can also get a good balance of insurance defense and non-insurance employment work at other "big law" employment shops like Constangy and Ogletree. Both of these specifically do more non-EPLI and more class actions. People dread dealing with insurance companies. These two shops have significantly less encounters with the insurance companies. Littler does about 90% insurance def.

[Anonymous User]

Littler attorney here. We definitely don't do anywhere near 90% ID, as the above poster states. I probably have 1 ID case for every 10-15 cases...At any rate, ID work is definitely NOT fun. Having to justify your bills to insurance companies can be a painful annoyance, as insurance companies take the position that they won't pay for a wide variety of tasks that should be billable (e.g., inter-office communications, preparation work, strategy meetings, research over 1 hour, etc.). Doing a small amount of ID work is fine and good experience - but I'd avoid making it your bread and butter...

[sparty99]

What happened OP? Where are they now?

[Younglust123]

sparty- similar situation here. saw your posts. where did you land w/o grades but w/ ID experience?